Import of substandard goods: clearing agents cannot be penalised: FTO

The Federal Tax Ombudsman has held that clearing agents cannot be penalised for import of substandard goods unless it is proved that they were co-partners with the importer.
Kaka Traders of Jodia Bazar, Karachi, had complained to the Tax Ombudsman that as licensed clearing agent, four consignments of betel nuts from Indonesia were found to be unfit for human consumption.
The importers were issued notices and the collector of Customs (Adjudication) besides confiscation of the betel nuts imposed personal fines of Rs 50,000 on each importer and also on the clearing agent (the complainant).
The complainant also brought to the notice of the FTO that in a similar case, (No 1174-K/2002) the latter had rejected any penalty on the clearing agent along with the importer.
However, the respondent assistant collector of customs said that when the clearing agent was arranged for examination of the goods, he should have brought to the notice of the respondent that the betel nuts were in deteriorated condition.
In failing to discharge its duty, the clearing agent seemed to be in collusion with the importers.
They were bound to inform about the violation of law, but the clearing agent joined hands with the importer for clearance of deteriorated betel nuts.
The complainant's advocate replied that the clearing agent was not supposed to know the quality of the imported goods.
The customs too came to know of it after the examination by the HEJ laboratories.
After hearing both the sides, the FTO noted in his findings that the adjudicating officer has not specified the role of the clearing agent and not shown how the charge of mis-declaration has been established against him.
The department's charge that the clearing agent had previous knowledge of the infected betel nuts was presumptuous.
The order also said that the examination of goods and determination of their importability are some of the crucial responsibilities of the customs officials and unless it is established that the clearing agent deliberately concealed certain vital facts, it would not be justified to attribute motives, responsibility and consequent violation of provisions of Customs Act.
The FTO, therefore, said that the charge against the clearing agent has not been clearly stated nor it has been established on the basis of substantive facts.
The adjudication orders suffer from this basic defect that the clearing agent has been penalised with the importer as a co-partner without adequate statement of charges and grounds of penalty.
Therefore, the FTO asked the Central Board of Revenue (CBR) to set aside the adjudication orders applicable to the clearing agent.