Pakistan’s MCC Appraisement East has engaged the services of Advocate Khalid Mahmood to scrutinize the import of 50 units of electric buses by M/S CAUSIS Mass Transit (Pak), which sought clearances at a declared value of USD 45,000 per unit. The customs officials found no evidence of similar goods at that value in the database within 90 days. This raised suspicion of an attempt to evade a huge amount of duty and taxes, given that a number of such buses were due to be imported under a $3.6 billion agreement with the Transport and Mass Transit Department of the Government of Sindh.
According to credible information received by Collector Appraisement East Aamir Thaim and passed on to Additional Collectors Umar Shafique and Mushtaq Shahani, the importer was suspected of trying to create evidence for a much lower value of the buses to evade duty and taxes when a large number of buses are anticipated to be imported in the coming months.
The importer, clearing agent, and the concerned shipping agent were asked to provide all relevant documents, including documents submitted at the port of loading, as no local agent of the manufacturer of the impugned buses was available in the country for ascertaining MRSP as per the procedure laid down under CGO 14/2005. The Shipping Agent M/s Seahawk (Pvt) Ltd provided China Customs’ Export GD relevant to these particular imports submitted to the shipping agent at the time of acceptance of cargo in China. Later on, the shipping agent finally provided all these GDs (duly certified).
To determine the actual value of the imported electric buses, the export GDs filed with Chinese Customs were tallied with the GD filed by the importer/agent in Pakistan. The description and specification of the goods, port of loading and discharge, and the chassis numbers as given in the Import GDs were found to be consistent with the description and specification of the goods, port of loading and discharge, and the chassis numbers mentioned in the aforementioned China Customs’ Export GDs. The export GDs showed that the declared FOB per unit value was $211,330. Accordingly, the value of goods, after adding freight, etc., in the light of evidential export GDs, came to $214,300 per unit.
As a result, the Customs officials framed contraventions and leveled charges of mis-declaration of value against the importer. However, being aggrieved, the importer filed appeals, and the Customs Appellate Tribunal, Karachi allowed the appeals, ignoring the material facts of the case, and directed for assessment under Section 25 of the Customs Act, 1969.
Given the revenue implications and technicalities/questions of law involved in this case, MCC Appraisement East filed subject SCRAs, and Advocate Khalid Mahmood was engaged to scrutinize the import of electric buses. The decision of the Customs Appellate Tribunal, Karachi, to direct for assessment under Section 25 of the Customs Act, 1969, has led to further uncertainty in this matter. It remains to be seen how the matter will be resolved and what impact it will have on future imports of electric buses in Pakistan.