MCC Port Qasim approaches SHC as Tribunal allows over-quota import of alcohol on under-stated invoice

KARACHI: MCC Port Qasim has approached Sindh High Court against six orders issued by Customs Appellate Tribunal in cases of similar nature raising several questions of law, which the Tribunal did not consider in making the rulings.

“Irreparable loss / harm would be caused if the appeals are disallowed,” the Collectorate has submitted before the court.

The expatriate employees of M/s Philip Morris Pak Ltd Karachi and one Christopher Vincent of M/s Green Star social Marketing, Karachi grossly under-invoiced the value in order to get away with a large and illegal / excessive quantity of banned Alcoholic as alleged.

According to details of the case clearance of imported liquor consignment was sought on behalf of Arpad Konye, Peter Stewart Day, Gabor Toth , Kostiantym Riubenko and Andre Rainier Nel, all ex-patriate employees of M/s Philip Morris Pak Ltd Karachi, against which only one goods declaration was filed through Clearing Agent M/s. Euro International vide Home Consumption Goods Declaration.

As import by foreigners is regulated/restricted through FBR Booklets, 100 percent examination was carried out. The documents furnished by the clearing agent were also scrutinized and it was found that the importer claimed benefit of exemption from Customs Duty and taxes under Special Classification Provision of Chapter 99.

Accordingly, notices were issued to the foreign expatriates to justify the claim of exemption from duty and taxes.

In response to the notices, one Mr. Darpan Khetpal furnished reply without declaring his locus standi with regard to the goods and the respondent. In the reply, he stated that the importer / privileged persons had no objection to payment of duties and taxes, if leviable.

The importers claimed benefit of exemption of Customs Duty and taxes against Special Classification Provisions of Chapter 99, which provides that “Goods imported by privileged personnel / organizations under grant-in-aid agreements signed by the Economic Affairs Division (EAD) Government of Pakistan, duly concurred by the Federal Board of Revenue” are entitled for exemption.

Since, the respondent did not meet the aforementioned conditions; therefore, the Goods Declaration was completed at statutory rate of duty and taxes.

The import quota is regulated in terms of CGO 12/2002 the Alcoholic beverages being banned item and on the Negative List. According to aforesaid CGO, the import / purchase of alcoholic beverages is restricted to $ 200 per family per month. However this regulatory mechanism was being defeated by the respondents in their attempt to pass away excess quantities by way of gross under invoicing / under valuation.

The present import has been affected without any Letter of Credit. The transaction therefore cannot be verified from any banking channel, whereas, the declared values were highly under invoiced in comparison with the current prevalent international prices of the liquor varieties. Therefore declared values were not acceptable. It was clear that the sole purpose behind the under invoicing was to get away excessive and illegal quantity of the banned Alcohol.

The importer clearly attempted to pass an illegal and excess quantity of banned goods which are otherwise only allowed to expatriates and Privileged Persons to the extent of a prescribed quantum. Thus in order to safeguard from the violation of the quota an assessment order was passed by the adjudicating authority properly the declared values are 10-12% of the current prices are being Duty Free Shop (80% Less); the value was thus assessed at par with similar goods at $ 2308.20 as against the declared value $1155/- leading thereby to the detention of almost half of the Alcoholic Beverages..

The importers approached the Collector (Appeals), he set aside the aforementioned order in complete disregard of the fundamental issue being the attempt to get the illegal and excess quantity of the banned goods. Later, Customs Appellate Tribunal upheld the decision of Collector (Appeals).

The applications before the Sindh High Court submit that the importers grossly under-invoiced the value in order to get away with a large and illegal / excessive quantity of banned Alcoholic.

The Collectorate prayed to the Court that the decisions of Customs Appellate Tribunal, which upheld the order of Collector Appeals in favor of above mentioned importers, may be suspended so that loss of revenue could be avoided.

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