NAB initiates probe into Rs933 Faisalabad dry port scam

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ISLAMABAD: The National Accountability Bureau (NAB) has started its investigation into the Rs933 Faisalabad dry port scam, sources revealed on Wednesday.

The Federal Tax Ombudsman (FTO) had recommended NAB Lahore to take up the Faisalabad dry port matter based on an inquiry report submitted by the tax department.

The tax department had conducted an inquiry into matters pertaining to import clearances through Faisalabad dry port during the period from November 17, 2011, to August 11, 2013.

The tax officials, in their findings, revealed that the commercial counsellors and the shipping lines, in order to reconcile the export and import declarations/documents, did not realize in the given timeline.

The fractional retrieval of the same resulted in partial variation of under-invoicing, misdeclaration and presentation of forged invoices.

On the basis of this fractional information, a short paid amount of duty and taxes amounting to Rs441,434 was detected in GD number FDRY-HC-773 dated 29.11.2012. Furthermore, the commercial counsellor posted in Germany informed that an invoice presented in GD number FDRY-HC-1105 dated 08-06-2012 was prima facie found bogus.

In addition, the tax department stated in the report that the scrutiny of clearance data, in the absence of factual reporting, transpired that imported goods were misclassified, resulting in short payment of duty/taxes amounting to Rs36,435,831. Through this misclassification, the items, including juice extractor, bakery roaster, coffee machine and medical equipment, imported in old and used condition, were released, which were otherwise not importable in terms of Serial 9 & 12 of Import Policy Order 2009 in vogue at that time.

The report stated that the aforementioned findings were interim and could not be concluded due to the fact that verification from all quarters could not be received due to time-bound exercise.

The audit team tried its level best to probe the prior import verifications by calling export documents from the country of origin through commercial counsellors/shipping lines and simultaneously the post-release verification of sale of imported goods by calling sales tax invoices & sales tax returns from the importers. However, no one turned up to provide complete information.

The report stated that the customs officials had also received a response from six commercial consulates based in Canada, France, Germany, Korea, Netherland, Singapore and UAE.

Commercial consulates based in France, Germany and Netherland shared that companies ‘Damstra INstallatietechneik’ and ‘Rai Enterprises’ had under-invoiced the value by $6,500.

Similarly, a company ‘All Power Solutions’ also showed involvement in under-invoicing. Moreover, documents of another company ‘Shahzad Enterprises’ showed that the record was not traceable.

The only available option with the audit team was to scrutinize the available record, critically examine the examination reports, allied reported facts as per invoice, packing list, goods declaration, and laboratory test reports in the absence of the goods, which were released and consumed during the year 2012-13.

The committee stated that in order to make the report productive, the committee was of the considered opinion that MCC Faisalabad may determine negligence of the officers/officials responsible for the revenue loss to the tune of Rs85.12 billion, the report added.

On the other hand, one official of the tax department, who was part of the forensic team, stated that the forensic audit team had concealed facts and withheld the findings to suppress crime and save the criminals in its forensic audit report.

He had requested to treat the forensic report as invalid and the same may be returned to the audit team for examining of documentary evidence of the scam which was available with the undersigned, and to resubmit the report after supplying its deficiencies, removing its circumventions and eliminating its evasiveness.

It is pertinent to mention that FBR member Shuakat Ali was the Faisalabad collector during the period when the clearance of goods was made.

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