Post-Clearance Audit Lahore launches landmark criminal proceedings after textile mill illegally offloads duty-free cotton into the local market.
LAHORE: The Federal Board of Revenue (FBR) has arrested an accused individual involved in misusing the Export Facilitation Scheme (EFS). The fraudulent operation caused a loss of over Rs116 million to the national exchequer.
The enforcement action was executed by the Directorate of Post-Clearance Audit (Central), Lahore, a specialised arm of the FBR.
The investigation was initiated after the Directorate received credible intelligence that M/s Idrees Textile Mills Limited, located in Nankana Sahib, was misusing its EFS facility. The company was allegedly disposing of duty-free imported raw cotton directly into the domestic market. This act constitutes a direct violation of the Customs Act, 1969, and the strict conditions prescribed under the state’s export facilitation frameworks.
Audit Exposes Massive Shortage of Raw Materials
Following the tip-off, the Directorate commenced formal audit proceedings and conducted a surprise physical stock verification at the registered premises of the textile unit.
The physical stock-taking established a substantial shortage of imported raw materials cleared under the tax-free scheme:
• Total Shortage Volume: 544,212 kilograms of imported raw cotton.
• Assessed Market Value: Rs471.186 million.
• Evaded Customs Duty and Taxes: Rs116.506 million.
Consequently, a First Information Report (FIR) was formally registered against the owners and directors of M/s Idrees Textile Mills Limited. The charges relate to fiscal fraud, the unlawful removal of bonded goods, misdeclaration, and the blatant evasion of state duties.
Factory Raid Leads to High-Profile Arrest
On 2 June 2026, staff from the Directorate raided the factory premises in a coordinated enforcement operation. The team successfully arrested one of the key accused, Mr Kashif Imran. Authorities allege that Imran actively facilitated and assisted in the illegal disposal of the duty-free imported goods.
Breakdown of the EFS Fraud Case
| Case Metric | Investigation Details |
| Accused Entity | M/s Idrees Textile Mills Limited |
| Primary Offence | Illegal local offloading of duty-free imported cotton |
| Tax Loss Evaded | Rs116.506 million |
| Key Arrest Made | Mr Kashif Imran (Facilitator) |
| Legal Framework | SRO 1655(I)/2025 under Customs Act, 1969 |
First Criminal Proceedings Under Amended EFS Rules
This case represents a critical enforcement milestone for the country’s tax administration. It stands among the very first criminal proceedings initiated by the Directorate of Post-Clearance Audit (Central), Lahore, following a recent legal expansion.
The Directorate was granted enhanced powers to register FIRs and launch criminal trials under the amended EFS framework introduced through SRO 1655(I)/2025.
The FBR reiterated that it remains deeply committed to protecting government revenue whilst simultaneously facilitating legitimate, compliant businesses. The bureau warned that it will continue to take strict legal action against any corporate entities or individuals involved in revenue fraud or the misuse of national trade facilitation schemes.
