FTO criticises delay in deciding duty drawback claims

ISLAMABAD (September 22 2003): The inordinate delay in deciding duty drawback has been criticised by the Federal Tax Ombudsman Justice Saleem Akhtar (Retd), who has also asked the CBR to fix responsibility of officers who caused the delay.

The complainant M/s Aziz Garments Industries, Karachi, exporters of fabrics, submitted that his claim for duty drawback amounting to over Rs 1 million is pending with the Karachi customs (Exports) since 1998.

It is alleged that despite reminders no cogent reason for non-issuance of duty drawback has been conveyed.

In the meantime, the complainant had provided details of locally purchased fabrics duly verified by the customs; provided copies of bills and vouchers against purchases also audit report of the firm as directed by the department.

During this period the complainant was not served with any show cause notice. The firm suspected some ulterior motive as hundred of cases of other firms of similar nature had been decided by the department.

The department, in its response, pointed out the claims remained pending for lack of inventory of fabrics locally purchased prior to in bonding.

The Sales Tax Collectorate was asked to conduct an audit of the firm for verification, but it was reported that the complainant did not maintain any inventory register.

It was, therefore, decided that their case did not merit any consideration, yet a reference was made to the CBR about deciding the issue. The CBR's reply was awaited.

The department also explained that the Collector of Exports had decided that all such cases where the firm did not maintain inventory register would be rejected.

In his order, the Ombudsman noted that this policy decision was not notified through public notice.

Thus the rebate claims stood rejected without issuing any show cause notice, any adjudication order or any intimation.

The department has sought clarification from CBR and it is stated that the pending claims would be decided in the light of CBR's decision.

The FTO concluded that the customs authorities kept the claim pending without any justification for the last five years.

Despite all the documents supplied to them, no action was taken. This portrays a very dismal failure on the part of the working of the Export Collectorate and deserves immediate correction.

It is therefore recommended that CBR should direct the Collector of Customs to decide the duty drawback claims filed in 1998, within 30 days.

Further, the responsibility for inordinate and unjustified delay is fixed and disciplinary action is taken against the delinquent officials within 60 days.

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