KARACHI: R&D Appraisement East, on the directives issued from the office of Chief Collector South Abdul Rasheed Shaikh, has withdrawn the Contravention Report served on M/s BBJ Pipe Industries Ltd of Lahore for mis-declaring the description of imported goods.
M/s BBJ Pipe Industries had attempted to clear secondary quality goods by declaring as prime quality and short-paid government’s legitimate revenue.
MCC Appraisement East R&D Section detected a case of mis-declaration and recovered an additional revenue of Rs750 million. It was not a voluntary payment, but the authorities had to make the recovery.
Principal Appraiser Shafiullah had this information that M/ s. BBJ Industry would make an attempt to clear the secondary quality Hot rolled Coils arrived from Taiwan while claiming inadmissible concession SRO 565(1)/2006.
Accordingly, Shafiullah put the said consignments under observation and after concluding the proceeding by the relevant Group, an examination was created to ascertain the actual description / classification of the goods.
The goods were declared as hot rolled steel sheets in coils of prime quality. However, upon examination the goods were found to be hot rolled steel sheets in coils of various sizes and gauges.
In view of clear cut ﬁndings of R&D and Examination Staff, goods are found to be Hot Rolled Coils of Secondary Quality classiﬁable under heading 7208.3710 attracting CD 20 percent, RD 12.5 percent, S.T 17 percent, l.T 5.5 percent instead of Prime Quality declared by the importer under heading 7208.3790 CD 5.0 percent RD zero percent, I.T zero percent, S.T 17 percent with claimed benefit of SRO 565(I)/2006 thereby causing colossal loss to the exchequer.
Accordingly, after re-assessment, the R&D has recovered an additional amount of Rs.60 million in addition to Rs28.74 million paid upfront by the importer at the time of ﬁling of the Goods Declaration, totaling revenue implication of Rs88.74 million.
The Chief Collector examined the issue afresh on the basis of case record.Considering the fact that the importer had voluntarily paid the recoverable amount, he ordered to withdraw the Contravention Report. Importer also agreed to withdraw the suit filed before High Court in this regard.
It is established beyond any doubt that M/s BBJ Pipes Industries attempted to evade duty and taxes by misdeclaring the description of goods. However, when they were caught, the company paid the leviable duty and taxes. Withdrawal of the Contravention Report on the basis that importer paid evaded duty and taxes would set a bad precedent.
It means a license to attempt fraud or evasion and when one gets caught, he could pay the leviable/evaded amount and go free.
The R&D team comprising Deputy Collector Javed Sarwar Shaikh, Principal Appraiser Shafiullah, Appraising Officer Abdul Qadeer, Preventive Officer Malak Hashim and Adil Rasheed detected the case and Chief Collector Abdul Rasheed Shaikh is being pressurized by political quarters to trasnfer this team, as the consignments of M/s BBJ Pipes Industries cleared in September are yet to be verified.
M/s BBJ Pipes Limited has an import quota of 30,000 tons of which 4000 tons was cleared by mis-declaration. The rest were cleared in September and it is anticipated that these consignments were of secondary quality and were cleared as prime quality. It was a fiscal fraud and an FIR was supposed to be lodged. However, Customs only served the Contravention. Exchequer has suffered a loss as the fines and penalties will not be imposed.
There are instances that entire teams were transferred on political influence. In 2010-11, Nisar Mohammad Khan then Collector PaCCS in a case of residue of petroleum transferred the entire R&D team comprising Mohammad Tahir, Ibrahim Dasti, Mohammad Akbar, Hamood-ur-Rehman and others.