Messrs UCH POWER LTD., ISLAMABAD VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2002 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 2945 (2002)

Customs Act (IV of 1969)‑‑‑‑

‑‑‑‑S.18B‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)‑‑‑Levy of service charge ‑‑‑Pre -shipment inspection fee‑‑‑Non‑refund of ‑‑‑Mal‑administration‑‑Complainant claimed refund of payment made as pre‑shipment inspection charges alongwith mark‑up at the rate of 15% ‑‑‑Department contended that refund claims were lodged in the Air Freight Section of the Preventive Directorate, Karachi although the subject consignments were imported through Sea Port and no claims were filed in the Appraisement Collectorate and in absence of any particular material, it was not possible to locate the subject claims‑‑‑Validity‑‑Department apparently had not been able to locate die claims filed by the claimant‑‑‑Complainant had submitted copy of letter referring to its earlier letter requesting for refund of Pre‑shipment Inspection Service Charges‑‑‑Records of Customs Department were completely silent over the subject‑‑‑Even if the letter had been addressed to wrong section of the Customs Department, it was the duty of that section to forward same to the proper section or return to the complainant with advice to follow the proper course‑‑‑Nothing was done which shows complete negligence in performance of duty and discharge of responsibilities which amounts to maladministration‑‑ Simple courtesy of acknowledging receipt of the claim was not even shown‑‑‑All these acts of omission and commission amount to maladministration‑ ‑‑Claim for 15% mark‑up could be made either under the agreement or as provided by law‑‑‑Neither there was any agreement nor any provision in the Customs Act, 1969 for payment of mark‑up in such a situation‑‑‑Federal Tax Ombudsman recommended that the complaint copy of which had been supplied to the Collector of Custom be treated as application for refund, that the concerned authority after hearing the complainant and examining such further documents as might be produced or required to be produced, pas, a speaking order within thirty days and that Central Board of Revenue to issue instruction to all its department that where any claim or application is delivered or received in a wrong section the same be forwarded to the section dealing with such cases under intimation to the complainant/applicant.

Nemo for the Complainant.

Imran Ahmed, Assistant Collector, Customs (Appraisement) for Respondent.

DECISION/FINDINGS

The complainant is an Independent Power Producer having its office at Islamabad. During the period from November 1996 to February 1997, the complainant imported various consignments and paid 2% PSI Charges in respect of 11 bills of entry through Bank Draft, the particulars of which have been given in Annexure A. This levy was challenged and the Supreme Court held that the Federal Government had no authority to charge Pre‑inspection Charges which had been recovered by the Customs Authorities as Customs Duty, the complainant filed refund claims before respondents Nos. 2, 3 and 4 but so far, no action has been taken nor any progress was intimated. It has further been stated that the complainant has not passed the incidence of 2% PSI charges to others/public. Delay in dealing with the case and refusing the refund in spite of the judgment of Supreme Court, the Customs Department has committed maladministration. Prayer has been made for refund of Rs.1,939,310 and mark‑up at the rate of 15% of the amount illegally withheld. It has also been prayed that disciplinary action may be taken against respondents Nos. 2 and 3.

2. In reply, the respondent has stated that according to complainant's own showing, refund claims were lodged in the Air Freight Section of the Preventive Directorate, Karachi although the subject consignments were imported through Sea Port. According to record of concerned Appraisement Group, no claims were filed in the Appraisement Collectorate. In the absence of any particular material, it was not possible to locate the subject claims. It has been further submitted that if the complainant provides complete particulars and details of refund claims alongwith copies of relevant bills of entry, same shall be processed on merits.

3. Mr. Imran Ahmad, Assistant Collector is present but no one has appeared on behalf of the complainant in spite of notice issued to its Advocate. After hearing the representative for the department and examining the record, it seems that the department has not been able to locate the claims filed by the claimant. The complainant has submitted copy of letter dated 3‑5‑2000 referring to its earlier letter dated 12‑12‑1999 requesting for refund of PSI Service Charges. Unfortunately, the records of Customs Department are completely silent over it. Even if the letter had been addressed to wrong section of the Customs Department, it was the duty of that section to forward it to the proper section or return to the complainant with advice to follow the proper course. Nothing was done which shows complete negligence in performance of duty and discharge of responsibilities, which amounts to maladministration. At least a simple courtesy of acknowledging receipt of the claim was not shown. All these acts of omission and commission amount to maladministration.

4. As regards the claim for 15% mark‑up, it is pointed out that such claims can be made either under the agreement or as provided by law. There is neither any agreement nor any provision in the Customs Act for payment of mark‑up in such a situation.

5. It is, therefore, recommended that:‑

(i) the complaint copy of which has been supplied to the Collector of Custom be treated as application for refund.

(ii) the concerned authority after hearing the complainant and examining such further documents as may be produced or required to be produced, pass a speaking order within thirty days.

(iii) CBR to issue instruction to all its departments that where any claim or application is delivered or received in a wrong section the same be forwarded to the section dealing with such cases under intimation to the complainant/applicant.

(iv) Compliance be reported within 45 days.

C.M.A./M.A.K./428/FTO Order accordingly.