ISLAMABAD: The Customs Appellate Tribunal (CAT) has declared the three collectors’ committee constituted by the Federal Board of Revenue illegal to decide the valuation issue involving MG vehicles scam.
According to details, Member (Judicial-1) Abdul Jabbar Quershi and Member (Technical-1) Abdul Basit Chaudhry held in their decision that the three collectors’ committee constituted by FBR is illegal without jurisdiction and void ab initio to decide the valuation issue involved in the MG vehicles scam.
In the MG vehicles case, on the directions of FBR, the provisionally assessed values of imported MG vehicles were finalized on the basis of findings of a collectors’ committee and that too on values, lower than the provisionally assessed values which were in turn lower than the values determined by PCA, the tribunal’s decision stated.
“We hold it be an illegal assessment and we are also constrained to hold that this tantamount to misuse of authority that no such special arrangement has ever been in place for any other importer by FBR for customs valuation and no such favorable and preferential treatment has ever been meted out to any importer.’ the tribunal has been held.
Tribunal has further held in its order that the whole issue gets cleared if viewed chronologically.
It is on record that when in May 2020, importer M/s JW SEZ Ltd imported 3 vehicles from M/s SAIC Motor Corporation Ltd, it was assessed at $14,793 per vehicle. However, when 2080 MG vehicles were imported in bulk by M/s SAIC motors international company limited, the assessed value fell down to $11,632 per vehicle showing a substantial decrease in the assessed values while the supplier and importer of the vehicles remained the same.
It is pertinent to note that directorate general of post clearance (south) Karachi has found that M/s JW SEZ (Pvt) Ltd, the importer of the vehicles, has caused a revenue loss of Rs823 million in the import and assessment of MG vehicles as determined on the basis of values worked out on MG china MSRP. Therefore, M/s JW SEZ (Pvt) Ltd Lahore, the importer, has committed a gross violation of the provisions of Customs Act which caused this massive revenue loss to the national exchequer.
The tribunal further held that the clearance collectorates should not have assessed the imported MG vehicles below the values assessed in the earlier import of the same vehicles affected between the same exporter and importer.
The tribunal’s decision goes on to state that the shipping bills filed by the Chinese customs for the CBU units purported to show the CIF values at $11632 per vehicle and that this had no bearing on the instant case as M/s SAIC motors international company, not being a manufacturer of the imported vehicles, issued invoices with lower values and that the exercise for verification of assessable values of the imported vehicles was just an eye wash.
The Appellate Tribunal also stated in its decision that neither the clearance collectorates nor the FBR approached M/s SAIC corporation through the Pakistan embassy for the verification of declared values of the imported vehicles.
The appellate tribunal held that it left no doubt in their minds that the declared values, the provisionally assessed values and the values determined by the collectors’ committee were all not in conformity with provisions of the Customs Act, 1969.
The Appellate tribunal stated that the charges levelled in the show cause notice stood established without any shadow of doubt and set aside the order in original which had validated the above massive revenue loss.
It will be interesting to see whether FBR will choose to challenge the appellate tribunal’s decision in High Court or will otherwise proceed against the importer and the custom officers colluding with the importer who reportedly include a custom officer sitting at the top of customs hierarchy at the time of occurrence of the scam.
This Appellate tribunal’s decision also comes as an inertia breaker and a vigorous shaker for the directorate general of custom intelligence which had earlier pushed the investigation of this big revenue loss scam under the carpet in order to save the influential importer and the colluding custom officers from accountability and punishment.
