Customs Act (IV of 1969)-----

----Ss. 33 & 30---Finance Ordinance (XII of 1982)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9-- Refund---Surcharge---Refund claimed on the ground that surcharge was levied @ 10% instead of 5% which was actually leviable, was not decided after lapse of about 10 years---Validity---Without going into the question whether or not the correct rate of surcharge was applied or whether refund was due or not, it was observed that it was a case of maladministration in that the application for refund filed for more than 10 years back was still pending disposal---Department was not even sure whether or not the case had been processed in past or whether it was rejected or accepted---Department should reconstruct the refund claim with the help of the complainant by associating him in the task of its reconstruction and case should then be decided on its merit forthwith-- Delay caused also called for an enquiry to determine the case of delay and to pinpoint the responsibility for the same---Federal Tax Ombudsman recommended that Revenue Division was to direct the Customs Authority, to reconstruct the relevant files of the complainant in the manner as indicated and decide the refund claim of the complainant on its merits, in accordance with the provisions of-law, without loss of time and initiate an enquiry to investigate the causes of inordinate delay that had occurred in the processing/deciding of the refund claim filed by the complainant long ago and identify the persons responsible for delay for taking appropriate action against them for causing inexcusable delay in the disposal of the claim.

Muhammad Aslam for the Complainant.

Zulfiqar Ali Chaudhry, DC (Customs), Lahore for Respondent.

FINDINGS/ORDERS

It is a complaint against Customs Authorities, Dryport, Lahore for causing abnormal delay in the payment of refund of the amount of import surcharge allegedly charged from the complainant at the rate of 10% which was snore than the then leviable rate. Brief facts as narrated in the complaint are that the complainant had imported synthetic filament yarn and acrylic yarn and moved it into a bonded warehouse. On exbonding, he was charged import surcharge @ 10 % instead of 5 % . Although he had filed the. refund claim on 24-11-1990 for refund of the excess amount charged at the rate of 10% instead of 7% the correct rate of surcharge leviable was 5 % and not 10 % . After filing the refund claim the complainant kept on reminding the respondents to decide and sanction it within two months of the filing of the claim in line with C.B.R.'s and Wafaqi Mohtasib's instructions, yet the respondents did not react. The complainant had also moved the Customs Authority to refund the amount of Rs.223323 failing which he would be constrained to take the matter to FTO. Although a period of 12 years has elapsed yet no decision has been made, which is tantamount to maladministration. The respondents may be directed to refund the amount charged in excess and also to pay profit at khas deposit rate on account of delay in finalizing the matter. Action may also be taken against officers responsible for causing inordinate delay in deciding the case.

2. In the written reply the respondents have stated that the goods (filament yarn) cleared by the complainant from the bonded warehouse were charged to 10% surcharge, which was levied vide Ordinance No.XII of 1982. The then prevalent rate of surcharge was 10% which was payable on the dates of filing of ex-bond bills of entry. There was no cause for the complainant to file the refund claim as the surcharge was correctly levied. The record of the case, being very old, is not traceable. It is, therefore, not possible to comment on the complainant's reminders. Efforts are being made to trace out the relevant files or, alternatively, the files will have to be reconstructed., As soon as the files are located/reconstructed, refund case will be decided on merit. The possibility of rejection of refund claim, as it appears to be inadmissible, cannot be ruled out because the surcharge was correctly levied at the rate of 10% and no refund was due. The person acting as Attorney is a professional and habitual complainant. The Honourable FTO had in an earlier case passed adverse remarks against him and had also imposed fine on him. The power of attorney in his favour may be got verified.

3. During the hearing the complainant stated that the goods were imported in the years 1989-90 vide different bills of entry. Import surcharge was levied at the rate of 10% instead of 5%, which was actually leviable. According to Customs Tariff (6th addition)) the surcharge was leviable at 5 % ad valorem whereas the respondent charged it at 10% for which he had filed the refund application in November, 1999 and reminded the respondents through various reminders, the last reminder being of 16-12-2002, but the respondents have not finalized the matter.

4. The respondents contended that the import pertains to 1990. The record is not available. It is not known whether the refund application was accepted or rejected. On receipt of complainant's letter, dated 16-12-2002, the respondents tried to locate the relevant record but did not succeed. An amendment was made in Ordinance XII in 1982, which took effect on 1-7-1990 whereby the rate of surcharge was enhanced from 7% to 10% w.e.f. 1^st July, 1990. Although the Bills of Entry were filed in June, 1990 before enhancement of the rate of surcharge the goods were cleared from the bond in the months of August/September/ October, 1990 by which date 10% surcharge had become applicable because at that time, according to section 30 of the Customs Act, .1969, in cases where duty and taxes were not paid within seven days of the filing of ex-bond Bills of Entry, the rate of duty/taxes had to be taken as the one applicable on the date of actual payment of duty. Questioned as to whether the department can trace the case files, the D.C. representing the respondent stated that it was not possible. He, however, proposed that since the relevant papers, including the original refund application, Bills of Entry, the proof of payment etc. are not traceable, the best course to resolve the issue would be to reconstruct the files with the help of the complainant's record and decide the refund application of the complainant on its merit, in accordance with the provisions of law.

5. The arguments of the parties and the record of the case have been examined and considered. Mr. Muhammad Aslam, the Attorney of the complainant, has placed on record a General Power of Attorney, which was given to him by the complainant in 1989 authorizing him to represent his cases before the Customs Authority. He could,, therefore, represent the complainant. The extract of Customs Tariff produced by the complainant shows the rate of surcharge as 5 % whereas the information placed on record by the respondents shows that the import surcharge was first enhanced from 5 % to 7 % and subsequently to 10 %. While the contention of the complainant is that he had been charged import surcharge in excess of what was payable by him, the respondents hold otherwise by stating that at the relevant time the goods were leviable to 10 % surcharge. Without going into the question whether or not the correct rate of surcharge was applied or whether the refund was due or not, it is observed that it is a case of maladministration in that the application for refund filed more than 10 years ago is still pending disposal. The respondents, on the other hand, contend that they are not even sure whether or not the case had been processed in the past or whether it was rejected or accepted. Anyhow, the course of action proposed by the representative of the respondents is the best way out. The respondents should re-construct the refund claim with the help of the complainant by associating him-in the task for its re-construction. The refund case of the complainant should then be decided on its merit forthwith. The delay caused in the case also calls for an enquiry to determine the cause of delay and to pinpoint the responsibility for it.

6. Accordingly, it is recommended that the Revenue Division:--

(i)Direct the Customs Authority, Dryport, Lahore to re-construe the relevant files of the complainant in the manner as indicates above and decide the refund claim of the complainant on its merits, in accordance with the provisions of law, without loss of time.

(ii)Cause an enquiry to investigate the causes of inordinate delay that has occurred in the processing/deciding of the refund claim filed by the complainant so long ago and identify the persons responsible for delay for taking appropriate action against them for causing inexcusable delay in the disposal of the claim:

7. Compliance report to be submitted within 30 days of the receipt of this order.

C.M.A./699/FTOOrder accordingly.