Osaka Electrical served show-cause notice for duty/tax evasion

KARACHI: The Collector of Customs Adjudication has issued a show-cause notice to M/s Osaka Electrical Corporation for attempting mis-declaration of description and Customs Tariff (PCT) aimed at evasion of duties and taxes of Rs1.9 million on goods cleared through automated clearance system.

According to details, it was reported by Directorate General of intelligence and Investigation-FBR that M/s. Osaka Electrical Corporation were involved in the importation and clearance of the consignments of Stationery Tape PCT Heading 3919.1030 in the garb of Self Adhesive Transparent Tape under PCT Heading 3919.1090 valued at $1.1 per kg and paid the custom duty at 16% by availing the benefit of Pak-China FTA which is not admissible on Scotch Tape as the same falls under PCT heading 3919.1030. This item is chargeable to standard rate of Custom duty of 25%.

In order to verify the veracity of the information, relevant import data of M/s. Osaka Electrical Corporation was scrutinized which revealed that two consignments of Stationery Tapes were got cleared by the importer through Automated Clearance System from MCC (PMBQ) under PCT heading 3919.1090 by showing the value at $1.1 per kg and paying the custom duty at 16% instead of 25% by availing the benefit of Pak-China FTA wrongfully.

Since the imported goods are stationery tapes which are finished product/commodity and fall in PCT heading 3919.1030, therefore the benefit of FTA is not admissible to the aforesaid imported goods. Moreover, the importer also ignored the Valuation Ruling No. 519/2012. According to the said Ruling, the value of Stationery Tape is fixed0 at $2.10/kg whereas, the aforesaid importer paid the duty and taxes at value of $1.1/kg which caused loss to the Government exchequer in terms of duty and taxes amounting to Rs1,905,639.

M/s. Osaka Electrical Corporation has been a show cause notice and a hearing has been fixed on May 14, 2014 in this regard.

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