Fabric importer booked for evasion through mis-declaration

KARACHI: Directorate of Customs Intelligence & Investigation Karachi has lodged an FIR against M/s Spectrum Enterprises and M/s Kanwal Enterprises for massive tax evasion through mis-declaration of description and value of the imported fabric consignments.

Information was received through Director General Customs Intelligence & Investigation Muhammad Zahid Khokhar that M/s Spectrum Enterprises Hyderabad along with its clearing agent M/s Kanwal Enterprises and others (including the chemical examination staff of Customs Lab Port Muhammad Bin Qasim Karachi) are involved in the massive tax evasion and loss to the exchequer by mis-declaring the description and value of the imported fabric consignments.

As per their modus operandi, vague description of the goods as “Textile Fabric” was given in the GD, along with wrongful claim of sales tax exemption under SRO 1125(1)/2011.

Subsequently, consignment imported by M/s Spectrum Enterprises was detained at gate out stage at Port Muhammad Bin Qasim for confirming the veracity of information.

The concerned examination staff conducted physical examination and forwarded representative samples to Customs Laboratory at Port Qasim Karachi, for lab test and confirmation of description. In response, the said customs laboratory confirmed the goods as textile knitted printed pile fabric composed of polyester and knitted fleece fabric.

The importer also claimed benefit of SRO 1125 as commercial importer and goods were to be used as industrial inputs. However, the Collectorate had assessed the same on the basis of finished goods and in order to resolve the dispute, the GDs were assessed provisionally by securing the differential amount of sales tax to the tune of Rs5.655 million through pay orders.

Physical examination found the goods to be laminated fabric consisting of printed knitted dense short pile fabric composed of polyester and dyed special knitted pile fabric composed of polyester.

Based on a test report by HEJ Institute, it is established that M/s Spectrum Enterprises along with clearing agent M/s Kanwal Enterprises attempted to import and clear consignments of fleece fabric under the garb of vague description of goods as textile fabric to avoid actual valuation ruling and claiming inadmissible concessions. The accused defrauded the exchequer of Rs9.75 million.

FIR is lodged and investigations are underway.

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