(a) Customs Act (IV of 1969)‑‑‑--

‑‑‑‑S.2(s), 32(2) & 139‑‑‑Import Policy Order, 1998‑99, Chap.2‑‑ Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)‑‑‑Import of freely importable goods‑‑‑Charge of smuggling‑‑‑Appellate Tribunal, having found that there was nothing on record to demonstrate that an attempt to remove the goods as old and used items without payment of duty and taxes was made, set aside the order of the Collector and directed to allow relevant provisions of law to be followed‑‑‑Despite clear directions to allow the relevant provisions of law to be followed, case was sent to the Collector (Adjudication) for initiating proceedings based on the same show‑cause notice which had been set aside‑‑‑Instead of allowing the complainant to file bill of entry for clearance of the imported consignment on payment of leviable taxes, various hearing memos. were issued‑‑‑Goods were seized and auctioned without informing the complainant in violation of the Tribunal's order‑‑ Validity‑‑‑Collector should have allowed the complainant to file documents for clearance of goods imported by him, which was not done‑‑‑All the actions taken by ‑the Customs Authorities, right from the beginning, were arbitrary, contrary to relevant law, against established procedure and without valid reasons‑‑‑Framing the charge of misdeclaration and smuggling against the complainant on the basis of the Import General Manifest and the bill of lading was without legal authority‑‑‑Seizure of goods, shifting from the sea port to the city, and the auction without notice to the importer were also illegal and without jurisdiction‑‑‑Fresh proceedings and issue of notices of hearing were actions in defiance of the Tribunal's order‑‑‑Customs Authorities had defied the provisions of the Customs Act, 1969 and the charge of serious maladministration was established‑‑‑Federal Tax Ombudsman recommended that Central Board of Revenue to institute an inquiry to identify the officials responsible for the illegal acts committed in the seizure, confiscation and disposal of goods, and take suitable disciplinary action against them and to direct the Collector of Customs to pay the sale proceeds to the owner of goods in accordance with the provisions of Customs Act, 1969.

(b) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑--

‑‑‑‑S.9‑‑‑Jurisdiction, functions and powers of the Federal Tax Ombudsman‑‑‑Non‑compliance of Appellate Tribunal's directions‑‑ Complaint against‑‑‑Department pleaded that case was sub judice before the Collector of Customs; and the Federal Tax Ombudsman had no jurisdiction‑‑‑Validity‑‑‑Appellate Tribunal had given direction which was to be followed by the Department but instead of following it they had adopted a completely arbitrary procedure which was contrary to law‑‑‑Federal Tax Ombudsman had jurisdiction in cases where maladministration was alleged in respect of process, proceeding or order that may be taken or passed by any tax employee‑‑‑Process adopted and action taken by the Collector were contrary to law and therefore, the Federal Tax Ombudsman had jurisdiction to investigate into the allegation of maladministration.

(c) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑

‑‑‑‑S.2(3)(v)‑‑‑Maladministration‑‑‑Mere quoting wrong provision of law was no ground for rejecting the complaint‑‑‑Facts relating to maladministration attracted the provisions of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000.

Rana Zahid Hussain Khan, Consultant.

Dr. Iftikhar Ahmad, Deputy Collector of Customs, Hub, Quetta Collectorate.

FINDINGS/DECISION

Mr. Muhammad Durra, proprietor of a shop in Gwadar, has filed a complaint against the Collector of Customs and Central Excise, Quetta, for deliberate non‑implementation of the orders passed by the Appellate Tribunal vide No.1140 of 1999 dated 27‑10‑2000. The complainant stated that he was residing and working in the UAE where he purchased a consignment of goods, out of his earnings, which were freely importable in Pakistan and handed it over to a shipping company in Dubai with full and true declaration of description and quantity of the goods. The consignment was imported vide bill of lading dated 7‑9‑1998 and IGM. dated 15‑9‑1998 from Dubai to Gwadar goods were unloaded in Gwadar under the supervision of Customs Authorities and shifted to the bonded warehouse adjacent to the Custom House where all‑non‑duty‑paid goods were kept in customs lock and key under Customs armed guards. The warehouse was under the Custom's administrative control. A team of Customs Officials headed by the Assistant Collector (Preventive), Quetta, visited the Gwadar Custom House for examination of the consignment in respect of which an information was allegedly received by the Collector that an attempt would be made to smuggle them into Pakistan.

2. The complainant stated that after examination, the goods were seized by the Customs team on the allegation of attempt of smuggling and shifted from Gwadar warehouse to Quefta warehouse. A show‑cause notice dated 30‑10‑1998 was issued to him and he replied through his advocate that the goods were imported by him legally and the seizure was ultra vires and without lawful authority. The Collector of Customs confiscated the goods vide order dated 5‑12‑1998. He filed an appeal before the Appellate Tribunal and the Tribunal, vide order, dated 27‑10‑2000, set aside the order of the Collector of Customs. The Tribunal held that there was nothing on record to demonstrate how a conclusion as mentioned in the Order i.e. "attempt was made to clandestinely remove these goods as, old and used items without payment of duty/taxes thus, the passenger committed an offence under section 2(B) of the Customs Act, 1969" was drawn. The Tribunal remarked that the Collector lost sight of the provisions of law and proceeded to deal with the case merely presuming the possible intention of the importer without affording him the opportunity of filing the documents as prescribed under the law. The Tribunal directed the Collector to deal with the case by allowing relevant provisions of law to be followed based on the outcome of which proceedings, if wanted, might be initiated.

3. The complainant stated that despite clear directions to the Collector to allow the relevant provisions of law to be followed, he sent the case file to the Collector (Adjudication) for initiating proceedings based on the same show‑cause notice which had been set aside. The complainant sent a letter to the Collector (Adjudication) highlighting the salient features of the Tribunal's order with the request to refer back this case to Collector, Quetta, as the order of the Tribunal dated 27‑10‑2000 had attained finality. When the Collector (Adjudication) referred the file back to Collector, Quetta, the latter, instead of allowing the complainant to file the bill of entry for clearance of the imported consignment on payment of leviable taxes, issued various hearing memos. The complainant stated that he has learnt that his consignment has already been auctioned by the Collector on lower value without informing him in clear violation of orders of the 'tribunal. He did not expect justice from the Customs Authorities, he has been facing hardship for the last four years and approached this forum with the complaint on the following grounds:‑‑

(1)The goods had .not been declared by the owner as baggage. Even for baggage a declaration must be made by a passenger under section 139 of the Customs Act. No baggage declaration form was delivered by the complainant to the Customs Officers and no questions regarding the imported goods were put to him. The superior Courts have ruled that it was obligatory that an opportunity to make declaration must be given to a passenger.

(2)Even the import of banned items in the baggage would not constitute attempt to smuggle in the absence of evidence that he gave false declaration or the goods were secreted to avoid detection. The consignment was still under the control and supervision of Customs Authorities when it was examined and seized. The whole proceedings were ultra vires and

without lawful authority.

(3)The goods were not brought in breach of any prohibition or restriction; they did not fall in the category of precious metals, jewellry, precious‑stones or narcotics. The goods were freely importable and were brought into Pakistan through a declared and notified route. The charge of smuggling was set aside by the Tribunal.

(4)The complainant did not deliver any customs document to the Customs Authorities. Similarly he did not make any statement and no question was put to him by any Customs Officer. The case made out under section 32 of the Customs Act was set aside by the Tribunal.

(5)The goods were imported by an Overseas Pakistani from his own foreign exchange earnings and he was ready to pay all duty and taxes. Under Chapter 2 of Import Policy Order 1998‑99, Overseas Pakistanis were eligible to import goods worth $10,000 from their own foreign exchange earnings. It is not understood why the Collector ordered confiscation of goods which were purchased by the complainant from the savings of his life‑time labour in a foreign country.

(6)He has reliably learnt that the goods which had been assessed by the Collector at Rs.5,11,133 have been auctioned for approximately at Rs.10,00,000. The Collector may be ordered to make the payment of Rs.5,11,133 to the complainant.

5. The complainant requested that order may be issued that (i) no further proceedings be conducted in pursuance of the show‑cause notice already repudiated by the Tribunal, (ii) the Collector should release the goods on payment of duty and taxes, and if the goods have been auctioned, the Collector should pay Rs.5.11,133 as assessed by the Customs at the time of seizure, (iii) the auction of goods be declared illegal and unlawful and violative of the clear orders of the Tribunal, and (iv) the complainant is entitled to mark‑up @ 2 % per month from the date of seizure.

6. The Assistant Collector (Law) responded to the complaint that since the case was still under adjudication for smuggling of contraband goods by misdeclaration, the complaint be rejected. He stated that the case was sub judice before the Collector and could not be entertained by the Federal Tax Ombudsman at this stage. Replying to the arguments advanced by the complainant's consultant, the Assistant Collector stated that the complainant had declared in the bill of lading and in the import general manifest that the goods were used household items but on examination these were found to be brand new items, in original packing and in huge commercial quantity which constituted misdeclaration under section 32(2) of the Customs Act. The Appellate Tribunal in its order has not repudiated the charges made in the show cause notice but remanded the case to the Collector.

7. The Assistant Collector submitted that in order to discourage import of goods in commercial quantity under the guise of unaccompanied baggage, C.B.R. has prohibited release of commercial goods under the Baggage Rules. He stated that by mis declaring the goods, the complainant made an attempt to smuggle contraband goods in the garb of unaccompanied baggage and thus committed an offence of smuggling as defined in section 2(s) of the Customs Act. He stated that the goods were auctioned/disposed of strictly under the provisions of Customs Act and the allegation made by the complainant was false and fabricated.

8. The facts narrated by the complainant and the position taken by the Department have been comprehensively examined by the Appellate Tribunal whose judgment is absolutely clear and leaves no place for doubt. The complaint filed before this forum relates to the failure of the Department to implement the Tribunal's order. The Tribunal held that there was nothing on record to demonstrate that an attempt to remove the goods as old and used items without payment of duty and taxes was made, set aside the order of the Collector and directed him to allow the provisions of Customs law to be followed. The Department's view that the case was remanded to the Collector for fresh proceedings is without basis or validity. The Collector should have allowed the complainant to file documents for clearance of goods imported by him, which was not done.

9. From the facts of the case it is manifest that all the actions E taken by the Customs Authorities right from the beginning were'; arbitrary, contrary to customs law, against established procedure ands without valid reasons. It may be added that framing the charge of misdeclaration and smuggling against the complainant on the basis of the Import General Manifest and the bill of lading was without legal authority. The seizure of goods, shifting from Gwadar to Quetta, and the auction without notice to the importer were also illegal and without jurisdiction. Fresh proceedings and issue of notices of hearing are actions in defiance of the Tribunal's appellate order. The Customs Authorities have defied the provisions of the Customs Act and the charge of serious maladministration is established against them.

10. The Department has pleaded that as the case is sub judice before the Collector of Customs the Federal Tax Ombudsman has no jurisdiction. From the above discussion it is clear that the Tribunal had given direction which was to be followed by the Department but instead of following it they had adopted a completely arbitrary procedure which is contrary to law. The Federal Tax Ombudsman has jurisdiction in cases where maladministration is alleged in respect of process, proceeding or order that may be taken or passed by any tax employee. In the present case the process adopted and action taken by the Collector are contrary to law and therefore the Federal Tax Ombudsman has jurisdiction to investigate into the allegation of maladministration.

11. The other objection is that the case does not fall under clause (v) of subsection (3) of section 2 of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 as stated by the complainant. Mere quoting wrong provision of law is no ground for rejecting the complaint. The facts relating to maladministration as pleaded attract the provisions of the Ordinance.

12. It is recommended that C.B.R.:‑‑

(i)institute an inquiry to identify the officials responsible for the illegal acts committed in the seizure, confiscation and disposal of goods, and take suitable disciplinary action against them;

(ii)direct the Collector of Customs to pay the sale proceeds to the owner of goods in accordance with the provisions of Customs Act within 30 days; and

(iii)compliance be reported within 45 days.

C.M.A./825/FTOOrder accordingly.