ABDUL WAHEED VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1875 (2003)

Customs Act (IV of 1969)---

----S.19(2)(3)---S.R.O. 358(I)/2002, dated 15-6-2002---S.R.O. dated 22-10-2002---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---General power to exempt from customs duties---Vehicle/car was imported under Disabled Persons Scheme---Documents for clearance of vehicle were filed well in time---Bill of entry was filed on the date, i.e. 22-10-2002, on which the concession to disabled persons was withdrawn through another S.R.O. dated 22-10-2002 and complainant was asked to pay the duty and taxes at full rates---Validity---There was no dispute regarding the facts of the case as admittedly the concession was withdrawn on the same date as the bill of entry was filed and thus legally the concession was no longer available with effect from the said date, particularly in view of subsections (2) & (3) of S.19 of the Customs Act, 1969; on the other hand, authorization of the Ministry of Commerce was obtained as far back as on 11-6-2002 and the L.C. was opened by the Complainant on 27-8-2002 viz. almost two months prior to the submission of the bill of entry---Such was a clear case of hardship to a disabled person who had spent a substantial amount as cost of the vehicle and who probably would not have made the investment if he knew that full duty would be charged--Such an arbitrary exercise of authority by the Revenue Division, particularly in respect of a disabled person, did not appear to be justified---If the Revenue Division had decided to withdraw the duty concession on imported vehicles for disabled persons, the concession should at least have been retained for such persons who had already opened their LCs before the date of withdrawal of the concessionary duty---Federal Tax Ombudsman recommended that the matter be considered by the Revenue Division for exercise of powers under S.19 of the Customs Act, 1969 in the cases of disabled persons, such as the complainant, who had already opened their LCs before 22-10-2002.

Mirza Muhammad Wasim, Adviser (Dealing Officer).

Abdul Waheed for the Complainant with Riaz Malik, Consultant, A.R.

Asif Abbas, Deputy Collector Customs (Appraisement), Karachi present for Respondent.

FINDINGS/DECISION

JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN).---This is a complaint relating to the levy of customs duty on a car imported by the complainant under the disabled persons scheme the main points in the complaint are as follows---

(i) After completing all necessary formalities and in the light of the letter of Ministry of Commerce dated 27-11-2002 issued to the complainant he imported a Toyota Corolla, Model 2002 car under the disabled persons scheme contained in S.R.O. 358(I)2002 dated 15-6-2002.

(ii) All the documents for clearance of the vehicle were filed well in time and the bill of entry was filed on 22-10-2002. On the said date, however, the concession to disabled persons was withdrawn through another S.R.O. dated 22-10-2002.

(iii) Prior to the issuance of the notification dated 22-10-2002 the complainant's vehicle was assessed to duty and taxes on concessionary rates but on the same date the complainant was later asked to pay the duty and taxes at full rates.

(iv) Being aggrieved by the decision of the Collector of Customs, Karachi the complainant filed an appeal before the Secretary, Customs Tariff-II, C.B.R, Islamabad, which has however, not yet been decided.

(v) The complainant has spent a huge amount on the import of the car and the delay in final decision is causing hardship and mental agony to him.

It has been prayed that the matter be ordered to be decided as early as possible.

2. The reply of the respondent consists of the comments furnished by the Deputy Collector Customs (Appraisement), Group-VII, Karachi. The points contained in the reply are as follows-

(i) Vide Sr. No.10 of Table-II of S.R.O. 358(I)/2002 dated 15-6-2002 cars of upto 1300 cc meant for disabled persons were exempt from customs duty in excess of 10% on fulfilment of formalities.

(ii) The exemption was subsequently withdrawn vide notification dated 22-10-2002 and the exemption was made available to CKD kits and special gadgets to be fitted in motor vehicles.

(iii) The complainant imported the Toyota Corolla ear from Japan vide Ministry of Commerce authorization dated 11-6-2002 and LC dated 27-8-2002. The bill of entry with Machine No.48566 dated 22-10-2002 for clearance of the vehicle at concessionary duty was filed but on the same date viz. 22-10-2002 the concession stood withdrawn and full duty became payable by the complainant.

(iv) Initially the Ministry of Commerce vide an OM dated 27-10-2002 requested the C.B.R. to release the vehicle on payment of concessionary duty but in view of the fact that the exemption was not admissible the OM was withdrawn by the Ministry through a subsequent OM dated 30-11-2002.

(v) The complainant's request being not maintainable under the law has accordingly been turned down by the Revenue Division.

(vi) The fact that the import authorization issued by the Ministry of Commerce was valid upto 30-6-2003 does not entitle the complainant to any exemption w.e.f. 22-10-2002.

(vii) The government decision to withdraw exemption on imported vehicles and the grant of the concession to locally manufactured vehicles was meant to contain the misuse of the exemption.

It has been prayed in the reply that since the complaint was devoid of any legal force it may be dismissed.

3. The two sides have been duly heard and their respective contentions have been considered. There is no dispute regarding the facts of the case as admittedly the concession was withdraw on the same date as the bill of entry was filed and thus legally the concession was no longer available with effect from the said date, particularly in view of subsections (2) and (3) of section 19 of the Customs Act, 1969. On the other hand, as has been stated in the respondent's reply the authorization of the Ministry of Commerce was obtained by the complainant as far back as on 11-6-2002 and the LC was opened by the complainant on 27-8-2002 viz. almost two months prior to the submission of the bill of entry. It is thus a clear case of hardship to a disabled person who has spent a substantial amount as cost of the vehicle and who would probably not have made the investment if he knew that full duty would be charged. Such an arbitrary exercise of authority by the Revenue Division, particularly in respect of a disabled person, does not appear to be justified. If the Revenue Division had decided to withdraw the duty concession on imported vehicles for disabled persons the 'concession should at least have been retained for such persons who had already opened their LCs before the date of withdrawal of the concessionary duty.

4. In the light of the above it is recommended that-

(i) The matter be considered by the Revenue Division for exercise of powers under section 19 the Customs Act, 1969 in the cases of disabled persons, such as the complainant, who had already opened their LCs before 22-10-2002.

(ii) Report on the final action taken be furnished within 60 days.

C.M.A./33/FTOOrder accordingly.