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Customs Appellate Tribunal reduces penalty on M/s Ahmed Hassan Textile Mills

Customs Appellate Tribunal reduces penalty on M/s Ahmed Hassan Textile Mills

LAHORE: Customs Appellate Tribunal settled the case filed by M/s Ahmed Hassan Textile Mills against Collector of Customs Adjudication Faisalabad and others.

After hearing both parties, Muhammad Sadiq, member technical bench-II passed a judgment with remarks that there is no need to interfere in principal liability of Rs2,014,497 in taxes and duties and penalty of Rs500,000 is reduced to Rs100,000.

According to the brief history of the case, Directorate of Post Clearance Audit (PCA) conducted an audit of M/s Ahmed Hassan Textile Mills.

During the audit, it was observed that goods produced locally have not been assumed in the DTRE under scrutiny and not permissible under DTRE regime.

In this situation, the DTRE user was responsible for the payment of duties and taxes under the law and charged Rs1,840,363 in sales tax and Rs174,134 in default surcharge.

Show cause notice was issued and adjudication proceeding culminated with remarks that show cause notice stands established and department to recover short paid sales tax along with Rs500,000 as penalty.

Being aggrieved with the order, appellant filed the case before the Customs Appellate Tribunal on the grounds that there was no violation of any provisions of the law on the part of appellant, order-in-original is time-barred and same is liable to set aside but respondent denied all allegations.

After hearing arguments, Customs Appellate Tribunal decided the case with remarks that appellant shall pay short paid sales tax and penalty is reduced from Rs 500,000 to Rs100,000.