KARACHI: Additional Collector Customs Adjudication Syed Mahmood Hasan has penalized yarn importers and clearing agents for attempting to defraud the exchequer through mis-declaring the goods spandex.
According to details, Model Customs Collecorate of Appraisement (East), Karachi (R&D Section), received a credible information that “Air covered yarn” of PCT heading 5402.3300 chargeable to customs duty 10 percent ad-valorem is being cleared in the guise of spandex/lycra of PCT heading 5402.4410 chargeable to customs duty zero percent, which is now 1.0 percent.
The subject consignments were intercepted and the GDs were referred to examination for confirmation of description. Accordingly, examination was conducted and as per examination report, the item description was reported as Lycra Air Covered Yarn.
After thorough examination of the samples of goods, analytical test reports, composition of the constituent materials and physical attributes of the products, it was concluded that Air Covered Yarn is appropriately classifiable under heading 5403.3300.
M/s. International Export & Import Co. Karachi and M/s Continental Trading Company Karachi were importing the same product, therefore, data of their previous clearances was scrutinized. It revealed that the importer got cleared 04 consignments each mentioned as above of Air Covered Yarn in the garb of Spandex Air Covered which were got released with mis-declaration of HS Code/PCT heading i.e. 5402.4410 instead of 5402.3300.
It is also pertinent to mention here that the data of other importers of similar item has also been checked and it has been found that the similar/identical goods have been cleared after payment of custom duty 10 percent.
M/s. International Export & Import Co. Karachi and M/s Continental Trading Company Karachi and their authorized Clearing Agents M/s. S. Bhayani & Sons, M/s Faizan Agencies have deliberately mis-declared description & incorrect classification with malafide intention to deprive the national exchequer of its legitimate revenue.
M/s. International Export & Import Co. Karachi evaded Rs.2.729 million while M/s Continental Trading Company Karachi evaded Rs2.543 million in this manner.
In the light of due deliberation particularly determination of the classification of Air Covered Yarn by Customs Classification Committee, the charges of mis-declaration of description were established and Additional Collector Customs Adjudication Syed Mahmood Hasan order the importers to immediately pay the evaded amount of duty and taxes.
A penalty of Rs100,000 each on M/s. International Export & Import Co. Karachi and M/s Continental Trading Company Karachi was also imposed along with the payment of evaded amount. Clearing agent M/s Bhayani & Sons was imposed a penalty of Rs20,000 while M/s Faizan Agencies was imposed a penalty of Rs10,000.