KARACHI: The Customs Appellate Tribunal has struck down the additional demand created by Customs Appraisement against a fabric and yarn importer and also struck down the penalty imposed.
According to the details of the case, M/s Samad Enterprise imported 16 consignments of blended fabrics in 2014 being registered as manufacturer of textiles and claimed benefit of SRO 1125(I)/2011. The consignments were accordingly cleared after due verification. However, thereafter Customs Appraisement submitted a contravention report on the pretext, that the importer had failed to pay sales tax 3.0 percent, additional sales tax 2.0 percent and income tax 3.0 percent, on the assumption that all the imported consignments were of blended fabrics and that the M/s Samad Enterprises is a commercial importer.
The importer clarified that only one consignment of blended fabric was imported and the remaining 15 consignments were of assorted yarn against volume the leviable duty and taxes were paid. Documentary evidence in this regard were also submitted that importer is manufacturer of textile, and the same was also verifiable on the FBR e-portal.
The Customs however passed the impugned Order-in-Original on the presumption that the importer is a manufacturer of plastic products and thus not entitled to the benefit of SRO 1125(1)/2011. Importer was directed to pay Rs2.9 million as evaded amount and a penalty of Rs300,000 was also imposed.
The importer approached Appellate Tribunal. The Tribunal after detailed deliberations of evidence on record and in the absence of any concrete evidence or justification in favor of the additional demand created by Customs struck down the order-in-original.