ISLAMABAD (June 29 2009): The Directorate-General of Post-Clearance Audit (PCA), Karachi, has detected massive evasion of duties and taxes on import of iron and steel products by some commercial importers with the connivance of customs clearing agents of Karachi and Lahore. Sources told Business Recorder on Saturday that the PCA had unearthed these cases of misdeclaration of imported consignments, which were cleared through Pakistan Customs Computerised System (PaCCS), Karachi. The tax fraud cases have confirmed misuse of the speedy clearance facility by some unscrupulous importers as well as clearing agents. The DG PCA has also forwarded details of a few customs clearing agents of Karachi/Lahore and importers involved in the scam to the FBR. The cases clearly reflect that DG PCA had started thorough analysis of import data to check commercial frauds being committed by importers. Analysis of data showed that commercial importers and customs clearing agents were primarily involved in this tax fraud causing huge loss to the national exchequer. The PCT headings were wrongly declared, to apply minimum rate of 5 percent duty on import of items, instead of actual rate of 20 percent duty. The customs values of the imported goods were misdeclared up to 128 percent. Sources said that disciplinary action would be taken against the involved customs officers, and FIR would be lodged against the involved importers as well as customs clearing agents. Details showed that the DG PCA unearthed massive evasion of duty and taxes by three importers through misdeclaration of description of goods, Pakistan Customs Tariff (PCT) Code, and value of the imported goods. On initial scrutiny of their Goods Declarations (GDs), cleared from Model Customs Collectorate (MCC) of PaCCS, Karachi, the evaded amount of duty and taxes was found to be Rs 36.745 million. During scrutiny of the import data of GP Sheet, it was observed that description of goods in the manifest was \'Hot Dipped Galvanised Steel Coils\', \'Galvanized Steel Coils Secondary Quality\' and \'CRC Secondary Quality\' classifiable under PCT heading 7210.4900 and 7209.1510 respectively, chargeable to custom duty @ 20 percent, whereas the importers had declared description of goods on GDs as Semi Finished Products of Iron or \'Non Alloy Steel, \'Iron and Steel Plates (Cobble Plates)\' and \'Semi Finished Product of Iron and Steel\' classified under PCT heading 7207.2090 chargeable to duty @ 5 percent. In order to verify the evident misdeclaration, the original bills of lading were requisitioned from the shipping companies under section 26 of the Customs Act, 1969, which confirmed the aforesaid misdeclaration of goods on the GDs. In order to further corroborate the evidence, L/C documents were also requisitioned from the banks, including Pro Forma Invoice, BL and commercial invoice. On examination of the documents, it was further confirmed that the importers, with the connivance of their clearing agents, had deliberately misdeclared the description of goods and PCT Code to defraud Customs. Besides above, the value of goods had also been grossly under-invoiced up to 62 percent-128 percent. As per DG PCA analysis, importer-wise details of GDs showed that the declared description of imported item in the manifest, L/C and invoice was Hot Dipped Galvanised Steel Coils. However, the declared description in GD was "Semi Finished Products of Iron or Non Alloy Steel". Similarly, the declared description of imported item in the manifest, L/C and invoice was Galvanised Steel Coils Secondary Quality. The declared description in GD was Iron and Steel Plates (Cobble Plates). The declared description of imported item in the manifest, L/C and invoice was "CRC Secondary Quality", but declared description in GD was "Semi Finished Product of Iron and Steel". From the PaCCS record it further transpired that in three cases, the assessing officers had recommended examination of the goods, which was disallowed by the Assistant Collector, and the Assessing Officers were directed to assess the goods as per declaration. It was also observed that though the assessing officers had recommended for examination, their remarks were ambiguous and not stating clearly the difference between CDI and GD declaration, despite the fact that both were visible to the Assessing Officers at the time of assessing. They also did not take up the matter with the senior management about rejection of examination requests by the Assistant Collector. The remarks of Assessing Officers and the directives of the Assistant Collector also give details of these cases. In one case, the assessing officer remarked that declaration was not precise. The GD referred to examination to confirm actual description, specification, origin, weight of the consignment. Subsequently, the concerned Assistant Collector directed that GD be assessed as per criteria and declaration. The official had given satisfactory profile of the importer. In the second case, the assessing officer remarked that semi finished product of iron or non-alloy steel was a vague description, and it may be referred for examination for confirmation of actual description/Net/Gross weight. The concerned Assistant Collector was of the view that GD be assessed as per criteria and declaration. The official had given satisfactory profile of the importer. "Call documents, if necessary", official added. In the third case, the assessing officer remarked that GD consisting 08 containers of Semi finished product of iron and steel, may be referred for examination to confirm actual description, sizes, qty 100 percent weight. The concerned Assistant Collector directed to assess as per criteria and declaration. The official had given satisfactory profile of the importer. The fourth GD was assessed as per declaration by the appraising officer, without generating examination request. "As massive evasion of duty and taxes has taken place in the aforesaid cases through fraudulent misdeclaration it will be in fitness of things that FIRs may be lodged in these case and concerted efforts be made to recover the evaded amount. Since at present this Directorate General has limited staff and faces acute shortage of officers and there is no established legal/prosecution section as yet, it is requested that the Model Customs Collectorate of PaCCS, Karachi, may be directed to initiate necessary legal proceedings in the aforestated cases," DG PCA added.