2004 PLP 1041 (PTD)

The Assistant Collector of Customs replied to the complainant that Pakistan Dairy Association had made a representation, dated 1-4-2002 allegating that a substantial quantity of adulterated and sub standard skimmed milk powder was being imported from East European countries. Pursuant to this representation, all consignments of skimmed milk powder were detained and representative sealed samples were sent to HEJ Laboratory to check fitness for human consumption. The Laboratory's test reports "revealed inconsistencies in inferences drawn from observations" arid different results were obtained. Under the Import Policy Order, the release of food/edible items was subject to confirmation of goods being `fit for human consumption, `balance shelf life', and `confirmation of manufacturing and expiry dates on the packages'. When the importers filed ex-bond bill entry for home consumption, the release of skimmed milk powder was tinder scrutiny /testing before release. After receipt of release instructions from the Ministry of Food, vide letter, dated 10-8-2002, the consignments were released. The time taken for confirmation of fitness for human consumption should not be treated as maladministration.

6. The Assistant Collector of Customs invited attention to the Complaint No. 809 of 2002 of Messrs Balagamwala Oil Mills (PVt.) Limited where the same question was raised and the Federal Tax Ombudsman had recommended to expedite the matter with the Ministry of Food and Agriculture and finalize the case within 15 days In this case after the clearance of goods @ 25 % the importer claimed refund of 5 % duty. The higher rate of duty was paid according to the prevailing tariff rate and the complainants were not entitled to refund.

7. The Assistant Collector has referred in his reply to the complaint to various documents enclosed as Annexures A,B,C,D,F and G but none of these Annexures has been received with the reply.

8. In the rejoinder to the respondent's reply, the counsel for the complainants stated that the allegation of the Pakistan Dairy Association did not prove that the milk imported by the complainants was sub-standard or adulterated When the sample was sent to HEJ Laboratory for test, it categorically-confirmed that milk imported by his client was fit for human consumption report was sufficient evidence that the milk imported by his client was fit for human consumption. If divergent test reports created doubts about the quality of milk powder, these should not be made basis for stopping milk power imported by his client. The reliance of the Customs Authorities on reports of other milk importers were clearly tantamount to maladministration.

9. He further stated that Ministry of Food had no jurisdiction to issue release instructions. the reference of the matter to the Ministry of Food by the Customs Authorities was itself an act of maladministration because they sought refuge under the Ministry's release instructions. The instructions of the Federal Tax Ombudsman in another case cited by the Department has no nexus with the release of the complainants' consignments. He further stated that the contention of the Customs Authorities that they could not allow refund due to restrictions imposed by law in section 104 of the Customs Act read with section 30 was not justified because the C.B.R. had the powers to issue special exemption order under section 20 of the Customs Act. He requested that the Customs Authorities be directed to allow the refund under section 20 of the Customs Act.

10. During the hearing of the complaint, Mr. M. Afzal Awan, Advocate, stated that the letter, dated 12-6-2002 addressed to the Member (Customs) was an SOS message as a change in the tariff rate was expected, but no action was taken despite the express mandatory provision under section 80 of the Customs Act that the assessment should be done without undue delay. He reiterated that certificates, dated 14-5-2002 and 17-5-2002 from the Ministry of Food and Agriculture had 'been issued after testing the samples of goods imported. These certificates were not accepted by the Customs and the ex-bond bills of entry were not completed. The Customs Authorities on- their own approached the HEJ Research Laboratory who, vide their report, dated 1-6-2002, confirmed that the goods were fit for human consumption. The Customs Authorities should have completed the bill of entry after receipt of the, certificates. The bills of entry were finalized on 17-8-2002 and the importers had to pay duty @ 25% instead of 20% causing loss to them. They wrote the Collector that they were paying higher duty under protest and requested for refund of extra duty of 5 %.

11. The Assistant Collector admitted that the Customs Authorities considered it necessary' to obtain the report from the HEJ Laboratory although the importers had already submitted the certificates of Ministry of Food and Agriculture. Due to divergence in the Laboratory's reports, their consignments were retested by the Ministry of Food and Agriculture and their certificate was accepted, the delay took place because of the allegations made by the Dairy Association. Under section 30 of the Customs Act, read with section 104, the rate of duty applicable was the one that was prevalent at the time of ex-bonding and in this case duty was charged a 25%.

12. The submissions made and the arguments put forward by both the sides have been examined. It is clearly established that the required certificates from the Ministry of Food and Agriculture had been obtained and presented to the Customs Authorities. There was no justification to refer the matter to HEJ Laboratory and then again to obtain certificate from the Ministry of Food and Agriculture. If the Customs Authorities doubted the first certificate of the Ministry of Food and Agriculture, they could have referred the matter back to the Ministry for re-confirmation without unnecessarily referring to HEJ. This resulted in inordinate and avoidable delay in clearance of goods, with loss to the importers on account of higher rate of duty on the clearance of goods. This is a clear case of maladministration on the part of the Customs.

13. It is recommended that C.B.R: (i) send for the complete record of the refund claim of the Complainants; (ii) examine the circumstances surrounding the inordinate and avoidable delay in completion of assessment and release of the goods; (iii) decide the refund claim within forty-five days; and (iv) compliance be reported within two months. C.M.A./1004-A/FTO Order accordingly.