The inquiry committee of the Federal Board of Revenue (FBR) has issued 'statement of allegations' to six senior officials of customs and excise group accused of involvement in issuance of illegal excise duty refund to the pay phone companies.
Sources told Business Recorder on Saturday that the inquiry committee comprising Mehmood Alam, member (technical), Customs, Federal Excise and Sales Tax Appellate Tribunal, Lahore, and Muhammad Ashraf Khan, Collector of Customs, Rawalpindi, have started investigation against the six officials under the Removal from Service (Special Powers) Ordinance, 2000.
The committee has levelled serious allegations against the suspected officials and directed them to submit reply within seven days otherwise ex parte action will be taken against them.
Previously, the 'order of inquiry' was issued to the suspected officials and now committee has served detailed charge sheets on them. Following directive of FBR Chairman M. Abdullah Yusuf, the committee would submit final report to the board based on the original record of refund cases after hearing viewpoint of these officials.
Charges/statement of allegations have been issued to Dr Naeem Aijaz Quershi; Additional Collector (under suspension), Collectorate of Sales Tax and Federal Excise; Zeba Hai Azhar, Additional Collector, Large Taxpayer Unit (LTU), Lahore; Muhammad Saeed Wattoo, Deputy Collector (under suspension) Sales Tax and Federal Excise; Ms Sameera Sheikh, Deputy Collector, Collectorate of Customs, Lahore; Asim Majid Khan, Additional Collector (under suspension), LTU, Lahore, and Nadir Khan Hoti, Collector (under suspension), Collectorate of Sales Tax and Federal Excise, Peshawar.
Through the statement of allegations, the inquiry committee has warned that the officials proved guilty of "inefficiency" and "misconduct" are liable to disciplinary action which may involve imposition of one or more of the penalties, including major penalty of dismissal from service.
The charge-sheets says: "Officials should submit reply to the committee within seven days of the receipt of this charge-sheet/statement of allegations and explain as to why disciplinary action may not be taken against them by the competent authority. Please take notice that in case of failure, it shall be presumed that officials have no defence to offer or have declined to offer the same and accept the charges and in that case disciplinary proceedings shall be conducted against them ex parte", it added.
In one case of Zeba Hai Azhar, inquiry committee said that the official of customs and excise group while posted as Additional Collector, Sales Tax and Federal Excise, Lahore have committed the following acts of omission and commission constituting "inefficiency" and "misconduct".
The official has recommended facilitated and approved the illegal sanction of refund of central excise duty, paid in sales tax mode, amounting to Rs 230,869,177 to three payphone companies namely the Global Telecom Ltd, Lahore; the World Call Communication Ltd, Lahore, and the Union Communication (Pvt) Ltd, Lahore, against six refund payment orders.
The official facilitated the claimants of illegal refunds to deprive the exchequer of Rs 230,869,177 for some personal motives. While working as additional collector, 5refund, the official accepted the valid objections raised by the auditor against payment of refund claim. But the official changed her stance to the detriment of the government revenue and agreed to the payment of illegal refunds.
The inquiry committee also said that the pay phone company was not entitled to refund as the amount in question was deposited by the Pakistan Telecommunication Company Ltd. Disregarded the fact that the claimants were not entitled to the refund for the reasons that they were exempt from payment of excise duty on the services provided by them for the period up to July 1 2005. The claimant were neither liable to be registered as service-provider nor they charged any excise duty on the services provided by them.
Moreover, they neither filed any sales tax return nor issued any sales tax invoice. Accordingly, they were not entitled to claim refund of any amount paid by PTCL during the period. In an event, if PTCL had not correctly paid the duty, it should have been for the PTCL to have applied for such refund.
It was ignored that incidence of excise duty collected in sales tax mode had been passed on and that official failed to ensure compliance of relevant provisions of the Central Excise Act, 1944, and Sales Tax Act, 1990, which provide that no refund can be paid if incidence has been passed on and the burden of proof is on the claimant to provide irrefutable evidence to dislodge the legal presumption.
The official accepted the illegal grounds forwarded by the Deputy Collector that incidence was not passed on because the sale price did not change during and after the period in which excess duty was charged. The official also failed to realise that the tax paid was being included in the cost and such costs are recovered from the final consumer unless a loss is being made.
The objections raised by the official at the initial stage of processing were valid which indicated that you were fully cognisant of the inadmissibility of the refunds.
Later, the official changed her stance without valid rebuttal of your objections from seniors/juniors. Such uncorroborated change in stance is also explained by your haste in getting the refunds. This has clearly establishes mala fides in getting the refund sanctioned which the official considered otherwise illegal, inquiry committee added.
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