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Rs4,145m tax evasion: Show-cause issued against Shaheen Air Int’l

Rs4,145m tax evasion: Show-cause issued against Shaheen Air Int’l

KARACHI: A show-cause notice against M/s Shaheen Air International Limited for its involvement in huge tax evasion of Rs4,145 million has been issued by the Office of the Collector, Collectorate of Customs Adjudication-I.

According to the details, the charges were leveled against M/s Shaheen Air International Limited that it was involved in huge duty/tax evasion of Rs 4,145 million by importing 47 aircrafts against different lease agreements and dismantling, removing and scrapping of 12 aircrafts out of the said 47 aircrafts.

As per the details, it has been reported by Air Freight Unit (AFU), MCC-Preventive, Karachi that a credible information was received to the effect that M/s Shaheen Air International Limited temporarily imported 12 aircrafts under different lease agreements of yester years and started scraping the same in the year 2014 without prior permission of Customs authorities as required under Section 79 of the Customs Act, 1969.

The sources informed Customs Today that in order to confirm the information, the complainant and a team of Customs officers from Rummaging & Patrolling Section, Jinnah International Airport Pakistan (JIAP) physically inspected the “On-ground” aircrafts of M/s Shaheen Air International Limited at Apron of JIAP on 18-06-2014.

After physical inspection, it was found that 12 different aircrafts belonging to M/s Shaheen Air International were parked in ground area behind Bay No.28 at JIAP and that the aircrafts bearing Registration Nos. AP-BIT, AP-BHA, AP-BJI, AP-BJH, AP-BIP, AP-BIR, AP-BIK, AP-BIS, AP-BIQ, AP-BHC, AP-BHB and AP-BIU with no intact fittings therein including engines etc were removed.

Subsequently, a team was formed to investigate the matter which was headed by Assistant Collector, AFU (Imports) and an appraising officer. In the meantime, M/s Shaheen Air International filed a petition No.3360/2014 dated 26-06-2014 in the Sindh High Court (SHC) for quashing the instant FIR which was in process of hearing.

It is pertinent to mention here that the Ehsan Khalid Sehbai, Chairman Shaheen Air International and Kashif Khalid Sehbai, CEO Shaheen Air International had obtained pre-arrest protective bails from SHC on 26-06-2014 which was pending confirmation by the Honorable Trial Court, but despite the fact that after obtaining the pre-arrest protective bails, yet they didn’t bother to join the investigation.

The sources further revealed this scribe that the several letters and notices under section 165 of the Customs Act, 1969 were issued to the accused to join investigation and produce the relevant documents but to no avail.

“The non co-operative attitude of M/s Shaheen Air International is creating impediments in the finalization of investigation and efforts being made to collect the documents and examine the accused persons involved in the case”, it added.

The sources further informed that the investigation carried out so far revealed that M/s Shaheen Air International entered into a deal with Siddiq Awan for the auction of the scrap of 5 aircrafts @Rs1550000, the final approval of which was given by accused Ehsan Khalid Sehbai as Chairman Shaheen Air International.

It was further surfaced that prior to the grant of final approval by accused Ehsan Khalid Sehbai, it was also approved by accused Faisal Rafique, deputy managing director (Airline Operations).

In furtherance of the conspiracy, M/s Shaheen Air International sought permission from Civil Aviation Authority (CAA), JIAP and Airport Security Force (ASF) to allow nine persons to carry out the scraping exercise and removal of the scrap from the airport without any permission from the Customs authorities thereby violating the provisions of the Customs Act aimed at evading duty/taxes leviable thereon.

During investigation, Authorities also came to know that M/s Shaheen Air International has disposed of an aircraft bearing registration/tail No. AP-BHG in 2013.

In this regard, Group Captain (Retd) Syed Yousaf Chief/Director (Procurement and Logistics) has been examined and relevant documents have been obtained which proves the involvement of M/s Shaheen Air International in the commission of offence.

The documentary evidence gathered so far proves that Syed Yousaf was the main person who maneuvered all the illegalities committed by M/s Shaheen Air International in collusion with others.

It was also known during the course of investigation that M/s Shaheen Air International had also auctioned other aircrafts to scrap dealer M/s Altaf Brother and Basharat without prior permission of Customs authorities. This aspect is under further scrutiny.

The role of Customs staff posted in Audit Section, Import, JIAP was scrutinized and the statements of the concerned officer and UDC were recorded according to which it transpired that no regular audit had been conducted either by the staff of Internal Audit Team, Post Clearance Audit (PCA) and by the staff of Audit Section. The role of Customs staff is being further probed for fixing of the responsibility.

In view of the facts and circumstances, the Customs authorities reached at the point that the accused persons namely Ehsan Ali Sehbai, Chairman Shaheen Air International, Syed Yousaf (Chief/Director Procurement & Logistics), Faisal Rafiq, DMD (Airlines Operations), S M Anwar, Director Legal Services M/s Shaheen Air International, Abriaz Ali Khan, Assistant Legal Advisor, M/s Shaheen International, Altaf and Basharat, scrap dealers thus committed an offence under Section 2(s), 32(2) & 79 of the Customs Act, 1969 punishable under clauses 8,14 &47 of Section 156(1)ibid read with the Sales Tax Act, 1990, Income Tax Ordinance, 2001 and Prevention of smuggling Act, 1977.

The Collectorate of Customs Adjudication-I has summoned the parties on 26 August-2014 for hearing.