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Collector Mubashar Baig’s Faisalabad Customs recovers Rs 449m from M/s Maple Leaf Cement Factory

Collector Mubashar Baig’s Faisalabad Customs recovers Rs 449m from M/s Maple Leaf Cement Factory

FAISALABAD: A contravention case was made out against M/s Maple Leaf Cement Factory located in Mianwali for alleged misuse during the period from 1994 to 1996 claiming exemption of customs duty and sales tax under SRO 484(I)/92 dated 14.05.1992 read with SRO 978(I)/1995 dated 04.10.1995 and for regulatory duty under SRO 1050(I)/95 dated 29.10.1995 declaring that the plant and machinery are not manufactured locally.

While the bills of entry were under process to determine the local manufacturing status. The importer filed WP No.8842/96 in the Lahore High Court seeking clearance under the above referred notifications. The Lahore High Court ordered release of the machinery provisionally on furnishing of indemnity bond and post dated cheques.

In compliance thereof, the said plant and machinery was released provisionally after obtaining the requisite indemnity bond and postdated cheques to the extent of duty and taxes as per concessionary rates and partial exemption in terms of stay order dated 16.06.1996.

As the imported cement plant and machinery was included in the list of locally manufactured goods showing capacity up to 4000 TDP at that relevant time vide CGO No.17/1994 dated 30.10.1994.

Therefore, a show cause notice dated 04.12.1999 was issued to M/s. Maple Leaf Cement Factory for non-payment and short payment of Rs 1382.81 million on account of Customs duty and other taxes. The importer challenged the SCN by filing a WP No.6794/2000 before the Lahore High Court. The court quashed the SCN vide judgment dated 28.07.2000.

The Collectorate filed an appeal before the Hon’ble Supreme Court of Pakistan. During the pendency of the case the different importers including M/s Maple Leaf opted for resolution of the dispute through ADRC mechanism with the approval of the Court as well as Federal Board Of Revenue.

ADRC headed by Mr Athar Minallah worked out two separate lists of components of the plant that were manufactured locally and ‘not manufactured locally’ and recommended for levy of duty and taxes on the components that are manufactured locally.

However, ADRCs recommendations were not approved by the Board. Consequently the Hon’ble Supreme Court recommenced the proceedings and passed an Order dated 21.12.2011 restored the SCN and directed for adjudication of the case.

Subsequently, in compliance of the Hon’ble Supreme Court’s orders, ONO No.03/2012 dated 24.02.2012 was passed by the Collector MCC Faisalabad against the importer. The importer filed a complaint with the FTO contending that they were not heard properly before passing the adjudication order. The FTO directed for re-hearing of the case vide Order dated 25.10.2012. However in the meantime a Review Application was filed before the Hon’ble FTO on the grounds that there is no provision in the Customs Act 1969 for Re issuance of the ONO by the same authority.

The Hon’ble FTO referred the case to  the Collector Adjudication Faisalabad vide Order dated 03.05.2013 for adjudication afresh. Consequently the Collector Adjudication Faisalabad passed an Order-in-Original No. 06/2014 dated 19.07.2014 against the importer.

Being aggrieved, the importer M/s. Maple Leaf Cement Factory again filed the C.A No.172/2.014 before the Appellate Tribunal which is sub-judice before the Customs Appellate Tribunal Lahore.

The case is pending since 20 years and has completed a round of complete litigation up to Supreme Court and at present is pending before the Customs Appellate Tribunal Lahore and government revenue worth Rs.1382 million is stuck up since 1999.

Collector Mirza Mubashar Baig started putting in personal efforts on this case and directed the Assistant Collector AC Imports Ameer Ahmad not only to vigorously pursue the case at the legal forum but also made efforts in realizing the stuck up revenue from the party.  Both the officers with persistent pursuation and few rounds of negotiation have succeed in realizing the stuck up revenue under the head of Customs Duty and Regulatory duty to the tune of Rs 269 million and Rs 180 million respectively.  Though the case is still subjudice but the officers have the credit to convince the importer to recover the due amount of Custom duty CD and Regulatory duty RD.