Phony steel items' exports to Afghanistan: FBR to initiate adjudication proceedings

The Federal Board of Revenue has decided to initiate adjudication proceedings against six manufacturers/exporters involved in fake exports of steel products to Afghanistan by grossly misusing the facility of 'manufacturing bond' scheme. Sources told Business Recorder here on Thursday that the FBR has taken action on a report of Model Customs Collectorate (MCC) Appraisement Lahore against the fake exports of steel products to Afghanistan.
Details revealed that it is already in Board's knowledge that MCC Peshawar lodged FIRs against the six manufacturing bonded warehouse licensees on account of fake/phony exports of steel products to Afghanistan. Pursuant to MCC Peshawar's letter C.No FIR No 89-93/2012-69 dated 11.01.2013, MCC Collectorate Lahore immediately blocked clearance of the aforesaid licensees under SRO 450(1)/01 and issued show cause notices for cancellation of their licenses in terms of Rule 344 of Customs Rules 2001, notified vide aforesaid SRO. During hearing proceedings, the licensees asked for provision of certain record from MCC Peshawar to file their replies. However, despite repeated requests by Lahore Collectorate, MCC Peshawar did not provide the requisite record, rather MCC Peshawar vide letter C.No FIR No89-93/2012/856 dated 15.04.2013 informed as follows: "It is to inform that Challan alongwith all relevant record of respective FIRs cases pertaining to fake/ fraudulent export lodged / registered against different manufacturing units falling in the jurisdiction of Lahore Collectorate have already been submitted in the Court of Special Judge Customs, Taxation and Anti-smuggling, Peshawar. Therefore, the legal counsels of the concerned accused licensees may kindly approach the said Court for procuring the requisite documents".
In pursuance of Boards directions vide letter C.No 3 (3)AS&C/2013, MCC App-raisement Lahore constituted a special task cell to recover the evaded amount of duty and taxes, and to apprehend the culprits. The members of the Task Cell conducted raids on the known addresses of the licensee, and it transpired that all the aforesaid licensees have been granted bails by Special Judge Customs KPK. As regards recovery of the evaded amount of duty and taxes, it is pointed out that MCC Peshawar has not provided any information in respect of adjudication of the cases pertaining to aforesaid licensees. Reportedly, these cases are still under adjudication; therefore, the MCC Appraisement Lahore is not in a position to recover detected amounts from the aforesaid licensees.
Notwithstanding the aforesaid facts, the task cell has succeeded in persuading the said six licensees to deposit certain portion of detected amounts in the form of securities. M/s Bashir Pipe Ind (Pvt) Ltd obtained a restraining order dated 10.04.2013 against blocking of clearances by the Collectorate. Accordingly, they have been granted provisional permission for import and export under SRO 450(I)/01 dated 18.06.2001. In addition thereto, the other licensees namely M/s Modern Pipe Mills, Paramount Steel Traders and M/s Fas Tube Mills & Engineering Ind (Pvt) Limited have been allowed provisional permission for export of steel products to Afghanistan in term of Board's above referred letter dated 14.03.2013, MCC Lahore said.
In order to finalise the pending issues pertaining to aforesaid licensees ie adjudication of cases in terms of rule 344 of Customs Rule 2001 and recovery of huge evaded amounts, the Board is requested to kindly direct MCC Peshawar to undertake immediate measures for early finalisation of adjudication of contravention cases enabling this Collectorate to recover the balance amounts from the licensees besides deciding the fate of their manufacturing bonded warehouse licenses under SRO 450(I)/01 dated 18.06.2001, Model Customs Collectorate (MCC) Appraisement Lahore added.
The MCC Peshawar has also informed the FBR that certain manufacturers-cum-exporters have attempted to make flying export in violation of the relevant provisions of Customs Act, 1969 for export of MS Pipe and polyethylene bags under the regime of Manufacturing Bond, which caused a huge loss of revenue to the national exchequer. Therefore, FIR No 89, 90, 91, 92 & 93 of 2012 have been lodged under the relevant provisions of law, against the proprietors and management of the units for their involvement in making flying export. The manufacturers/exporters are licensed under Chapter XV (Warehousing) of Customs Rules, 2001 notified vide SRO 450(I)2001 dated 18.06.2001 by Collector MCC Islamabad/ Lahore. It is, therefore, requested that action under relevant provisions of the Custom Act, 1969 and rules made there under, may be taken against the said units for violation of notified procedure and fake export resulting in voluminous damage to the national exchequer, MCC Peshawar added.