LAHORE: The Directorate of Intelligence and Investigation (I&I) failed to recover duty/taxes on technical ground as it carried out recovery proceedings without keeping collector of customs into the loop, sources said.

According to the sources, the Directorate had imposed duty/taxes besides a penalty after finding that the importer, with the connivance of clearing agent and other accomplices, had availed and inadmissible exemption, thus causing loss to the government’s exchequer.

The importer, on the other hand, was of the view that the Directorate had acted unlawfully, without jurisdiction and with false presumption allegations on fabricated facts/basis.

According to details, the Directorate had received information the importer was involved in the evasion of customs duty and taxes by misusing relevant SRO and clearing the consignment on concessionary rate of duty instead of the actual one. Moreover, the specification of the imported goods was not in line with the one allowed by the Engineering Development Board whereas, grade/specification had also not been mentioned in the GDs and packing lists.

It was followed by a thorough investigation by the Directorate, FIR lodging and imposition of duty/taxes besides the penalty.

However, the import succeeded in proving that it was neither a case of mis-declaration nor a case of fiscal fraud. Even if there was any information about evasion of duty/taxes through an inadmissible exemption, in that case the matter was ought to be communicated to the collector of Customs, having jurisdiction and allowed the release of the imported goods.

As per the terms and conditions of the relevant SRO, the collector of customs has exclusive jurisdiction to initiate proceedings for the recovery of duty/taxes, if any, due to non- consumption or misappropriation of the imported goods. Even, an audit or investigation can only be undertaken by a specific person or agency duly designated by the EDB and FBR.

Since the Directorate failed to produce any authorization in terms of the conditions of the relevant SRO, therefore, all its actions were declared without jurisdiction, led by setting aside the order-in-original against the imported goods.

Copyright Business Recorder, 2024