The company, Nialco Alloys Limited, based in Sitakunda, had imported high-value copper and alloy scrap under the bonded warehouse facility, which allows duty-free imports of raw materials on the condition that they are used to manufacture goods for export.
Customs officials inspect seized scrap ship propellers at a Chattogram off-dock. Photo: Courtesy
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Customs officials inspect seized scrap ship propellers at a Chattogram off-dock. Photo: Courtesy
Chattogram customs officials have uncovered an attempt to evade around Tk1.71 crore in duties and taxes through bond fraud by a local export-oriented company by seizing 10 scrap ship propellers concealed in an export consignment.
The officials seized the propellers during a physical inspection of a container at Golden Container Limited, an off-dock facility in Chattogram, after finding that the shipment contained old, salvaged ship propellers instead of the declared sorted copper scrap.
The company, Nialco Alloys Limited, based in Sitakunda, had imported high-value copper and alloy scrap under the bonded warehouse facility, which allows duty-free imports of raw materials on the condition that they are used to manufacture goods for export.
According to a notification issued today (14 November) by Chattogram Custom House (CCH) and the Inland Container Depot (ICD), the company had declared an export consignment of sorted copper to Japan, valued at US$326,560.
The export bill was submitted on 3 November. Acting on a tip-off, customs officials conducted a raid at the off-dock facility at 9:45pm on 12 November and opened the container for a thorough inspection in the presence of the clearing and forwarding (C&F) agent and depot authorities.
During the inspection, they found 10 large scrap ship propellers instead of the declared copper scrap.
Preliminary investigations revealed that the company had imported copper and alloy scrap under the bonded facility on 29 September and obtained Utilisation Permission (UP) on 17 October.
Under the bonded warehouse regulations, exported products must be manufactured using the imported raw materials. However, the company allegedly attempted to export locally sourced scrap ship propellers to settle its imported raw material accounts on paper.
Customs officials said the company, located in Jahanabad, Bhatiari, Sitakunda, had apparently attempted to export low-cost domestic scrap in place of the imported copper to regularise its bonded warehouse accounts. If successful, the scheme would have allowed it to sell the duty-free imported copper scrap in the domestic market for substantial profit.
Nialco Alloys Limited is a 100% export-oriented enterprise registered in 2011. It was the first company to be listed on the SME platform of the Chattogram Stock Exchange (CSE) and raised Tk 7.5 crore from the stock market in 2022.
Chattogram Custom House has preliminarily identified the incident as an abuse of bonded warehouse facilities and an attempt to evade duties and taxes.
The customs authorities are taking steps to initiate a tax evasion case against the company.
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