Customs Intelligence books several accused for fiscal fraud, money laundering

KARACHI: Directorate of Customs Intelligence and Investigation Karachi has lodged an FIR against several accused for smuggling of the goods to KEPZ, evasion of government revenue through mis-declaration and submission of fake and fabricated documents to hoodwink authorities.

Information was received through Director Irfan Javed regarding a fiscal fraud being committed by some unscrupulous elements for money laundering and evasion of government revenue since long, under the garb of imports of steel sheets in KEPZ.

In pursuance thereof, Superintendent SIU Dost Muhammad initiated formal inquiry against the concerned companies and relevant documents, record were procured from the concerned quarters including KEPZA, shipping agents and banks.

It was found that M/s Metallurgy International Karachi imported three consignments of Steel Sheets in Coils from South Korea. However, M/s Royal Impex (Pvt) Ltd KEPZ through mutual conspiracy with the lawful importers arranged manifestation of the cargo for KEPZ in their name through tampering of the relevant commercial invoices and packing lists etc; also concealing existence of LC referred to above.

According to law, imported goods for which foreign exchange was paid through Pakistani resources does not qualify to be EPZ cargo and cannot be processed and released as EPZ cargo. Moreover, GD for clearance of such imported can only be filed by lawful importers/owners, in this case M/s Metallurgy International for import clearance into Pakistan.

However, M/s Royal Impex KEPZ illegally filed import GDs for transportation of the goods to KEPZ under the garb of EPZ cargo through their agent M/s Cosmos Trading Development on the basis of the tampered and fabricated import documents.

Scrutiny of the available record further reveals that the imported Steel Sheets were of Secondary Quality correctly falling under PCT heading 7210.3010 and attracting custom duty of 20%, additional custom duty of 2%, regulatory duty 5%, sales tax 17%, additional sales tax 3% and income tax 6% ad val.

 On contrary, M/s Royal Impex (Pvt) Ltd mis-declared the same as of Prime Quality with wrong PCT heading 7210.3090 attracting custom duty 11%, additional custom duty 2%, regulatory duty 5%, sales tax 17%, additional sales tax 3% and income tax @6% ad val; at the time of their subsequent export to tariff area.

Subsequently, they exported the impugned goods into tariff area of Karachi to M/s Royal Steel, Karachi and got the same cleared on payment of duty and taxes against the mis-declared particulars on the basis of forged documents.

They also availed undye FTA benefit of Customs duty exemption mis-declaring orging of the goods as China against the actual origin of goods South Korea mentioned by M/s Royal Impex in the import GDs at the time of entry of the consignment into KEPZ.

The importers evaded government revenue to the tune of Rs70.36 million along with unauthorized flight of capital of $1.36 million from Pakistan under the garb of import of the consignments into Pakistan.

It is established that foreign exchange has been transferred from Pakistan on behalf of M/s Metallurgy International Karachi under the garb of import of the impugned goods into Pakistan. However, the goods have illegally been diverted to KEPZ (a foreign territory) on the basis of the tampered and fabricated false import documents & false statements and evaded huge amount of government’s legitimate revenue through gross mis-declaration.

Undoubtedly, it constitutes un-authorized flight of precious foreign exchange from Pakistan, fiscal fraud, smuggling and evasion of duties & taxes. Inquiries made into the matter have further revealed that one Muhammad Abdullah S/o Muhammad Akber of M/s Cosmos Trading Development  is master mind of this scam.

An FIR is lodged against M/s Metallurgy International, M/s Royal Impex, M/s Royal Steel, M/s Cosmos Trading and Muhammad Abdullah. Investigations are underway.

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