Bonded carrier ordered to pay Rs247 million in pilferage of NATO, ISAF POL products

KARACHI: Collectorate of Customs (Adjudication) has ordered a recovery of Rs247 million from a bonded carrier, who found involved in pilferage of POL products meant for ISAF and NATO supplies in Afghanistan.
The collector of Adjudication ordered the recovery on the case detected by the directorate general of Intelligence and investigation of the Federal Board of Revenue that huge quantity of POL products transported by Bonded Carrier Mengal Brothers Transport (Pvt) Limited did not reach destination and was destroyed enroute to Afghanistan.
The Concerned authorities of ISAF/NATO/DESC short receipts confirmed the exaggerated enroute losses of over 1 percent limit. A quantity of 1,585,974/- liters worth Rs. 142,677,330/- has been worked out against 864 transport permit. The evaded/recoverable/amount of taxes/levy has been worked out to Rs. 24,188,865/- in this regard. Total liability worked out against the above name bonded carriers comes to Rs. 247,284/- millions which is recoverable from them without prejudice to any other action that may be taken against the concerned OMC and other persons involved in t he disposal/consumption enroute to Afghanistan.
It is informed by the FBR, “duty free POL products supplied by various Oil Marketing
Companies/refineries for export to Afghanistan for use by ISAF, NATO and DESC were being pilfered while enroute to Afghanistan by the contracted bonded carriers whereby huge amount of taxes leviable which have been evaded. Whereas these POL products falling in the ambit of smuggling under Section 2(s) of the Customs Act, 1969.”
According to the evidence provided by the Mengal Brothers Transport General Manager Abdul Qayyum Khan, “it revealed that during the period March, 2008 to July, 2011 around 18,301,974 Petroleum products worth of Rs.1,307,251,490/- pertaining to 319 transport permits supplied by PSI, Karachi transported by aforesaid carrier did not reach to its destination and was allegedly destroyed enroute due to purported alleged and sabotage activity.
The customs licensed carriage contractors were legally bound to file incident report within three days to the concerned authority otherwise the transporters shall be responsible for the duties and taxes and loss or deduction in value as a result of such damage notwithstanding any other action which may be taken under the law and rules made there under. Bonded carrier was responsible for safe transportation of dutiable goods up to the destination; In this case applicant is liable to pay all the liabilities.
The evidences of the perpetrator proved incomplete, misleading and baseless due to the submission of less invoices of sales tax and said letter photo copies of said letter to Mengal Brothers Limited and not to any concerned customs or sales tax official authority. They also failed in specifying the actual quantity of non delivered/over 1 percent short-access delivered POL products at Afghanistan nor amount of duty & taxes deposited by PSO and details of transport permits/export invoices & cartage (shortages) invoices.
The said letter alleges transportation of POL products to Afghanistan during September, 2009 to August, 2011, whereas the contravention case against Mengal pertains to their transport permits for the period March, 2008 to August, 2011 a respondent of the case said.
Similarly, Shell Pakistan and PSO have failed in providing details of relevant TPs, export/shortage invoices and sales tax returns in support of alleged payment of involved duty/taxes on behalf of the respondents.
Under relevant rule for ready reference, “In case there is any variation of more than one percent in the quantity declared in the permit under rule 563 and the one endorsed or certified by the ISAF or, as the case may be, DESC, action under appropriate provisions of the Customs Act, 1969 (IV of 1969).
The Sales Tax Act, 1990 and other laws applicable shall be initiated against the carrier and other persons found involved.”