Non-duty paid smuggled vehicles: FTO establishes case against Customs authorities

Federal Tax Ombudsman (FTO) Dr Muhammad Shoaib Suddle has established a case of maladministration against Customs authorities at Islamabad Dry port, as they deliberately delayed process of legalisation of non-duty paid smuggled vehicles under amnesty scheme.
In this regard, FTO has issued a detailed order here on Friday in favour of an owner of a non-duty paid vehicle, whose case was delayed by the customs authorities of Islamabad Dry port. The order clearly reflects that how the customs officers at the Islamabad Dry port created problems for the persons who voluntarily came to the Islamabad Dry port for legalisation of non-duty paid vehicles.
The order of the FTO categorically states, "The maladministration in terms of Section 2(3) of the FTO Ordinance 2000 is established". According to the recommendations of the FTO, the FBR should authorise the relevant bank(s) to accept payment against treasury Challans validly issued during the Amnesty scheme. The FTO has further directed Collector to release the vehicles that fulfilled the Amnesty criteria, but were held solely due to the bank's refusal to accept payment after the expiry of Amnesty at 12:00 am on April 7, subject particularly to the fulfilment of the following conditions:
Firstly, the vehicle was duly surrendered to the Customs on the date of application. Secondly, the vehicle remained under continued custody of the Customs ever since the date of its surrender. Thirdly, the particulars of the vehicles are duly mentioned in List No II prescribed by the FTO Secretariat vide Notice No 01/FTO/2013 dated 06.04.2013.
Fourthly, the Collector of Customs concerned personally certifies that non-payment of duty/taxes and fine etc was only because of the closure of the bank on the expiry of the Amnesty. Fifthly, FTO has further directed the Customs to issue delay and detention certificates in respect of all such vehicles to save the owners from any unjust levy of demurrage or storage charges by the port authorities and report compliance within 15 days.
Details of the case revealed that Muhammad Zafar-ul-Haq of Islamabad has filed a complaint alleging maladministration of Customs authorities at Islamabad Dry port. According to him, he was not given timely information about completion of formalities of legalisation of his vehicle under the Amnesty notified vide SRO 172(I)/2013 dated March 5. Resultantly, as the bank refused to receive deposit of applicable duty and taxes after 12:00 am on April 7, his vehicle, along with many other vehicles, were unduly denied the benefit of Amnesty. He filed an application on 07.04.2013 before Chairman FBR, seeking permission to deposit the applicable duty and taxes, but in vain. The complaint was referred to the Secretary, Revenue Division, for comments which were received on May 7.
During the hearing, the complainant explained that he surrendered a Toyota Land Cruiser-Amazon to the Customs at Islamabad Dry port on 29.03.2013 along with application, copy of NIC and a formal affidavit/ undertaking as required under the Amnesty Scheme. Customs officials at Islamabad Dry port assigned File No 819, accepting surrender of the vehicle and advising him to wait for their telephone call. He was told that due to rush it might take some time. He called the Deputy Collector on March 31. He was informed that his case would be processed on turn. He was also told that the last date of Amnesty was likely to be extended.
The last date was extended on April 2, but still nobody from the Customs called him. He again called the Deputy Collector on April 4 to know the fate of his case. He was informed that Hiace vans were under process, and he would be informed when the turn of Prado vehicles would come. On April 6, being the last day of Amnesty, he sent a representative to the Dry port to find out whether the Customs had completed the process involved in his case. At around 7:30 pm, representative Shakoor informed him that the Customs had completed the formalities and that he could collect the treasury Challan to pay the applicable duty/taxes and fine. He hurriedly arranged cash for payment of duty and taxes and rushed to the Dry port. After obtaining the Challan, he proceeded for making payment at the Dry port booth of the bank. At about 9.00 pm, he joined the queue of applicants lined up before the bank.
It was a long queue of more than a hundred applicants, waiting for their turn. At 12:00 am of April 7, the bank stopped receiving any payments account of expiry of the extended period of Amnesty scheme. The PRAL was also reported to have similarly stopped uploading of legalisation data on its computer software for automatic generation of delivery orders. Consequently, payments of many vehicles were not accepted by the bank for no fault on the part of their owners, as a result the vehicles were not allowed release by the Customs.
Responding to the submissions of the complainant, the departmental representative (DR) stated that after assigning File No 819, the process of examination and obtaining digitally scanned image of the vehicle was completed, and a seizure report made out as per procedure. The case was adjudicated on 01.04.2013 vide O-in-O No 807/2013 giving an option to the complainant to redeem the vehicle on payment of applicable duty/taxes and fine. When asked whether the complainant was associated during adjudication and assessment stages, the DR stated that the record was silent. He further stated that he was not in a position to provide evidence when the complainant was informed about the completion of formalities involved in the process.
Replying to a query, the DR stated that there were many cases in which the applicable duties/taxes could not be deposited as the bank closed its operation at 12:00 am on April 7. When asked why the Customs failed to address the issue despite lapse of over one month since April 6, the DR stated that the Collector had referred the issue to the FBR vide letter No V-Cus/Hqrs/06/2013/ 4768 dated 08.04.2013. However, no response was received as yet.
The complaint has been examined in the light of the written and oral submissions of the parties. It is patently unfair that the applicants lined up before the bank for several hours have been since made to undergo avoidable hardship and suffering. Besides, FBR's failure to respond to the complainant's application being a violation of its Standing Order dated March 3, 2011 also tantamount to maladministration, FTO added.