The Federal Board of Revenue (FBR) has reinstated two officials of customs and excise group and imposed minor penalty on two other officials in the payphone scam. In this connection, the FBR issued four notifications on Saturday. The officials were facing inquiry on the allegations of issuing illegal refund of excise duty to the payphone companies.
Asim Majid Khan (BS-19) has been reinstated with immediate effect and posted as Additional Collector, Large Taxpayer Unit (LTU), Lahore. According to FBR, the official had no direct connection in issuance of excise duty refund to the payphone companies. He was in charge of the Audit Wing, and did not sanction any of the claims involved in the case.
Therefore, minor penalty of "censure" has been imposed on the accused official. Muhammad Saeed Wattoo (BS-18) has also been reinstated and posted as Second Secretary, FBR. The board has imposed major penalty of "reduction to a lower post of Assistant Collector for a period of two years".
The FBR said that the official ignored auditors'' report and provisions of law and gave interpretation that since excise duty had become part of the ''cost of sales'', therefore it could be considered having not been passed on to the consumers, although section 3B of Sales Tax Act and section 3D of the Excise Act provides for the claimant of refund, to prove that 3B and 3D do not apply and that the application under section 66 was also not barred by time.
He thought that there was no need to seek extension in time under section 74 of the Sales Tax Act, 1990 as application for refund were prima facie, barred by time. He did not consider that the PTCL had collected and paid excise duty and as a concerned registered person, could have claimed the refunds while the recipients of the refund did not show their registration that on their bills issued to the purchasers, and their documents were also not complete. He also issued wrong refunds on time-barred claims. He was refund officer as well and issued Rs 175 million as major chunk of refund. Based on the recommendations of inquiry committee, the said penalty has been imposed on the official.
The board has imposed minor penalty of "withholding of two years annual increments without cumulative effect" on Mrs Zeba Hai Azhar. She was in charge additional collector for refunds. Her initial interpretation was in line with auditor''s views. However, she subsequently changed her stance on the interpretation of another official.
The board has imposed minor penalty of "withholding of two years annual increments without cumulative effect" on Ms Sameera Sheikh. According to FBR, she, being deputy collector, recommended, facilitated and approved the illegal refund. She did not consider the payment before the date of clarification ie December 2004 as past and closed transaction.
She did not also consider that section 3B of the Sales Tax Act 1990 and section 3D of the Federal Excise Act 2005 clearly barred the allow-ability of refund because the burden was passed on to the consumers. She sanctioned refund to the tune of Rs 55.873 million in three cases. In her defence, she claimed that three officers, Nazim Saleem, Collector, Asim, Additional Collector, and Watto, Deputy Collector, had given opinion in the refund cases.
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