M.YAHYA M. YOUSAF BARI VS SECRETARY, REVENUE DIVISION, GOVERNMENT OF PAKISTAN ISLAMABAD, 2012 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 457 (2011)

Federal Excise Act (VII of 2005)---

----S.3-A---Complaint had been filed against the department for its failure to devise any procedure to claim the refund of Special Excise Duty (S.E.D.) paid under S.3-A of the Federal Excise Act, 2005, thereby causing excessive delay in settlement of refund claim for the period from July, 2007 to December, 2009---Complainant stated that no procedure was devised by the Federal Board of Revenue enabling him to submit claim of refund---Inordinate delay in devising the system to receive the Special Excise Duty refund claim was established which tantamount to maladministration in terms of S.2(3)(ii) of Establishment of Office of Federal Ombudsman Ordinance, 2000---Ombudsman recommended that Federal Board of Revenue would direct the Chief Commissioner to condone the delay in the filing of time-barred Special Excise Duty claims of the complainant; to issue refund as per law, along with compensation due within 21 day and to report compliance within next 7 days.

Manzoor Hussain Kureshi, Advisor Dealing Officer.

Jameel Ahmed Karimi, Manager Authorized Representative.

Junaid Ahmed Memon, DCIR Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---The complainant has filed complaint against the Departmentforfailuretodeviseanyproceduretoclaimtherefundof Special Excise Duty (SED) paid under section 3A of the Federal Excise Act, 2005 (the Act), thereby causing excessive delay in settlement of refund claims for the period from July, 2007 to December, 2009.

2.The complainant being an exporter of textile articles paid 1% SED on raw material meant for manufacturing of finished goods for export out of Pakistan. As the raw materials were consumed in the production of goods exported out of Pakistan, the complainant was entitled to claim refund of SED amounting to Rs.2,712,464 pertaining to the period from July, 2007 to December, 2009. There was, however, according to the complainant, no procedure devised by the F.B.R., enabling him to submit claim of refund.

3.The department submitted para wise comments on 7-12-2011 stating that no counter for receiving SED related refund claims was established in the RTO till April, 2011. The complainant, therefore, could not submit his claims for the tax period from July, 2007 to December, 2009 within the prescribed period and accordingly had to seek condonation of delay from the F.B.R. It was contended that the F.B.R. had asked the Department to report the complainant's application, which was still pending.

4.Duringthehearing,theDRstatedthatthereportcalledforbytheF.B.R.onthecomplainant'sapplicationhadbeensenttothe F.B.R. through the Chief Commissioner, RTO,Karachi,videletterdated26-12-2011.Hecontendedthatclaim of SEDrefundwould be processed, as per law, as soon as condonation of delay was received from the F.B.R. and claims submitted to the 'claim receiving counter'.

Findings:

5.The inordinate delay in devising the system to receive the SED refund claim is established which is tantamount to maladministration in terms of section 2(3)(ii) of the Federal Tax Ombudsman Ordinance, 2000.

Recommendations:

6.F.B.R. to direct the Chief Commissioner to--

(i)condone the delay in the filing of time-barred SED claims of the complainant, and issue refund, as per law, along with compensation due, within 21 days; and

(ii)report compliance within next 7 days.

H.B.T./2/FTOOrder accordingly.