Massive customs fraud by Dialog Broadband Networks

 May 29, 2016

It was revealed at the conclusion of the inquiry that Sri Lanka Customs had seized 25,000 units of CDMA telephone handsets imported by Dialog Broadband Networks (pvt) Ltd in terms of section 135 of the Customs Ordinance as liable for forfeiture for the violation of Section 47 , 50 and 50A (1) of the Customs Ordinance.

Thereafter, while the investigation were in progress Dialog Broadband Networks (pvt) Ltd had filed FR Application under SC(FR) 348/2008 in the Supreme Court and the Supreme Court ordered “that it is a matter that should be inquired into by the Director General of Customs according to law”

1. Dialog Broadband Networks (pvt) Ltd. had imported 175,800 Nos. of telephone sets and supplied to the General Public for the use of telecommunicating with any other person.

2. These telephone sets were imported for the home use by claiming Customs duty exemptions declaring such telephone sets were imported to be used for and by the enterprise… as project related capital goods by way of Custom Bill of Entries (Declaration) submitted to BOI. Section 27(2) of the BOI Act No 4 of 1978 prohibits centrepieces registered under this act to engage wholesale or retail unless authorize under the agreement

3. Accordingly, the account of the goods kept with state were false were and thereby had violated the provisions of the section 47 of the Customs Ordinance.

4. The false Customs Declarations were authenticated by Director General of Customs as Tax Invoices for the purpose of VAT.

5. A trading activity of the CDMA telephone were carried out by the company depriving the state its due revenue amounting Rs. 165,801,093.72 in the form of Custom duty and surcharge on Customs duty. Trading activity of the company with the imported telephone sets on free of Custom duty and surcharge was established as per following;