Textile company penalized for evading government revenue
KARACHI: Collector Customs Adjudication Chaudry Mohammad Javaid has imposed a penalty of Rs5.0 million on M/s Magna Textile Industries Pvt Ltd along with the payment of Rs25.57 million duty/taxes evaded through the claim of inadmissible benefit through mis-declaration.
According to details, PCA Karachi had detected the case and according to reported facts, M/s Magna Textile Industries (Pvt.) Ltd imported consignments of pigment blue, brightening agent Kevi Green 7, Pigment Green, Pigment Phtlialocaynine, Super white BBU etc and cleared them from MCC Appraisement (East) by availing inadmissible exemption of Customs Duty in excess of 5 percent under SRO 565(1)/2006 .
Benefit of the said SRO is admissible to Sales tax Registered manufacturers of Master Batches having suitable in house facility.
While in Sales Tax profile, principal activity of the said importer as manufacturer cum importer/exporter for finishing of textile and not as the manufacturer of Master Batches. Therefore, the imports were not covered under SRO 565(1)2006 and were subject to statutory rate of customs duty, sales tax and withholding tax. Accordingly, the importer short paid a total of duty and taxes amounting to Rs25.57 million.
After due deliberations, Collector Adjudication Chaudry Mohammad Javaid established that M/s Magna Textile Industries (Pvt) Ltd has committed violation of certain provisions of Customs Act, Sales Tax Act and Income Tax Ordinance.
Collector Adjudication ordered the importer to pay the evaded amount of duty and taxes totaling Rs25.57 million and also imposed a penalty of Rs5.0 million.
M/s Magna Textile Industries was represented by Advocate Javaid Iqbal Butt of M/s Masood Aziz Associates while Customs was represented by Principal Appraiser Sham Lal, Appraising Officers M.D Vohra and Ghulam Haider Pirvani of Post Clearance Audit (PCA).