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SHC directs M/s Farooq Corp to pay all evaded duties, taxes, fines assessed by collector

SHC directs M/s Farooq Corp to pay all evaded duties, taxes, fines assessed by collector

KARACHI: The Sindh High Court (SHC) has directed M/s Farooq Corporation to pay all duties, taxes and fines assessed by Collector of the Customs Appraisement West and the authorities will release its consignment.

A two-member bench, headed by Justice Syed Hassan Azhar Rizvi, was hearing the constitutional petition filed by M/s Farooq Corporation, challenging a show cause notice issued by the tax authorities for its alleged involvement in mis-declaration and evasion of duty and taxes of Rs992,340.

During the hearing, counsel for the petitioner argued that in order to avoid accumulation of demurrage charges, the petitioner is ready to pay all duties, taxes and fines assessed by the respondents and with regard for the penalty he is ready to furnish solvent surety in the sum of Rs 500,000 to the department concerned to their satisfaction, which will be retained by the department up to 15 days after passing of the Order-in-Original (ONO). After the arguments, the court passed order that “subject to fulfillment of the aforementioned conditions, the respondents are directed to release the consignment of the petitioner.” The court also disposed of the petition.

During the last hearing, Deputy Director Customs Tausif Amam Gurchani filed para-wise comments, informing the court that the petitioner deliberately mis-declared the description and value of the consignment to evade duty and taxes. He submitted that the petitioner has mis-declared the description and value under section 32 (1) & (2) 32 read with section 25A and 79 punishable under clauses (14) and (14A) of section 156 (1) of the Customs Act, 1969.

He argued that petition is not maintainable, therefore, may be dismissed along with listed application. After reply of the respondents, the court adjourned the hearing and directed the petitioner to file a rejoinder on the next date of hearing.

Earlier, counsel for the petitioner stated that being active importer, the company imported a consignment bearing HS Code 9503.0010 from China and filed goods declaration on December 10, 2016 on the basis of  import documents declaring the goods at $0.90/kg having total quantity of 4,590/kg (net weight ), which was selected for examination.

According to the petitioner, after examination, the customs authorities alleged mis-declaration of description of the consignment, hence, the officers concerned discarded the value declared by the petitioner. The officials assessed the goods on the basis of valuation ruling no 871/2016 issued on June 20, 2016, according to which the goods are to be assessed at the rate of $4/kg.

Citing Sectary Revenue Division, the Collector of Customs Appraisement West and the Directorate General of Intelligence and Investigation (Customs Enforcement) Regional Office Karachi as respondents, the petitioner pleaded that the court may direct the respondents to release the consignment of the petitioner on the bank guarantee immediately.

Meanwhile, sources told Customs Today that it is not yet known whether this importer used to clear consignments through mis-declaration in the past but it is likely the department would start investigation into already cleared more than 250 containers.

Sources further said that BL No.: SZGW16110729 and IGM KAPE377 Index No. 186 were also cleared through alleged mis-declaration and must be included in investigation.

Sources revealed that the accused is trying to bribe his way out with these containers without proper investigations. But Customs department including the Intelligence and the Appraisement-West are not yet picking the bait. It remains to be seen whether proper investigations into all the consignments of the accused is done on merit or he is given a green chit without any investigations in lieu of personal benefits.