KARACHI:- The Directorate General of Post Clearance Audit, Pakistan Customs raised audit objection against M/s. Omar Associate (Pvt) Ltd and advised them to deposit the short levied amount of Rs. 6282619/- along with additional duty and taxes.
In case you are of the opinion that the above findings are incorrect or that the recoverable amount has been erroneously calculated or it has already been deposited, than you are requested to provide a self explanatory written clarification along with supporting particulars and documents etc with in the 7 days period. In case you wish to explain your position in person of through duly authorized representative, they are requested to visit the office of the undersigned on any working day during office hours, the audit objection said.
According to details during the scrutiny of DTRE No. KEXP/4067/09122012 Dated 09.12.2012 , it has been observed that M/s Omar Associates (Pvt) Ltd imported 15000 M.Tons Soap Stone under H.S.Code 2526-1010 availing facility of provisions of DTRE Rules notified vide SRO.450(i)/2001 Dated 18-06-2001. The importer imported subject Raw Material under 22 Goods Declaration during the period 18-12-2010 to 14-03-2011. The DTRE user Exported 14821.340 M.Tons of Finished Talc Lumps under 5 Export Goods Declarations during 03-01-2011 to 07-04-2011. They were granted specific contract based DTRE approval for acquisition of duties & taxes suspended input goods for solely use in exports.
This approval was on the basis of declaration of the applicant who stand responsible for fulfillment of these declarations.
The audit objection further states that under RULE. 302A, samples of imported input goods and output goods meant for export shall be drawn at the time of import and export so that the same could be used for cross matching or any other purpose as required. Rule 302(c).
The subsequent analysis of import & export documents and the record provided with Reconciliation Statement revealed that DTRE user has not followed the Rules in its true spirit. Port of importation is shown Karachi instead of Torkham in Appendix-I. Similarly the date of import at Torkham is recorded as date of arrival in Karachi. Clearance at Torkham, unloading at Peshawar Terminal, sorting by Labors, reloading and transportation to Karachi will take minimum 10 days.
The analysis of data provided with Reconciliation Statement further revealed that 1St import of input goods was on 18-12-2010 while Sales Tax Invoice OAL/ 2010/428 dated 29-12-2010 was issued for 1st export of 104.620 M.Ton vide KEXP-SB-03-1-2011. The input goods acquired & imported for the instant DTRE in surely not used in production of the output goods of this 1st export because the period between date of importation and issuance of Sales Tax invoice is 10 days which is minimum required for transportation upto Karachi.
The 2nd Export of 6620.720 M.Tons against Sales Tax invoice dated 14-01-2011 was under KEXP-SB-37270 dated 17-0102011. The import data revealed that maximum 1606 M.Tons input goods were available for this export and that too without required processing time. It means that 5014.720 M.Tons of goods in the 2nd export shipment is from input goods of other source as for this no input goods acquired was available during the period. From all this it is crystal clear that out of total export of 14821.340 M.Tons under this DTRE 5119.340 M.Tons is produced from input goods which was neither acquired/imported against the instant DTRE. In other words the input goods of 5119.340 imported free of duty & taxes for this DTRE was used somewhere else which in violation of Provisions of DTRE Rules as notified vide SRO.450(i)2001 dated 18.6.2001 and attract recovery of suspended duties & taxes besides penal action under the relevant provisions of law. The value of 5119.340 M.Tons @Rs.5/kg comes to Rs.25596700 on which suspended CD @ 10% was Rs. 2559670, S.Tax 17% was Rs.4786582, Spl FED @ 1% was Rs.255967 And WHT @4% was Rs.1327956. Total duty and taxes suspended were Rs.8930175.
The importer under the audit objection was asked to pay the short levied amount of Rs. 6282619/- along with additional duty and taxes.