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

‑‑‑‑Ss. 2(3) & 9‑‑‑Jurisdiction of Ombudsman‑‑‑Scope‑‑‑Ombudsman in order to redress grievances of complainants could take cognizance of and investigate cases involving "maladministration".

(b) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S. 33‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss. 9 & 11‑‑‑Refund of duty; claim for‑‑ Loss of original case file‑‑‑Delay in decision of case ‑‑‑Effect‑‑‑ ‑Department had reconstructed file of case‑‑‑Record showed that complainant had neither produced evidence nor attended hearings before department in spite of getting time to produce evidence‑‑‑Undue delay in settlement of such claim was due to loss of case file‑‑‑Best course for complainant was to attend adjudication proceedings and enter his defence alongwith documentary evidence to enable department to decide case in accordance with law on merits at an early date‑‑‑Ombudsman recommended to C .B.R. to direct department to decide case on merits in accordance with law within specified time after providing complainant opportunity of furnishing evidence and being heard; and to investigate and eliminate causes/factors leading to loss/misplacement of active files to streamline the procedure for their proper maintenance, so as to avoid loss of and damage to case files and inconvenience to dealing public.

(c) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S. 33‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S. 2(3)(ii)‑‑‑Old refund claim‑‑‑Inordinate delay in settling such claim would tantamount to "maladministration.

Anwar Elahi for the Complainant.

Zahra Haider, A.C. for Respondents.

Muhammad Akbar, (Advisor) Dealing Officer.

DECISION/FINDINGS

This complaint alleges '`maladministration' on the part of Lahore Dryport Customs Authority for non‑payment of refund of duty amounting to Rs.84,096 paid by the complainant in excess of what was payable due to over‑assessment made at a price higher than the prevailing one. Since the complainant's goods were assessed at a unit price of US $ 720 per metric ton instead of US $ 650 per metric ton‑ it applied for refund providing evidence of lower value at which the item in question had been assessed Q US $ 650 per metric tort. The Complainant was served a show cause notice way back in 1991, which was duly replied. The matter is still pending adjudication and is being adjourned from time to time. The case may be decided on merit.

2. In reply, the respondents have stated that since the case involves `assessment' matter the jurisdiction of the Honourable FTO is excluded in terms of section 9(2) of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000'. The goods were assessed at US $ 720 per metric ton on the declared value whereas the complainant wants the goods to be assessed at a price lower than the declared one. Assessment cannot be made on value lower than the declared price. No doubt, the complainant has replied to the show cause notice but a representative of the complainant who attended the hearing on 14‑4‑2003 requested for more time to produce evidence/relevant law/documents to the effect that scan prices were being applied irrespective of declared values during the relevant period i.e. 1990. On the next date of hearing (2‑5‑2003) the complainant failed to produce any evidence and requested for more time. Three more dates of hearing were fixed, last being 24-11‑2003, but no one appeared. The complaint may be filed.

3. During the hearing the AR stated that the goods in question were being cleared and assessed during the relevant period at US $ 650 per metric ton for which he had furnished evidence from the Karachi Customs House i.e. same goods imported by S.H. Abdullah (6th June 1990) and, therefore, the complainant was entitled to refund. The original file in this case was lost and the complainant helped the respondent to reconstruct the same. Although the first show cause notice was issued in 1991 but a fresh show cause notice, dated 3‑4‑2003 had to be issued because of loss of original file.

4. The DR stated that despite issue of call notices the complainant did not attend the hearings. The delay in processing the case occurred primarily because the case file was lost/damaged and it had to be reconstructed with the help of the complainant. Hearings in the case were notified and the complainant was asked to produce tangible evidence in support of its contention but it requested for some more time to produce the same. The complainant should contest its case before the adjudicating authority which will decide it on its merit. The AR stated that he was willing to contest the case because he was in possession of evidence of lower value.

5. The arguments of the parties and the record of the case have been considered and examined. In order to redress the grievances of the complainants, the FTO can take cognizance of and investigate cases involving 'maladministration'. It is observed that the complainant had filed its application for refund way back in 1990 but reportedly the case file was lost. It had to be reconstructed with the cooperation of the complainant. As a result, a fresh show cause notice, dated 3‑4‑2003 was issued. According to the department the case was fixed for hearing on 14‑4‑2003 but the complainant sought more time to produce evidence of acceptance of value lower than the declared one during the relevant period but as alleged by the respondents it did not produce the evidence nor attended the subsequent hearings. The respondents were asked to g place on record copies of ‑call notices. They placed on record notice dated 24‑5‑2003 for 5‑6‑2003. A copy of order sheet placed on record shows that earlier the complainant had also noted 24‑4‑2003 as one of the dates of hearing. The order sheet also shows that earlier still, the complainant's representative appearing on 14‑4‑2003 sought more time to produce the relevant evidence. The AR, however, denied receipt of call notices except for 24‑4‑2003 submitting that he had already, submitted evidence of prevailing price during the relevant period, which could be verified from Customs House Karachi. It is observed that the case file was lost causing undue delay in settlement of the claim. Whatever be the case, an inordinate delay has occurred in settling an old refund claim which is tantamount to 'maladministration' well within the meaning of section 2(3)(ii) of the Federal Tax Ombudsman Ordinance, 2000. However, since the file has been reconstructed and a show cause notice too has already been issued asking the complainant to explain why its claim for lower than the declared value be not rejected, the best course of action would be for the complainant to attend the adjudication proceedings to enter it defence alongwith documentary evidence in support of its contention to enable the department to decide the case in accordance with law on its merit at an early date. The department also needs to investigate and remove the causes of loss of case files so as to streamline the method/procedure for maintaining pending/undecided case files and to avoid inconvenience to the effected parties. Accordingly it is recommended that the C.B.R. direct the competent Customs authority to:‑‑

(i) Decide the refund case on its merit in accordance with the provisions of law after providing the complainant the opportunity of furnishing evidence of lower value in support of its contention and giving it the opportunity of being heard.

(ii) Investigate and eliminate causes/factors leading to loss/ misplacement of active files to streamline the procedure for their proper maintenance so as to avoid (a) any loss of and damage to case files and (b) inconvenience to the dealing public.

(iii) Compliance be reported within 30 days.

S.A.K./204/FTO Order accordingly.