Establishment of Office of Federal Tax Ombudsman (XXXV of 2000)------

----S. 2(3)---Customs Act (IV of 1969)---Maladministration---Alle gation against clearing agent and Customs Staff for taking bribe----First Appellate Authority directed that allegation of corruption against the Customs Staff and the clearing agent be investigated in depth by the Adjudicating Officer---Inquiry was, neither properly handled nor concluded---Validity---Allegations remained ` uninvestigated---Inquiry appeared to have been brushed under the carpet ---first Appellate Authority, taking notice of allegations of corruption against the clearing agent and the staff, directed that an inquiry be held to determine the truth but his order, like the inquiry itself, had suffered from inattention and red tape---Grievances of the complainant had remained unaddressed-- Such was a case of stark maladministration ---Federal Tax Ombudsman recommended that Revenue Division direct the concerned Authority to conduct an impartial inquiry into the complaint and complete the same promptly to determine the truth in the matter for taking appropriate action on the complaint filed by the complainant; identify the officers responsible for delay in conducting and completing the inquiry despite Collector Appeal's express direction to look into the allegations of corruption for appropriate action against them.

Complainant in person.

Ms. Tayyeba Kayani, A.C. Customs, Lahore for Respondents.

DECISION/FINDINGS

This complaint alleges maladministration on the part of Customs Authorities, Lahore in failing to take action against the clearing agent engaged by the complainant to clear his import consignment and the dealing Customs staff despite the fact that the Collector of Appeals Lahore had directed the respondents to enquire into allegations of corruption leveled against them by the complainant.

2. Brief facts of the complaint are that the complainant imported five combined harvesters in 1997 through Dry port Lahore and engaged Messrs Dawn Traders Lahore, as clearing agents to clear those. Having first intimated the complainant about the rates of duty and tax, the clearing. agent demanded from him Rs.1,00,000 for each machine for `easy sailing' through customs. Since the complainant refused to pay bribe so demanded, the clearing agent, in league with the customs staff, got enhanced the declared prices of Harvesters by 300%. He brought this fact to the notice of the Collector of Customs who ordered joint inspection of one machine by Messrs Cotecna and the Customs staff. Meanwhile the circumstances had compelled him to clear the remaining 4 machines at higher rates of assessment. The joint inspection team, however, accepted his declared value. One machine was, therefore, released at the declared value. The complainant, however, filed appeal before the Collector of Appeals in respect of over-assessment in respect of the other four machines. The Collector decided the case in his favour. While doing so, the Collector recommended disciplinary action against the Customs staff and the clearing agent and also ordered the respondents to arrange waiver of storage charges. The Department filed appeal against Collector Appeal's Order No.529 of 1998 dated 7-12-1998 before the Appellate Tribunal, which confirmed the appeal order. Overcharged tax for 4 machine was, therefore, refunded to him. However, the clearing agent who had collected an amount of Rs.195,0000 did not settle the account. He has illegally retained an amount of Rs.3,00,000. Although the complainant has filed a number of appeals/applications before the. Additional Collector, Dryport but neither' any action has been taken against the clearing agent and the Customs staff nor the Department has got refunded to him the amount of Rs 3,00,000 extorted by the licensed clearing agent. The Authorities been asking him to forgive and forget. He cannot do that because Rs 3,00,000. which has been shown by the clearing agent as an expenditure for bribing various members of the Customs staff is due to be paid back to him. The complainant seeks help through the good offices of the FTO.

2. In reply the respondents have stated that the complaint is hit by limitation period as stipulated in the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000 because the case relates to 1996-97 and the complaint has been filed on 7-4-2003 after a period of six months. The combined Harvesters were cleared through Dawn Traders, Customs clearing agents. The allegation of disloyalty against the clearing agent is a private matter 'between the two parties. The Department cannot be made accountable. The complainant acknowledges that the Customs staff did not directly demand bribe. The allegation that the clearing agent demanded it on behalf of the Customs is devoid of merit. The machinery was assessed on the basis of its condition keeping in view various factors. The Collector who ordered immediate joint inspection of one machine accommodated the complainant. The complainant could seek revision of assessment of other four machines. As regards the allegation that the complainant paid Rs.3,00,000 to the clearing agent, Customs Department is not concerned. The complainant did not provide any evidence. Duties and taxes charged in excess were refunded to the complainant in consequence of Appellate Tribunal's order. The complainant may adopt legal measures against the clearing agent for recovery of amount of Rs.300,000 allegedly paid to him.

3. During the hearing the complainant reiterated the arguments advanced in the written complaint. He stated that the complainant had engaged Dawn Traders as his clearing agents. They were represented by Ch., Muhammad Hussain and one colleague. The clearing agents, addition to duties and taxes, demanded Rs.1,00,000 for payment to the Customs officers as bribe. He emphasized that the amount charged from him in excess of payable duties and taxes may be recovered from the clearing agent and paid to him. He also placed on record the statement of expenses prepared by him allegedly showing the amount collected from him for payment as bribe to the Customs staff.

4. The respondents reiterated the arguments advanced in the written reply emphasizing that there is no direct evidence of bribe against the Customs staff. The delay and detention certificate was also issued to the complainant for remission of storage charges for one machine. Asked whether the Adjudicating Officer conducted an inquiry, as directed by the Collector of Appeals, the D.R. stated that the Additional Collector had asked the D.C. Incharge Licensing Dryport to investigate into the matter. Further asked whether or not the enquiry has since been completed the D.R. wanted time to find out. Next day she placed on record certain documents/papers that show that as consequence of Collector Appeal's direction to hold an inquiry into the allegations leveled against the clearing agent and the Customs staff the inquiry indeed initiated on 10-12-1999 but unfortunately not concluded.

5. The arguments of the parties and the record of the case been examined and considered. The complaint has been entertained as the cause of action still exists. The allegations levelled by complainant have not been properly investigated as directed by Collector of Appeals. It is observed that vide paragraph 6 of his Order No.529 of 1998 dated 7-12-1998 the Collector Appeals, while deciding the case in favour of the complainant, also observed that "the applicant has levelled serious allegation of corruption against the Customs staff and the clearing agent which cannot be looked into at this forum and need to be investigated in depth by the Adjudicating Officer". The documents produced by the D.R. also show that the complainant had, following Collector's decision, filed a complaint dated 8-10-1999 before the Additional Collector alleging corruption against staff and the clearing agent. The record reveals `that the inquiry started on 10-12-1999 by calling explanation of the clearing agent. Hearing notices were issued to both the clearing agent and the complainant The file also contains correspondence on the subject between the complainant and the Dryport Authorities, including submission of a copy of the `expense sheet' provided as evidence by the complainant. It is most disquietning to learn that the inquiry was neither properly handled nor concluded. In fact, an inordinate delay has occurred in conducting the inquiry. As a result, the allegations of corruption leveled by the complainant against the clearing agent and customs staff have remained uninvestigated. The inquiry appears to have been brushed under the carpet. The customs is a public dealing department. A senior officer (Collector of Appeals), taking notice of allegations of corruption against the clearing agent and the staff, directed that an inquiry be held to determine the truth but his order, like the inquiry itself, has suffered from inattention and red tape. As a result, the grievances of the complainant have remained un addressed. It is a case of stark maladministration. Accordingly, it .is recommended that the Revenue Division to:--

(i)Direct the concerned Authority to conduct an impartial inquiry into the complaint and complete it promptly to determine the truth in the matter for taking appropriate action on the complaint filed by the complainant.

(ii)Identify the officers responsible for delay in conducting and completing the inquiry despite Collector Appeal's express direction to look into the allegations of corruption for appropriate action against them.

(iii)Compliance report to be submitted within 30 days of the receipt of this order.

C.M.A./894/FTO Order accordingly.