Customs Act (IV of 1969)‑‑‑

‑‑‑‑S. 41‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXV of 2000), Ss.2(3) & 9‑‑‑Declaration by parties claiming drawback‑‑‑Non‑payment of duty drawback claims for the last two to eight years and those sanctioned were deposited in the account of another firm‑‑‑Complaint against‑‑‑Claims not decided for two to eight years had not been replied‑‑‑Processing of the drawback claims was initiated when the complainant approached the forum of the Federal Tax Ombudsman and it was then that the forfeited amount was restored, the amount paid to another firm was recovered and paid to the claimant‑‑‑Such was blatant manifestation of arbitrary, unreasonable and oppressive actions arising out of sheer neglect, inattention, incompetence and inefficiency and evidence of administrative excesses, clearly within the meaning of maladministration as defined under S.2(3) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000‑‑‑Federal Tax Ombudsman recommended that Central Board of Revenue to depute the Director General Inquiries (Central Board of Revenue) to conduct' a detailed inquiry in the above maladministration with the aim of identifying the officials responsible for wrong forfeiture of refundable amounts and failure to decide the drawback claims, and the senior officers who failed to take action on the verbal and written entreaties and allowed the injustice to prevail, and initiate disciplinary proceedings for suitable action against the guilty; (ii) direct the Collector of Customs (Export) to ensure that the replies to the complaints referred by Ombudsman Secretariat should be comprehensive, responsive to all the issues raised, and furnish copies of all the legal provisions, notifications, notices and decisions, and the correspondence referred to therein, and state complete reasons/explanation to the allegations made; (iii) look into the working of the Export Collectorate and conduct a thorough house‑cleaning at .senior level to identify the backlog and devise an efficient procedure ,to deal with the problems of the exporters (instead of leaving this task to the Collector) and (iv) Collectorate Officers should better look into the reasons of the complainant instead ,of targeting them which would be very seriously viewed.

Kausar Ansari, Manager.

M. Amir Thahim, Assistant Collector of Customs.

FINDING/DECISION

The complaint has been filed against the Customs Exports Collectorate for non‑payment of duty drawback claims filed in 1994, 1995, 1999. The complainant has stated that:‑‑‑

(i)The cheque for a duty drawback claim SR‑2 No.139972 filed on 29‑11‑1994 was issued to another firm Messrs Carewell Traders as confirmed by the Assistant Collector of Customs vide his letter, dated 15‑5‑1998.

(ii)Two duty drawback claims SR‑2 9422, dated 3‑1‑1995 and 1702, dated 4‑1‑1995 were sanctioned but the cheques, dated 30‑3‑1995 were deposited in the account of Collector of Customs against recovery due from the same (other firm) Messrs Carewell Traders as confirmed by the Assistant Collector of Customs vide his letter, dated 1‑7‑1998.

(iii)Three duty drawback claims SR‑2 Nos.59055, dated 14‑6‑1995, 59057, dated 14‑6‑1995 and 60915, dated 19‑6‑1995 were also sanctioned but their cheques were again deposited in the Collector of Customs' account as intimated by the Assistant Collector of Customs vide letter dated 1‑7‑1998 without giving any reason.

(iv)Eight duty drawback claims filed in 1999 and 2000 were pending in the Collectorate.

2. The complainant stated that he visited the Customs authorities several time, and approached the Collector of Customs, Deputy Collector of Customs, Assistant Collector of Customs and other officers regarding the pending duty drawback claims. He recounted nine letters, dated 30‑3‑1998, 28‑4‑1998, 23‑6‑1998; 6‑7‑1999, 19‑1‑2002, 28‑1‑2002, 8‑2‑2002, 19‑2‑2002 and 20‑2‑2002 sent to the Customs during four years 1998‑2002 but neither did he receive the payment nor reply to any letter. He requested that the department be ordered for early payment of the duty drawback claims.

3. The Collector of Customs (Exports) replied to the complaint that the five duty drawback claims of 1995 were deposited in the Collector's account against recovery in two claims of the same party as ordered in the 6rder‑in‑original No. 744, dated 8‑3‑1995. Appeal against the order was accepted and the case was remanded for de novo consideration. The re‑adjudication proceedings were delayed because the exporter filed complaint to the Wafaqi Mohtasib. The case was re‑adjudicated vide order, dated 26‑3‑2002 and the claims have been sanctioned. The cheque for the duty drawback claim of 1994 was issued to some other exporter due to some technical fault of the computer. It was recovered from him and now the payment has been made to the complainant vide cheque, dated 27‑3‑2002.

4. With regard to the eight duty drawback claims, the Collector stated that one claim was time‑barred for which show‑cause notice has been issued and the exporter has requested for adjournment of the proceedings; The case would be decided on merits on the date fixed for hearing. In respect of another claim, the exporter had received (taken away) the bill of export for endorsement of test report on 23‑9‑1999 and since then the bill had not been submitted back despite several memos. Finally a 'show‑cause notice was issued arid the party requested for Adjournment. The next hearing was fixed for 6‑4‑2002. Payment in the remaining six admissible cases has been made by three cheques issued in March, 2002.

5. During the hearing of the complaint, the, complainant's representative stated that the Customs Authorities did not inform him when they deposited two cheques deposited against recovery from Messrs Care well Traders. He pursued the claims by personal visits to officers at every level and through letters but without success and response. The only; intimation he received in 1998, more than three years after filing the claims, was to the effect that one cheque had been issued to another exporter, two cheques forfeited by the Collector for dues outstanding against the other exporter, and two cheques also deposited in the Collector's account for outstanding against dues. The Department's representative stated that now all the drawback claims had been disposed of and payments made to the exporter. The complainant admitted that now, in the March/April 2002, he has finally received all the unpaid duty drawback dues. The Assistant Collector was even keen to give the number and date of the latest cheque to prove that no claim was outstanding.

6. It is necessary to place on record the statement of the Assistant Collector of Customs representing the Export Collectorate that the authorities were considering inquiring against the same owners of three exporting firms who had filed complaints with the Federal Tax Ombudsman whereas there were thousands of exporters ,who had not done so.

7. The reply of the Collector, is brief, cursory and incomplete and gives a definite impression that attempt has been made to quickly and casually dispose of an unpalatable inquiry about the performance of a self‑important officialdom. It is noteworthy that copy of not a single document referred in the reply has been furnished with the reply. The following points and questions were not addressed:‑‑‑

(i)'No explanation or reason was given about the forfeiture of the refund amounts.

(ii)Why re‑adjudication was delayed? Filing of complaint should have prompted speedy disposal and not delayed it till 26‑3‑2002. When was the complaint filed before the Honourable Wafaqi Mohtasib and what was his finding?

(iii)Why the cheque was issued to another exporter?

(iv)Why the amount due to the complainant was forfeited as dues recoverable from another exporter?

(v)Why the blame was attributed to the computer technical fault (specially when the authorities simplistically find miraculous solution of all the problems in computerization); why self correcting mechanism was not introduced or not allowed to work in the software programme?

(vi)Was the payment to another party induced by official favour or collusion?

(vii)Why it took the department more than three years to inform the claimant that the. refund amounts had been forfeited?

(viii)When was the show‑cause notice that one duty drawback claim barred by time issued to the exporter?

(ix)What action was taken about the case where bill of export was not returned by the exporter?

8. The most crucial question as to why the claims were not decided for (two to) eight years has not been replied. It is evident that the processing of drawback claims, perhaps even re‑adjudication, was initiated when the complainant approached the forum of the Federal Tax Ombudsman. It was then that the forfeited amount was restored, the amount paid to Messrs Carewell was recovered and paid to the claimant, and cheques for claims as old as of 1994 and 1995 alongwith those filed in 1999 and 2000 were paid. This is blatant manifestation of arbitrary, unreasonable, and oppressive actions arising out of sheer neglect, inattention, incompetence and inefficiency and evidence of administrative excesses, clearly within the meaning of maladministration as defined under subsection (3) of section 2 of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000.

9.It is recommended that C.B.R.

(i)depute the Director‑General Inquiries (C.B.R.) to conduct a detailed inquiry in the above maladministration with the aim of identifying the officials responsible for wrong forfeiture of refundable amounts and failure to decide the drawback claims, and the senior officers who failed to take action on the verbal and written entreaties and allowed the injustice to prevail, and initiate disciplinary proceedings for suitable action against the guilty;

(ii)direct the Collector of Customs (Exports) to ensure that the replies to the complaints referred by this Secretariat should be comprehensive, responsive to all the issues raised, and furnish copies of all the legal provisions, notifications, notices and decisions, and the, correspondence referred to therein, and state complete reasons/explanations to the allegations made; and

(iii)look into the working of the Export Collectorate and conduct a thorough house‑cleaning at a senior level to identify the backlog and devise an efficient procedure to deal with the ,e problems of the exporters (instead of leaving this task to the Collector);

(iv)with regard to the statement at paragraph 6, the Collectorate officers should better look into the reasons of the complaints instead of targetting the complainant which would be‑ very seriously viewed; ,

(v)report compliance within thirty days.

C.M.A./M.A.K./478/FTOOrder accordingly.