Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2

Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---S.2(3)---Customs Act (IV of 1969), S.21--- Maladministration--Export---Claim of duty draw hack---Undertaken through Bank guarantee that import documents duly attested by a Notary Public of the importing country shall be furnished and failing which the Bank guarantees would be surrendered in favour of the Collectorate---Department encashed such Bank guarantee and stopped payment of rebate on the ground that complainant/exporter attempted to export 100% cotton yarn in garb of blended yarn and intended to defraud the public exchequer---Demand of notarized import documents, encashment of Bank guarantee and stoppage of payment of rebate was alleged to be maladministration ---Validity--­Department alleged that the claim of rebate was not genuine but fraudulent---Question should he considered and decided because mere encashment of the Bank guarantee did not lead to the conclusion that action taken by the Department withholding the claim of rebate and releasing same on condition of furnishing Bank guarantee was in pursuance of a conclusive finding given about the fraud allegedly committed by the complainant/assessee---Maladministration existed in withholding the rebate without deciding the question of fraud and appropriating the Bank guarantee in final settlement of the charges---If there would have been no allegation of fraud the rebate would have been paid which could be refused if the allegations of fraud were proved according to law which was not done---Federal Tax Ombudsman recommended that the Collector of Customs should decide the question of fraudulent transaction as alleged against the complainants after notice to them and in the light of the decision the question of encashment of guarantees be also decided. FINDINGS/DECISION Messrs Khoinoor Industries Limited, Faisalabad, have filed this complaint having felt highly aggrieved due to illegal, mala fide attitude of the Exports Collectorate who allegedly forced them to furnish bank, guarantees against duty drawback claims of 39 shipments made in 1997 and not releasing the same on whimsical and capricious grounds. The complainants pleaded…

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