Pakistan Customs is all set to attach the industrial unit of Deewan Cement, as the Supreme Court of Pakistan has dismissed their petition against the demand created by Customs. According Customs, the company is liable to pay a mark-up of Rs1.68 billion, which the company was contesting before the Supreme Court and now the apex court has dismissed the petition. Collector Appraisement Mohammad Saleem has formed a team to calculate the interest in the last five months i.e. the time this petition was filed and this would add about Rs100 million in the total demand. The Customs is considering attachment of the factory and a notice in this regard has already been served. According to the details of the case, M/s Dewan Cement had imported various machinery and equipment during the period of 1994-1995 and claimed exemptions under SRO 484(I)/1992. On physical examination of the goods, it was revealed that goods actually consisted of solid material conveyor unit classifiable under PCT 8420. These were being manufactured locally as per CGO 17/94, therefore were not entitled for claimed exemption. Moreover, the unit of M/s Pak Land cement was not situated outside the municipal limits of Karachi at a specified distance to qualify of grant of exemption. Accordingly, the importer was directed to pay short levied government dues along with penalty totaling Rs88.748 million. The importer in response to the show cause notice stated that the determination of the distance by the Survey of Pakistan, Karachi is not in accordance with law; in the reference made by Collector of Customs (Appraisement) to FBR, the department admits the correctness of the distance; the Directorate of Intelligence in their letter to Collector of Customs Appraisement dated June 03, 1995 never disputed the distance between point A on cantonment boundary and point B at their plant for its being more than 30KMs. The importer noted that FBR had finally resolved the issue vide its letter No.1/35/Mach/90-Pt which is self explanatory and requested not to take into consideration the arbitrary report of Survey of Pakistan as the same does not represent true picture and is also not in line with the instructions issued by FBR. The importer also stated that the imported conveyor system finds place in Column No.3 of Sheet-I of Annex-II to the letter dated March 10, 1994, which enumerates the list of items not manufactured locally. The department is of the view that the unit is not located beyond the 30 miles limit as required by exemption notification and the imported goods were manufactured locally. The importer filed an appeal before Appellate Tribunal in the year 2000, which was rejected in October 2005 being devoid of merits. Pak Land cement filed a preferred in terms of section 196 of the Customs Act before the High Court of Sindh in 2006. Sindh high Court heard the case and remanded back to the Tribunal to decide it afresh after considering all aspects of the case. In case was again dismissed in November 2009. The importer then filed a rectification application, accordingly the department issued a recovery notice in terms of section 202 of Customs Act for Rs88.748 million. The importer requested the Tribunal for stay against the recovery. Tribunal directed the importer to submit the bank guarantee for the amount involved, but the Cement company failed to do so. The Tribunal therefore ordered that recovery proceedings be initiated for recovery of short levied government dues. Pak Land Cement approached SHC for grant of stay against recovery proceedings and the SHC in June 2011 directed the cement company to submit bank guarantee for 50 percent of amount involved within 07 days and asked the Tribunal to dispose of rectification application. Pak Land Cement did not submit the bank guarantee within the given time and sought extension from the Court for submission of the requisite Bank guarantee. SHC heard the application and extended time for 02 days with directives that if the importer failed to submit the bank guarantee, Customs authorities were allowed to take recovery action for recovery of government dues. Dewan Cement filed a constitution petition which was heard by SHC and decision was passed on November 11, 2012. The SHC after going through complete details of the case held that instant petition being devoid of any merit amounts to abuse of the legal proceedings, which dismissed alongwith all pending applications. Pak Land Cement (Dewan Cement) was issued a recovery notice mentioned that an amount of Rs1.968 billion including short levied government revenue of Rs88.748 million and fine, penalty and surcharge is recoverable from the company as they failed to deposit the recoverable amount in the government treasury despite repeated notices. Law Officer Mohammad Farooq Khan has played an instrumental rule in this entire episode and it was because of his efforts and dedication that the Customs defended its stance at every forum. Mohammad Saleem is reportedly recommending Khan for reward and promotion.
Posted on: Thu, 09 Oct 2014 06:39:59 +0000
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