Mega sales tax refund, duty draw back scam: Customs Appellate tribunal upholds verdict

Customs Appellate Tribunal has upheld the verdict of Collectorate of Customs, Adjudication-I, Custom House, Karachi of imposing a penalty of Rs 450 millions on M/s H. Sheikh Nooruddin & Sons, Lahore, for being involved in mega Sales Tax refund and duty draw back scam.
Customs, Excise & Sales Tax, Appellate Tribunal, (Special Bench), Karachi, comprising Muhammad Arif Moton, member (Judicial-II) and Javed Kazi, member (Technical-I), dismissed 14 appeals filed by M/s H. Sheikh Nooruddin & Sons, Pvt Ltd Lahore, a renowned manufacturer and exporters of tents and tarpaulins, observing that the appellants have failed to bring home his case both on factual and legal grounds.
According to the brief, a copy of which is obtained by Business Recorder, Customs Intelligence, Karachi had seized 14 consignments of tents/ tarpaulins etc in June, 2004, exported by appellant on the allegations of mis-declaring the consignments to obtain undue customs duty drawback and sales tax refunds. The collector of customs, adjudication-I, Custom House, Karachi, had passed the order to confiscate the seized goods with an option to redeem the same on payment of fine, penalty of Rs 450 millions in March 2005.
Against the ruling the accused exporter filed appeals before Customs Tribunal, Karachi, which were dismissed on September 30, 2009, observing that the Directorate General of Intelligence & Investigation had full powers to investigate even after the process of appraisement by the customs collectorate.
The Appellate Tribunal has also declared that the High Court of Sindh at Karachi vide order dated April 28, 2009, has already directed Federal Board of Revenue (FBR) to resolve the issue of compensation and return of Rs 20 million earlier deposited by the appellants with the Nazir of the Court for the release of consignment purely on merits.
The compensation claimed by the appellant is equivalent to the ascertained value of the goods and recommended by chairman National Accountability Bureau (NAB) to the chairman FBR, which is Rs 152.341 million.
In case the compensation is paid by the competent authority in lieu of goods resumed by the government, it would be tantamount to return the goods to the appellants and for redeeming or releasing of this amount, redemption fine or more appropriately fine in lieu of confiscation would need to be paid by the appellants against amount of compensation claimed by them. The penalty imposed by the officer of original jurisdiction is in accordance and commensurate with relevant provisions of Customs Act, 1969 and Sales Tax Act, 1990.
By virtue of said order the accused exporter is now liable to pay fine adjudged earlier, the order said. The appellant was represented by Mian Abdul Ghaffar Khan, ASC, whereas the department was represented by Fakhar Ali Shah, appraising officer and Shabieh Haider, intelligence officer.