The President has upheld the decision of the Federal Tax Ombudsman (FTO) against the Federal Board of Revenue (FBR), in which customs authorities illegally confiscated consignment of alcoholic beverages by foreign oil and gas exploration company operating in Pakistan.
In this regard, President Secretariat has issued the ruling of the Law and Justice Division which formed basis for the President to rejected the representation of the FBR against the order of the FTO. President order is a classic example that how customs department deliberately create problems for the foreign companies operating in Pakistan.
According to the President's order, the upshot of the discussion is that the impugned Decision of the FTO is unexceptionable and the Agency (FBR) has failed to make out plausible ground(s) for interference with the impugned Decision. Accordingly, the President has rejected the above referred representation. President has directed the FBR that the compliance now to be reported to FTO's Secretariat within two weeks of the receipt of copy of the order.
President order said that feeling aggrieved of and dissatisfied with the Decision dated 27.10.20 14 of the FTO, the Secretary Revenue Division/Agency and Collector of Customs have preferred the Representation before the President.
Relevant portion of the Findings and Recommendations of the impugned Decision of the FTO said: FTO findings stated that issuing show cause notice and order-in-original in a case on which complaint had already been registered by the FTO Office, and disregarding a long standing practice of allowing release of commissaries including liquor imported by privileged persons in terms of FBR letter No.10(14)/93-ICM.Con dated13.06.1994, constitutes maladministration in terms of Section 2(3) of the FTO Ordinance, 2000.
As per FTO recommendations, the FBR to call for and examine the record of Customs House, Karachi pertaining to the proceedings in this case for ascertaining the legality and propriety of detention and confiscation of goods belonging to privileged persons and decide the issue as per law. The FBR to sensitise the Customs authorities across the country to differentiate the cases of practice from malpractice keeping in view the serious consequences of port demurrage and container charges involved in detention of goods in prima-facie weak cases; and report compliance.
President order said that the relevant facts for Decision of the present case are that the Complainant before the FTO is a corporate entity engaged, infer alia, in oil and gas exploration and as a foreign company carrying on commercial activity in Pakistan as well. The Complainant had imported consignment of alcoholic beverages for its expatriate employees based in Pakistan. Complainant grievance is that Customs Department disallowed the clearance of consignment of alcoholic beverages and subsequently confiscated the entire consignment. The Complainant initially agitated their grievance before the Customs Department and after failing to get any remedy, filed a complaint along with various documents to corroborate its stance that import of alcohol/liquor for consumption of expatriate employees of a foreign company is permissible under the Pakistani law and in particular the Circular No.10(14)/93-ICM.Con dated 13.06.1994 by the then Central Board of Revenue (now FBR) admittedly still holding the field. On the other hand, the FBR contested the complaint, primarily by taking legal plea that under the prevalent Import Policy Order, 2013, the consignment of alcohol/liquor is prohibited. In this regard, the Agency has invoked Sr. No. 14 of Appendix-A read with Section 5 of Import Policy Order to substantiate the action of the Agency.
The FTO has taken into account the factual aspect of the case as well as the prevalent legal position while passing the impugned Decision. The issues were framed as mentioned in Para-7 of the Decision, which shows that submissions from both sides were considered, while handing down the Findings and Recommendations.
President order said that the admitted factual and legal position which emerges after going through the case record is that the import of liquor for non-commercial use and consumption is not prohibited and reliance of the FBR on the above provision of Import Policy Order is misconceived. Secondly, even the FBR has issued a booklet Regime, which is a part of the case record for duty free import of commissary stores including Complainant's persons based in Pakistan. Most significant is the latest clarification document issued by the Agency itself having reference No.C.No.3(24)S.Val/2013 dated 21.08.2014 available at page 209 of the case file, wherein the Secretary Customs has clarified that the liquor is included in the list of commissary stores. The subject Representation is an elaboration of its stance before the FTO, with additional grounds relating to ouster of FTO jurisdiction, as the Agency initiated an independent proceeding against the Complainant though admittedly during pendency of the proceeding before the FTO. However, the FBR (Agency) has not addressed a very basic and specific question of the entire dispute, which has been dilated upon by the FTO in Para-11 of his Decision; that the Customs authorities have been invariably allowing duty free import of liquor/alcoholic beverages for the consumption of expatriate employees of other commercial entities. This is where the principle of departmental practice is applicable as there is no expressed statutory prohibition for import of liquor/alcoholic beverages for the above category of cases. The Complainant in response to the subject Representation has filed an elaborated response supported by the case law as well as the aforementioned latest clarification dated 21.08.2014 issued by the Agency.
There is a legitimate expectation in favour of complainant that it should also be given the same treatment, order of the President added.
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