KARACHI: Pakistan Customs Authority (PCA) South has taken decisive action against a Karachi-based textile company following allegations of an Export Facilitation Scheme (EFS) scam, involving the illegal sale of exempt EFS goods. An FIR has been lodged, implicating the directors and associates of the company in fiscal fraud and other potential offences.
The investigation into the alleged scam was initiated after a tip-off prompted DG PCA, Dr Qadir Memon, to assign the task to Director PCA South Sheeraz Ahmed.
To uncover the truth, a team comprising PCA officers, including AD (Assistant Director) Muhammad Sarfraz, AO (Audit Officer) Fahad Iqbal, and AO Imran Hyder, was constituted to conduct a physical stock-taking of the EFS goods at M/s Fairdeal Textiles premises, as per Section 26B of the Customs Act, 1969.
During a preliminary desk audit, several discrepancies were revealed based on customs, sales tax, and income tax data available with PRAL-FBR. Subsequently, a physical inspection of the factory premises on June 7, 2023, confirmed the accuracy of the information.
The PCA audit team discovered that only five metric tons of fabric remained at the factory, while a significant quantity of 106 metric tons had been illegally removed, in violation of Rule 882(2) of the EFS Rules.
The total value of the missing fabric was estimated to be Rs. 120 million, involving duty and taxes amounting to Rs. 51 million.
The importer had initially claimed that the missing goods were stored at Chaman Dry port for export and provided a hard copy of a draft GD. However, confirmation from Chaman customs revealed that the draft GD was forged.
The importer was given the opportunity to verify the EFS goods anywhere in Pakistan, even if they were located outside the factory premises. They were asked to provide truck registration numbers, drivers’ cell phone numbers, and the exact location of the truck and missing goods.
However, the importer failed to produce any corroborative information, indicating that the EFS goods had been sold in the local market, thereby being unable to confirm their location. Additionally, the draft export GD provided by the importer was found to be concocted and forged.
Consequent to these findings, PCA South lodged an FIR on June 8, 2023, for fiscal fraud under Section 32A against all directors and associates involved in the crime.
Meanwhile, investigations are also under way regarding potential money laundering activities, as the importer was found to have imported a wide range of fabrics, indicating possible misuse of their “manufacturing status” to fraudulently operate in the market.
The significant volume of fabric imports appears to be disproportionate to the importer’s financial capacity.
Efforts are being made by PCA teams to apprehend the accused individuals. The owners and directors of this Textile unit are currently at large and without bail.
Two PCA teams have been deployed to track their locations and discreetly monitor their residential addresses. Moreover, all sea and land customs export collectorates have been alerted to remain vigilant, as the accused importer may take export attempts through misdeclarations.
The PCA’s determined actions against the alleged EFS scam aim to uphold the integrity of the customs system, protect the country’s fiscal interests, and bring the perpetrators to justice. Investigations are ongoing, and further developments will be reported as they unfold.
Copyright Business Recorder, 2023
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