KARACHI: The MCC Appraisement East has prepared two contraventions against Pakistan Telecommunication Company Limited (PTCL) for mis-classification of PCT heading, which resulted in a loss of Rs122.751 to the national exchequer.
Pakistan Telecommunication Company Limited imported several consignments said to contain ‘Telecommunication Equipments-(IPTV-STB)’ from China and sought clearance under PCT Heading 8517.6950 and PCT Heading 8517.6990.
The importers determined their liability of payment of applicable duty & taxes and paid the same and sought clearance of the goods. All the consignments were released through Green Channel Facility as per importers’ declaration, inter alia, on payment of custom duty.
In pursuance of receipt of a credible information regarding evasion of duty & taxes by the importers & their clearing agents, R&D’s team thoroughly scrutinized relevant database/record of the Customs WeBOC system as well as relevant technical literature. Detailed scrutiny thereof has revealed that the importers have succeeded in getting clearance of the impugned goods by deliberately mis-declaring, with the active connivance of their clearing agents, description thereof as “Telecommunication Equipments-(IPTV-STB)” instead of actual description “Internet Protocol Television Set-Top Box (IPTV-STB)” & wrong PCT Heading instead of correct PCT Heading 8528.7290.
Perusal of relevant technical literature also available on the web confirms that the impugned item i.e. “Internet Protocol Television Set-Top Box (IPTV-STB)” is not one having capability to provide internet services rather it is meant for Smart TV having capability to provide Television Cable Service through IP modem. Cable Television Streaming through internet modem is converted into TV signals for display on TV sets.
Basically, under reference IPTV Set-Top Box is a sort of TV tuner converting electronic signals into video signals irrespective of source meaning that it is used for receiving, decoding and playing of an encoded television signal from a network.
Since Smart TV Set-Top Boxes classified under PCT Heading 85.17 are meant only for gaining access to internet, this PCT Heading is not the appropriate PCT Heading for the impugned IPTV-STB.
From the aforesaid facts, it is crystal clear that the impugned item “Internet Protocol Television Set-Top Box (IPTV-STB)” is correctly classifiable under PCT Heading 8528.7290.
The impugned goods were actually chargeable, inter alia, to custom duty 30 percent as against 5 percent paid by the importers.
Scrutiny of the relevant database further revealed that M/s PTCL themselves have been getting clearance of their impugned item under their own declared correct PCT heading 8528.7290 while claiming concession under Serial#33(64) of SRO-575(I)/2006 when it was in the field.
However upon withdrawal of the aforesaid exemption, they started claiming clearance of the impugned item under wrong PCT Heading 8517.6990 & 8517.6950. The relevant database also revealed that other importers are getting clearance of their similar goods under correct PCT heading 8528.7290.
These facts sufficiently confirm deliberate mis-declaration of M/s. PTCL and their clearing agents in terms of description & PCT Heading of the impugned goods to evade Government’s legitimate revenue.
The Customs sufficiently developed that the impugned goods are rightly classifiable under PCT Heading 8528.7290. However despite having complete knowledge of the aforesaid facts, the importers M/s Pakistan Telecommunication Company Limited, Islamabad with the active connivance of their authorized clearing agents M/s Eastern Freighter Services, Karachi have malafidely mis-declared the impugned goods in terms of description and PCT Heading and evaded legitimate Government revenue.
Deliberate mis-declaration by the importers and their clearing agents has caused colossal loss to the national exchequer to the tune of Rs122.751 million.