M/s Dawlance penalized for evading government’s legitimate revenue

KARACHI: Collector of Customs Adjudication Dr. Shazia Ikram has found M/s Dawlance (Pvt) Ltd of mis-declaration to evade government revenue and penalized the company.

M/s Dawlance is ordered to pay the evaded sum of Rs14.868 million and a penalty of Rs1.0 million is also imposed on the company. A penalty of Rs0.2 million each is also imposed on clearing agents M/s Omal Sons Corporation, M/s North International, M/s H.I International.

According to details of the case, Directorate General of Intelligence and Investigation-FBR has information than many importers involved in  import and clearance of chemicals namely Wannate PM-2010, Wannate PM-8221, Millionate MR-200, Cosmonate M-200 and Lupranate M20S, etc, containing Polymethylene polyphenylene isocyanate, a polymeric MDI, classifiable under PCT heading 3909.3000 attracting 20 percent customs duty by mis-declaring the same as Di-phenylmethane Di-isocyanate (MDI) under PCT 3824.9091 attracting 05 percent Customs Duty (0% under Pak-China FTA) causing huge loss to public exchequer.

A number of consignments of aforesaid Items imported by various importers, which were lying at port/bonded warehouses after have been cleared through clearance Collectorates on claimed PCT were identified and detained by the Directorate including two consignments of Wannate PM-2010 imported by M/s. Dawlance (Pvt) Ltd.

Scrutiny of the relevant goods declaration filed by M/s. Dawlance revealed that assessment was claimed under PCT 3824.9091 attracting 0% duty under FTA.

In order to verify veracity of the information, the consignments were detained and examined by the staff of Directorate General, Intelligence & Investigation-FBR (Enforcement) Karachi in the presence of importers’ representatives, clearing agents.

Although the description marked on the labels and the relevant literature received from internet duly confirmed the goods to be polymeric MDI, yet for the sake of further clarity representative samples were drawn from the consignments of M/s. Dawlance (Pvt) Ltd were sent to HEJ Lab, University of Karachi for confirmation of description.

Meanwhile, representative samples of the item Lupranate M20s which was detained in bonded warehouse after having been cleared from the Collectorate under claimed PCT heading 3824.9091 were also sent to HEJ Lab for test.

Meanwhile, Singh high Court allowed release of seized goods pending final adjudication of the case subject to submission of bank guarantees/pay order for the differential amount of duty and taxes and postdated cheques for the anticipated amount of fine and penalties and that department is at liberty to take legal steps as required under the law excluding coercive action.

M/s. HEJ Lab submitted Test Reports  confirmed the charges of mis-declaration of description and PCT and it was established by the department that M/s. Dawlance (Pvt) Ltd in connivance with their clearing agents M/s. H.I International, M/s. Omal Sons Corporation and M/s. North International committed offence of mis-declaration aimed at evasion of taxes.

In order to quantify the evasion of duty and taxes on identical consignments cleared previously, import data of under-reference items was scrutinized which revealed that during July 2013 to March 2016, M/s Dawlance imported and cleared ten consignments of items Lupranate M20s and Wannate PM2010 deliberately under incorrect PCT 3824.9091 instead of actual PCT 3909.3000 thereby evading government revenue of Rs14.868 million.

After detailed deliberations of the case, Collector Adjudication Dr. Shazia Ikran found the charges established and ordered recovery of evaded amount from the importer while a penalty of Rs1.0 million was also imposed. Clearing agents were also penalized.

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