2004 PLP 1455 (PTD)

10. It is submitted with regard to the last three show‑cause notices that orders were passed in favour of the Karachi Collectorate by the Additional Collector, Karachi vide Orders‑in‑Original No.76 of 1997 dated 17‑12‑1997; No. 41 of 1998, dated 25‑5‑1998 and No. 35 of 1998 dated 20‑5‑1998 respectively.

11. The complainant, thereafter, filed Appeals against the said Orders‑in‑Original with the Collector Appeals which were all rejected vide Collector Appeals Orders No. 115 of 1998, dated 16‑3‑1998, Nos.524 of 1998 and 525 of 1998 both, dated 10‑8‑1998. However, in terms of the Orders, dated 10‑8‑1998 in Appeals Nos. 524 of 1998 and 525 of 1998, the penalty amounting to Rs.37,000,000 was remitted to the complainant.

12. The complainant filed an Application under rule 11 of Rules ("Application") for refund on March 3, 1999. However, the respondent Collectorate did not issue any response. Respondent Collectorate, according to the counsel should have followed the procedure prescribed in Central Excise General Order No.6 of 1987 but neither a show‑cause notice rejecting the claim for refund nor an; hearing was filed in the matter.

13. Since the Collector Appeals had remitted only the penalty, the complainant filed further Appeals before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench (Tribunal). The Tribunal by a common Order, dated 2‑3‑2000 held. "In the circumstances of the present case we are satisfied that there was no wilful failure on the part of the appellant in depositing the applicable Duty. Therefore, we hold that on the facts and in circumstances of the case it would not be just and fair to inflict additional duty under section 3B of the Act as well as penalty under rule 210 of the Rules. Accordingly, the additional duty and penalty as imposed in the impugned order is remitted "

14. The respondent Collectorate, however, did not take any action to refund the amount even after Tribunal's decision despite complainant's efforts. The complainant through its Counsel again wrote to the respondent Collectorate in November, 2000 to decide application filed under rule 11 requesting refund of the unlawfully recovered amount. However, no response was ever received to that letter. Reminders, dated 23‑7‑2001 and 18‑8‑2001 too remained un-responded.

15. The complainant sent another Notice, dated 6‑2‑2002 through its Counsel to the respondent Collectorate. However, despite the lapse of the two weeks period mentioned‑ in the notice, the respondent Collectorate in blatant disregard of the law have once again failed to even respond to let alone take action in the matter.

16. The complainant, therefore, filed Constitutional Petition No. 1685 of 2002 in the High Court of Sindh. However, based on the experience of the complainant as regards the expeditious disposal of cases before the Federal Tax Ombudsman, the complainant withdrew the said Petition with the permission of the Hon'ble High Court of Sindh (as evidenced by the Order, dated 22‑5‑2003), in order to file the instant complaint:

17. It was further submitted on behalf of the complainant that in a similar case of the complainant (Complaint No. 394‑K of 2002), the FTO vide Order, dated 20‑9‑2002 directed that the refund application attached by the respondent under section 11 of the Central Excises Act, 1944 be considered by the competent officer and decide the same following the prescribed refund procedure.

18. The complainant prayed for a recommendation to the respondents to forthwith effect the refund to the complainant of Rs.55,420,459 on account of its unlawful adjustment towards "additional duty" and penalties with interest and costs and grant any other or further relief which might be deemed fit and proper in the circumstances of the case.

19. Responding to the notice served under section 10(4) of Ordinance XXXV of 2000, Mr. Nisar Muhammad Collector, LTU, Karachi submitted that no such claim of refund of excise duty was pending with LTU. However, the complainant was being approached to provide the documents in relation to their claim so that it could be processed. A copy of the letter, dated 21st July, 2003 addressed to the complainant was enclosed with respondents comments.

20. Representatives of the two sides were heard. The Deputy Collector submitted that the Applications for refund and other correspondence in that respect referred to in the complaint were not available on 'the records received by the LTU from the Collectorate. He undertook that the claim would be processed and settled in LTU as, soon as copies of relevant documents were furnished.

21. Maladministration alleged on the part of officers dealing with the matter in the Collectorate prior to transfer of jurisdiction to LTU is proved. They not only did not take due action on the applications but also did not take care of the relevant record. Further maladministration on their part is proved for transferring incomplete record to LTU. Maladministration is also proved on the part of Officers dealing with the notice of this Office at LTU for failure to approach the Collectorate concerned seeking the records relating to refund applications instead of requiring the complainant to file duplicate copies of the record again. It is a matter of serious concern that no action is contemplated under the rules even against those officers/officials who are proved delinquent

22. It is recommended that:‑‑ (a) The Director General (DG) LTU ensures payment of refund to the complainant by September 30, 2003. (b) The Member Central Excise, C.B.R. directs the concerned Collector to identify the offices/officials responsible for the maladministration found supra and proceed against them under the rules. (c) Compliance of recommendation (a) is reported by DG, LTU within 30 days. (d) Compliance of recommendation (b) is reported by Member, Central Excise, C.B.R within 60 days. C.M.A/1052/FTO Order accordingly.