KARACHI: Collector Customs Adjudication Chaudry Muhammad Javaid has imposed a conditional penalty on M/s Sui Northern Gas Pipelines (SNGPL) for evading duty/taxes and claiming inadmissible of concessionary SRO.
Collector Adjudication has linked the verdict with the report of Engineering Development Board (EDB) that whether the gas meters imported by M/s SNGPL were manufactured locally or not. MCC Appraisement East has already approached EDB seeking confirmation whether the imported gas meters are manufactured locally or not.
If EBD confirms the imported goods are manufactured in Pakistan M/s SNGPL would not be entitled of the SRO benefit and would be liable to pay evaded amount of Rs18.787 million, while a penalty of Rs1.5 on the northern gas utility would also be in order.
According to details of the case, Model Customs Collectorate of Appraisement (East) received information to the effect that M/s. Sui Northern Gas Pipeline Ltd on their imports of Gas Meters falling under heading 9028.1000 chargeable to statutory rate of Customs Duty 25% has availed undue/inadmissible benefit of SRO 678(1)/2004 thereby caused huge revenue implications to the national exchequer.
In pursuance to the said information post scrutiny of previous releases of impugned goods by M/s. SNGPL was conducted, which revealed that company imported a consignment declaring the goods as Gas Meters classifiable under PCT heading 9028.1000 and sought clearance through their clearing agent M/s. Muhammad Amin Muhammad Moqeem Clearing & Forwarding Agents. The importer claimed the benefit of SRO 678(1)/2004 and paid the customs duty 5.0% instead of statutory rate of Customs Duty 25%.
SNGPL being a company other than an E&P company claimed exemption of custom duty in excess of 5.0% ad valorem under SRO 678(1)/2004, which is subject to certain conditions.
Exemption is available to companies other than E&P Company/Service Companies, for their projects only and not for furtherance of commercial activity. But, the gas meters imported by SNGPL will be installed on customer’s meter station which by no means can be termed as project and also not covered under the definition of contractor of M/s SNGPL.
SNGPL being a company other than E&P Company, is entitled to avail exemption of custom excess of 5.0% ad valorem on import of ‘machinery’ and ‘equipment’ as are not manufactured locally.
MCC Appraisement East has already approached EDB seeking confirmation whether the imported gas meters are manufactured locally or not.