KARACHI: Customs Appellate Tribunal has upheld the Customs adjudication judgement in the case of M/s Pak Suzuki Motor ordering the company to pay the evaded government revenue and penalties thereof.
M/s Pak Suzuki Motor Co. imported various consignments consisting of raw materials, assemblies, sub-assemblies, components, and sub-components. These goods were declared and released through the WcBос System as per the company’s declarations.
However, a subsequent desk audit conducted by the Director General of Audit Inland Revenue & Customs (South), Karachi, revealed discrepancies. The audit, which covered import data from the Collectorate of Customs Appraisement (PMBQ), Karachi, for the period from July 2021 to December 2021, found that Pak Suzuki Motor Co. imported goods under SRO 655 & 656 (1)/2006. These imports, intended for vehicle manufacturing, attracted an additional customs duty under SRO 845(1)/2021.
The audit report highlighted that Pak Suzuki Motor Co. availed exemptions on additional customs duty (ACD) under SRO 845(1)/2021. According to the audit, these exemptions were only applicable to cars, jeeps, and light commercial vehicles in completely knocked down (CKD) condition up to 1,000cc and vehicles in completely built-up (CBU) condition up to 850cc. However, the company imported sub-components, components, sub-assemblies, assemblies, and materials, which did not qualify for the exemption.
The Collectorate’s allowance of these exemptions resulted in a significant loss of government revenue, amounting to Rs. 980,944,815 across 1,071 cases. The audit concluded that Pak Suzuki Motor Co. deliberately availed inadmissible exemptions, evading legitimate government revenue to the tune of Rs. 3,034,538.
Customs Adjudication upheld the charges of mis-declaration and revenue evasion, ordering Pak Suzuki Motor Co. to pay the evaded amount along with a penalty of Rs. 0.5 million. Dissatisfied with the decision, Pak Suzuki Motor Co. approached the Customs Appellate Tribunal. In response, Collector Port Qasim Fayyaz Rasool appointed Appraising Officer Muhammad Riaz, known for his competence and bold prosecution, to handle the case.
This case highlights the ongoing challenges in ensuring compliance with customs regulations and the importance of thorough audits to safeguard government revenue. The outcome of the appeal will be closely watched by industry stakeholders and regulatory authorities alike.
Mr. Amanullah Soomro comprehended the whole issue in light of the all the relevant and changing SROs and vigorously pursued in the Appellate Tribunal. He was duly assisted by the Assistant Collector (Law), Mr. Taufiq Shaikh.
The concerning appraiser, Mr. Riaz did all data analysis scrutinising previous clearances of Pak Suzuki Motors and detected that the said importer has been availing inadmissible exemption.