2011 PTD 2381 (PLP)

(ii)??????? whether the seizure of the vehicle was justified and (iii)?????? whether applying the exchange rate and duty/taxes prevailing on 21-12-2010 was lawful?

11. As admitted by the Customs, the complainant had presented all relevant documents such as copy of Bill of Entry (GD), Sale Permission and Registration Book at the time of interdiction of the vehicle by the Customs on 27-8-2009. The Customs did not doubt the bona fides of the Complainant as an innocent buyer of the vehicle. The adjudicating officer of Customs, the Collector Customs (Appeals) and the Customs Appellate Tribunal had all accepted the complainant's innocence and due diligence. However, the adjudicating officer had made a serious mistake while recording his judgment vide para 08 of Order-in-Original No.27 of 2010 dated 30-1-2010:-- "I have gone through the case record and also heard the seizing agency as well as the respondent's counsel. Without prejudice to the bona tide of the respondent, who may be an innocent buyer, the fact remains that the impugned vehicle was unlawfully brought into the country without payment of duty and taxes chargeable thereon." The above conclusion by the adjudicating officer was factually incorrect as the vehicle was lawfully imported without payment of duty and other taxes under S.R.O'. 506(I)/1988 dated 26-6-1988 which allowed duty free import of vehicles to the privileged persons. This fact was duly recorded vide para 10 of order-in-appeal: "The contention of the owner that the vehicle was registered by the Islamabad ETO after verification of the relevant documents and the vehicle was brought lawfully into the country, and not unlawfully brought into the country as charged vide Order-in-Original No.27 of 2010 dated 30-1-2010, is correct." It appears that the mistake made by the adjudicating officer to treat the import of this vehicle as 'unlawful' led to its outright confiscation. It also appears to have influenced the error made by the Customs in determining the value and applying the rates of exchange, duty and other taxes with reference to 21-12-2010 after the Appellate Tribunal's judgment, rather than 5-9-2007 when the vehicle was sold in the local market and the leviable duties and taxes were originally assessed and paid under S.R.O. 577(I)/2006 dated 5-6-2006 instead of S.R.O. 576(1)/2006 dated 5-6-2006 due to fake sale permission.

12. It is also observed that it was not a case of smuggling or unlawful import of a vehicle but of fraudulent change of level of concession at the time of sale of the vehicle in the local market from S.R.O. 576(1)/2006 relating to privileged persons to S.R.O. 577(I)/2006 relating to diplomats. Thus, it would have been fair to demand the amount of short-levy caused by manipulation of higher level of concession on the same basis of the date of sale of the vehicle in the local market i.e. 5-9-2007, rather changing the date of reassessment to 21-12-2010. The provisions of S.R.O. 576(1)/2006 dated 5.6-2006 did not warrant levy of exchange rate or duty and taxes other than those applicable on the date of sale of vehicle in the local market which in this case was 5-9-2007.

13. As regards the fate of investigation into the faking scam, the Directorate General reported the position vide its letter C. No. 1(26)DGCl/Ops/2008/PT. File/3942 dated 11-7-2011 as under:-- (a)? The Court of Special Judge (Customs), Rawalpindi has declared two main accused persons i.e. Muhammad Shafiq Khan and Asghar Hussain as proclaimed offenders. (b)? Muhammad Shafiq Khan, Assistant has been dismissed from the Government-Service on 17-10-2009 by the Ministry of Foreign Affairs, Islamabad being guilty of "Misconduct". (c)? Ministry of Interior has been requested through PBR for placing names of two above named accused persons on ECL. (d)? List of 96 diplomatic vehicles against which fake Sale Permission Certificates were issued has been circulated among the Customs Collectorate for their detention/seizure. 18 such vehicles have already' been seized by various Collectorates/ Directorates. (e)? List of 96 diplomatic vehicles was also circulated among the Excise and Taxation Departments for cancellation of their registration/hold the transfer of ownership. (f)?? The Deputy Collector of Customs, Islamabad Dryport, was asked to work out vehicle-wise liability of evaded amount of duty/taxes of 96 diplomatic vehicles. The MCC, Islamabad has sought certain clarifications in this regard from F.B.R. (g)? After detection of the scam, Ministry of Foreign Affairs has streamlined the procedure for issuance of sale permission certificates of diplomatic vehicles. The Customs authorities of Islamabad Dryport are now making confirmation of sale permission certificates on case to case basis from the Foreign Office. Presently, the NOCs are delivered by the Dryport to the concerned diplomats or authorized representatives of concerned embassies only."

14. It is evident from the report that hardly any progress has been made after 2008 as the real culprits and their accomplices in the Customs department have yet to be brought to book. Findings:

15. In view of the foregoing discussion, maladministration of the Customs authorities is established in terms of section 2(3) of the FTO Ordinance, 2000. Re-commutations:--

16. F.B:R. to- (i) direct the Customs to re-determine the short-levied amount, as per law, on the basis of the date of the vehicle's sale in the local market i.e. 5-9-2007, as per provisions of S.R.O.576(I)/2006 dated 5-6-2006; (ii) release the vehicle to the complainant on payment of the short-levied amount, if any, worked out on the basis of (i) above; (iii) direct the Directorate General I and I to bring the investigation to its logical conclusion by apprehending the culprits and brining them to justice; and (iv) report compliance within 30 days. C.M.A./204/FTO???????????????????????????????????????????????????????????????????????????????? Order accordingly.