The Customs Bond Commissionerate (CBC) in Dhaka has found two export oriented apparel companies guilty of about Tk 12 crore duty evasions misusing duty free bonded facility.

The CBC officials, during a spot inspection on Wednesday detected that the two companies, both concerns from same mother company have evaded Tk 11,99,99,056.47 as the raw materials counted in the company’s private warehouse were found exceeded from the registered quantity mentioned in the bond register.

The companies are KC Apparels Limited and Knit Concern Limited, both 100% export oriented composite knit industry housed at Godanail Road in Narayanganj.

CBC officials said that a team of four officials on March 21 paid inspection to the factories.

During their visit at KC Apparels, it was found that there were huge dissimilarities between the count of raw materials stored in private bond warehouse and production floor of the factory, with the bond register of the company.

The private warehouse means the place where dutiable goods imported by or on behalf of the licensee are stored. The officials found that the raw materials stored in the company’s private warehouse have exceeded from the registered quantity.

According to an inspection report by CBC, KC Apparels has stored 985920kg of cotton yarn, which were imported abusing the bonded facility. The original value of the material stands at Tk 197607945.60, while its taxable value is at Tk 201579865.31. With this act, the company has evaded tax of Tk 7,47,32,671.05.

As per the another inspection report prepared in same factory, the inspection officials found additional 374871.40 kg chemical and 13990 kg dyes in its warehouse and 360971.25 kg of salt was found less while compared to the bond register.

The price of the raw materials values Tk 123241649.35, where the taxable value of the product stands at Tk125718806.50. The inspection found that the company has evaded Tk3,92,82,068.24 through misuse of duty free bonded facility.

Meanwhile, on the same day, the CBC officials paid an inspection to Knit Concern Ltd, where they found huge dissimilarities of information between spot count and information stored at the bond register of the company.

According to the inspection report, the company has stored additional 25,849kg chemical and 15,125 kg dyes, while 98,150kg of salt was not found stored in the bond warehouse.

The total value of the raw materials stands at Tk18691514.45, but it stands at Tk19067213.89 if duties are imposed on it. With this count, CBC officials found that the Knit Concern Limited has evaded Tk5984317.18.

The taxmen can now confiscate the goods and the people behind the irregularity can now be liable to a penalty not exceeding (five times) the value of the goods, according to the sections of Customs Act, 1969.

The section also empowers the taxmen to punish the guilty of rigorous imprisonment for a term not less than three months but not exceeding two years.

CBC officials said that a group of corrupted businesses made huge amount of money after availing bonded warehouse facility, a duty waiver benefit on import of raw materials only for the export oriented industries.

Currently, export-oriented factories can avail the duty-free facility on import of raw materials on condition of export of the finished products manufactured with the inputs.

The core condition for availing this facility is that the exporters cannot sale the finished products produced with duty-free imported raw materials on the local market.

CBC sources said that some 6,197 export oriented factories are now availing bond licenses, among which, 3,909 are active importers and exporters. Among them, 80% of the factories are from RMG sector.

A section of businesses are misusing the benefits and selling the raw materials in local market violating the conditions, a high official said.

He said that the benefit is mostly abused by the RMG factories mostly.

However the official said that CBC can only detect part of the irregularity, but it cannot monitor every benefit takers due to lack of manpower.