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Post Clearance Audit moves SC against LHC decision

Post Clearance Audit moves SC against LHC decision

ISLAMABAD: The Directorate General Post Clearance Audit has filed a petition before the Supreme Court against the decision of the Lahore High Court in favour of M/s JP Construction and Trading Company. The Directorate Post Clearance has raised the law points in terms of questions before the Supreme Court as to whether the impugned order of the learned Single Judge in the Chamber of the Lahore High Court erred in law by not considering this aspect that petitioner attempted to get clearance of Prime Movers below 380 HP in violation of restrictions imposed on its import.

Whether the learned Judge in chamber has erred in law by not issuing the notice to respondent No.8 (Director Post Clearance Audit) in fiscal matter involving legitimate government revenue in millions under the garb of smuggling and fiscal fraud by violating provisions of the Customs Act 1959 and Import Policy Order 2013-15 and without providing an opportunity of hearing to respondent No.8/necessary party, who had seized the vehicles and issued notices under Section 168 and 171 of the Customs Act 1969.

These facts were deliberated and concealed in the writ petition and an impression was created that the vehicles were being held by the Collector MCC ( Appraisement ) and M/s NLC without elaborating that neither of them had any objection of their own nor had any dispute for release of the vehicles. According to the brief facts of the case for the determination of above law points, that Post Clearance Audit/petitioner issued Alert dated 30th May 2016 regarding the attempts of clearance of the Prime Movers below 380 HP under the guise of MoC OM dated 5th May 2016. However, the MCC did not pay any heed and continued to clear used Prime Movers in violation of restrictions imposed on their import.

As such, the importer was guilty of the offence of mis-declaration (knowingly makes a false statement) as defined in Section 32 and 32 A of the Customs Act 1969, got cleared restricted goods (Prime Movers of engine capacity of less than 380 HP) in violation of the provisions of Sections 16 and 79 of the Customs Act 1969 read with provisions of Section 3(1) and Section 3(3)of the Imports & Exports (Control) Act-1950 and in terms of para 9(ii)(5) and serial No.10 of Appendix C of Import Policy Order 2012 punishable under clauses 9, 14 and 14A of Section 156(1) of the Customs Act 1969.

With the introduction of fully automated system of self-clearance, the Post Clearance Audit has gained immense importance in thwarting the attempts of fraud and forgery by unscrupulous elements causing a loss to the national exchequer. The Director (HQ) Directorate General of Post Clearance Audit, Islamabad, has recently detected a major scam of import of restricted and prohibited used specialized vehicles by certain importers claiming to be construction companies. The first headway was made by seizure of eight (08) used Prime Movers at the NLC Lahore, the first-ever by the Post Clearance Audit, after these had been cleared and released by the customs authorities.

The value of these eight used vehicles is approximately around Rs 19,985,708. This is only a tip of the iceberg and it is hoped that the loss of billions of rupees caused to the State Exchequer will be unearthed despite attempts to sideline and hush up the scam. That the goods were therefore seized under Section 168 of the Customs Act 1969 on 20th and 21st June 2016 by the petitioner and notice under Section 168 of the Customs Act-1969 were served on M/s NLC not to let the seized goods be released. Since the seized goods were out of charge of customs, M/s NLC, the Terminal Operator, who were holding the goods, were served with notices not to remove, part with, or otherwise deal with the goods except with the previous permission of seizing officer since it was not practicable for the Seizing Agency to seize the goods.