Mohsin Siddiqui (Chief Reporter)

The Directorate of Intelligence and Investigation (I&I) encountered hurdles in recovering duty/taxes and penalties due to procedural missteps. Recovery proceedings were initiated without involving the collector of customs, leading to complications.

The Directorate imposed duty/taxes and penalties on an importer suspected of availing inadmissible exemptions, allegedly in collusion with a clearing agent and accomplices. However, the importer contested the actions, claiming they were unlawful and based on false allegations.

Investigations revealed that the importer had allegedly evaded customs duty and taxes by misusing relevant statutory regulatory orders (SROs) and misrepresenting the specifications of imported goods. Despite thorough scrutiny, including filing a First Information Report (FIR) and imposing duties and penalties, the importer refuted any wrongdoing.

The importer argued that if there were concerns about duty evasion or misuse of exemptions, the matter should have been communicated to the collector of Customs for proper jurisdiction. According to the terms of relevant SROs, the collector of customs holds exclusive authority to initiate proceedings for duty recovery.

Moreover, audits or investigations must be conducted by designated individuals or agencies authorized by the Engineering Development Board (EDB) and Federal Board of Revenue (FBR). The Directorate failed to provide authorization in line with SRO conditions, rendering its actions without jurisdiction.

Consequently, the order-in-original against the imported goods was set aside due to procedural irregularities. This case highlights the importance of adhering to legal protocols and jurisdictional requirements in customs and tax matters.