ISLAMABAD, May 13: The Central Board of Revenue (CBR) has lodged FIRs against exporters in four cases for the misuse of the Duty and Tax Remission Rules for Export (DTRE) resulting in massive loss of revenue.

An official announcement issued by the CBR said that the main accused person was chairman of Bawan Shah group of companies, Karachi, Raja Muhammad Zaraat who was arrested from Islamabad on May 4, 2006. His bail petition was disposed of by the Supreme Court of Pakistan on May 5, 2006.

Further investigation and efforts to nab the accomplices of the main accused is under progress, added the announcement.

According to the details on receipt of a complaint in December 2005, the directorate general Intelligence and Investigation (Customs & Excise) initiated investigation into the claims of sales tax refund based on fake documents filed by Bawan Shah group. On issuance of notices for submission of record, the said group submitted certain documents, which were being verified through the relevant export collectorates.

In the meanwhile, credible information was received in the customs directorate that Zaraat Khan, along with his associates was actively involved in claiming inadmissible customs rebate through the misuse of the DTRE scheme.

The announcement said that in order to further establish the misuse of the DTRE scheme by the said group, an investigative audit of the stocks of input goods lying in the premises was initiated. So far the investigation has led to the discovery of following facts: Recovery and seizure of foreign origin cloth/fabric measuring 99,026 yards and durries imported by M/s Early Morning Textiles Mills and M/s Latest Fashion stitching factory, Karachi, under the DTRE scheme and was dumped illegally.

No documents of legal import or lawful purchase of these recovered foreign origin cloth and durries could be produced. The stocks have been seized under relevant provisions of the law.

A valuation committee headed by director general valuation and post-clearance audit (customs) has been constituted to ascertain the description and quality and assess the actual value of the sealed samples drawn from the four consignments seized. The amount of the total evaded revenue would only be determined after report by the valuation committee.

In order to look into the legitimacy or otherwise of the sales tax refund/rebate claims, the relevant record of the seven units of M/s Bawan Shah group registered under the Sales Tax Act, 1990, is also being investigated.