ADMJEE ENTERPRISES, KARACHI VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2011 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1344 (2010)

Customs Act (IV of 1969)---

----Ss. 35, 40 & 41---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9, 10, 11, 12 & 16---Withholding rebate claim/duty drawback claims---Grievance of the complainant was that its 84 rebate claims/duty drawback claims, relating to years 2007 and 2008 were withheld by the department without any cogent reason or justification---Nothing was on record to show that prior to filing of complaint, any objection memo or documents or call notice was issued to the claimant---After receiving of notice of the complainant, the department issued notices to the complainant for submission of documents---Delayed notice, itself reflected that it was a failed attempt to create an excuse for delay in processing of the claims---Subsequently without receiving of any document from the complainant, all pending claims, except 14 had been cleared which, in circumstances, were withheld without any just and cogent reason, which not only tantamounted to maladministration, but also to defiance of recommendations of Federal Tax Ombudsman which could attract action under Ss.12 & 16 of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000---Recommendations were made to Federal Board of Revenue to direct the Collector to settle the complainant's pending rebate claims as per law within 15 days; to fix responsibility of non-compliance of findings/recommendations of Federal Tax Ombudsman, and direct the concerned officials to show cause why action under Ss.12/16 of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000, should not be taken against them; and to report compliance within 30 days.

Justice (Retd.) Muhammad Nadir Khan, Advisor, Dealing Officer.

Naeem Uddin, Consultant, Authorized Representative.

Salamat Ali, Deputy Collector Customs, Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---The complainant has approached the Hon'ble FTO with grievance that their 84 rebate claims relating to years 2007 and 2008 are withheld by the Department without any cogent reason or justification. The complainant alleges that as per S.R.O.704(I)/2007 dated 14-7-2007, rebate claims (duty drawback claims) were required to be processed as part of processing of goods declaration; rebate amount was to be sanctioned immediately after sailing of the vessel and cross cheque was required under the procedure to be electronically issued against the account number given in the profile of the exporter. The Department however, violated the procedure prescribed by F.B.R. The complainant pleaded that they had approached the Chairman, F.B.R. vide letters dated 9-4-2010 and 12-6-2010 for redressal of their grievance but no response was received.

2. Notice of the complaint was issued to the Secretary Revenue Division Islamabad in response to which Deputy Collector Customs (Exports) submitted reply contending that payment of duty drawback were being made regularly to the complainant. During past three years 975 duty drawback claims amounting Rs.1-7.67 million had been paid to the complainant. The Department pleaded that in the pending claims the complainant had been repeatedly requested vide letters dated 2-7-2010, 13-7-2010 and 14-7-2010 to provide necessary documents to process the claims, but the requisite documents have not been supplied. The Department contended that the matter for issuance of duty drawback cheque would be taken as soon as the documents are received.

3. After receiving parawise comments, the matter was fixed for hearing on 23-8-2010 which was attended by Mr. Naeem Uddin Consultant for the complainant {AR). The Department was represented by Mr. Salamat Ali, Deputy Collector {DR}

4. The learned DR at the very outset came up with plea that except 4/5 claims which are stuck up in the computer system, all other rebate claims had been finalized. The AR disputed the statement of DR contending that complainant's 36 claims were still pending. The DR, denying the plea of AR, requested for two days time to submit final report. As per his request he was allowed opportunity to file final report on 25-8-2010. On the said date the DR reported that in 29 claims cheques had been issued on 23-8-2010. The AR contended that still 14 rebate claims were pending which fact was not denied by the DR who submitted that remaining claims would be finalized at the earliest.

5. The record of the case and submissions made by the parties show that complainant's 84 rebate claims (duty drawback claims) relating to years 2007 and 2008 were pending. There is nothing on record to show that prior to filing of the complaint any objection memo or documents call notice was, issued to the complainant. However after receiving of notice of this complaint the Department issued notices to the complainant for submission of documents. The delayed notice itself reflects that it was a failed attempt to create an excuse for .delay iii processing of the claims. However subsequently without receiving of any document from the complainant all the pending claims except 14 have been cleared. This reflects that no document was required for processing of the rebate claims; hence the same were withheld without arty just and cogent reason. The Hon'ble FTO had already dealt the issue of withholding of rebate claims and disapproved delay in processing of rebate claims. In said regard Recommendations/Findings in complaints No.233/KHI/Cus/(70)/708/2009 and 243/KHI/Cus(72)/725/2009 dated 17-3-2010 and 18-3-2010 respectively are relevant, wherein following was recommended:--

"RECOMMENDATIONS:

The F.B.R. to direct the Chief Collector to:-.

(i)settle the complainant's claims as per law within 30 days;

(ii)form a committee of relevant officials of Collectorates of Exports, PaCCS, PRAL, etc. to evolve workable strategy to address the systemic issue of unacceptable levels of delay in processing of claims;

(iii)settle all 150,000 pending refund claims, as per law, within three months; and submit a monthly progress report to the FTO Secretariat."

FINDINGS:

6. As pointed out hereinabove the duty drawback claims of the complainant relating to years 2007 and 2008 were withheld without any cogent reason or justification which not only tantamount to maladministration but also to defiance of Recommendations of the Hon'ble FTO which could attract action under sections 12 and 16 of FTO Ordinance.

RECOMMENDATION:

7. The FBR to-

(i)direct the Collector PaCCS, Karachi, to settle the complainant's pending rebate claims as per law within 15 days;

(ii)fix, responsibility of non-compliance of Findings/Recommenda tions of Hon'ble FTO in Complaints No.233/KHI/Cus(70)/ 708/2009 and No.243/KHI/Cus(72)/725/2009, and direct the concerned officials to show cause why action under section 12/16 of FTO Ordinance may not be taken against them; and

(iii)report compliance within 30 days.

H.B.T./122/FTOOrder accordingly.