The Directorate-General of Intelligence and Investigation has expressed serious concern over release of 11 customs officials involved in a mega tax scam, clearing 14 export consignments without payment of duties and taxes amounting to over Rs 1 billion.
The Federal Board of Revenue (FBR) had also taken up the case with the National Accountability Bureau (NAB), but practically no penal action was taken against these 11 involved officials. A senior official of the DG Intelligence told Business Recorder on Sunday that the Sheikh Noor ud Din and Sons (Pvt.) Limited case was detected by the Directorate in 2004. The agency intercepted 14 export consignments, which were cleared by customs officials at the Mughalpura, Dry Port, Lahore.
A fact finding departmental inquiry committee had found that 11 customs officials were involved in clearance of these consignments. Both the inquiry committee and the investigation team of the Directorate at Karachi had verified that fraud was committed with the connivance of these 11 customs officials. The investigation confirmed that consignments were grossly misdeclared through submission of wrong description, value, quantity and weight.
The racket had also managed to get huge amount of illegal duty drawback and sales tax refunds. The gang of customs officials and tax evaders committed this fraud in an organised manner and flouted rules to cause huge loss to the national exchequer.
It was also confirmed that one of the involved officials, collector of customs, had developed relationship with the firm's officials, pointing towards financial kickbacks in the case.
Keeping in view of the massive evasion of over Rs 1 billion, the agency had referred the case to NAB. The Bureau investigated the case and the company returned an amount of Rs 431 million under voluntary return clause of the NAB Ordinance.
Sources said that the officials were suspended and later presented before the Special Judge Customs and Taxation, Karachi in 2004. All the guilty customs officials were arrested, suspended and nominated in the FIRs, and interim challans were framed, but later all of them were reinstated without proceeding under Removal from Services Ordinance.
They said that it was unfortunate that all the involved officials were again working in the department even after detection of such a mega tax fraud. The officials are freely interacting with other officials/businessmen, showing serious flaws in the exiting procedures. It is necessary that the Federal Board of Revenue (FBR) should forthwith take action against those involved under the Removal from Services Ordinance, sources said.
Even after a prolonged delay of four years, nobody seemed to be interested in taking disciplinary action against the culprits behind this mega tax fraud case.
Sources said that the Lahore-based company was involved in commercial fraud in export of tents, tarpaulin and P E fabrics through misdeclaration of value, description, quantity, quality, etc, aimed at claiming undue duty drawback and sales tax refund.
On specific tip-off about the fraud perpetrated by the said exporting firm with connivance of the officers and officials of the FBR, 14 consignments consisting of 61 containers, cleared from Lahore Dry Port, were seized at Karachi Port and Port Qasim by the Karachi Office of the DG Intelligence during June 2004. The said consignments were intended to be exported to Red Cross, UK, and UNHCR, Geneva and Switzerland.
The DG Intelligence, Karachi had also lodged FIRs against the exporting firm and the concerned officials of the Lahore Dry Port and others. As a result of which one officer and some officials were arrested but the directors of the said concern evaded arrest and absconded abroad.
For the period from July 1999 to June 2002, and post-refund audits for the period July-2002 and August-2002 were conducted by the audit team of concerned collectorate.
Sources said that now the question arises how these consignments, with so much of misdeclaration, could get away as far as Karachi, and some even to Dubai, without active connivance of the customs staff responsible for clearing those consignments.
The officials pointed out that had there been proper examination it would not normally be possible for a company to wrongly export goods in such huge quantities. It is, therefore, established that some oversight, whether wilful or otherwise, had been there which had enabled the fraudulent firm to commit this fraud.
According to DG Intelligence, a proper examination was the only means to detect misdeclaration as to quantity, quality and other vital aspects to determine conformance of the goods to the declaration contained in the Shipping documents. Since the staff of Customs Export Section has admitted omission of examination, the other aspects like weighment do not remain important except for those in which the rebate claim would be based on weight.
Similarly, all kinds of data was confirmed keeping in view rules and regulations of 2004. The DG Intelligence also conducted detailed investigation in case of each and every official, confirming involvement of 11 officials in the scam. Sources added that the DG Intelligence would approach FBR for prompt action against the 11 officials involved in this mega tax fraud case.
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