23 duty drawback claims: rejection of ADRC recommendations by FBR arbitrary step: FTO

The Federal Board of Revenue has resorted to maladministration by wrongly rejecting recommendations of the Alternate Dispute Resolution Committee (ADRC) constituted for clearance of 23 time-barred duty drawback claims. In his latest order (complaint no 507/2011), Federal Tax Ombudsman (FTO) Dr Muhammad Shoaib Suddle observed that the treatment given to the complainant by the FBR is discriminatory and tantamount to maladministration.
The FBR's rejection of the unanimous recommendations of the ADRC is also both arbitrary and unreasonable. The FTO further recommended that the FBR should direct the concerned officials to condone delay in the filing of duty drawback claims under the provisions of Section 224 of the Custom Act 1969 and decide the pending cases in accordance with law within 21 days and report compliance within 07 days thereafter.
Dr Suddle further observed that the FBR is allowing condonation on delay in submission of documents in many cases. The Customs Collectorate has also allowed condonation of delay in other duty drawback claims. The treatment given to the Complainant is discriminatory and tantamount to maladministration under Section 2(3)(i) of the FTO Ordinance, 2000. The FBR's rejection of the unanimous recommendation of the ADRC is also both arbitrary and unreasonable.
Details of the case revealed that the M/s Starpak Martial Arts (Pvt) Ltd has filed a case alleging maladministration in passing arbitrary and unreasonable orders of rejection of unanimous recommendations of ADRC constituted by the FBR. The complainant field 23 customs duty drawback claims for the years 2004 and 2005. During scrutiny of documents, the Department observed that claims were filed after expiry of limitation.
The Deputy Collector Customs rejected the claims vide O-in-O No 131/2006. The complainant filed appeal before the Collector (Appeals) against the decision of Deputy Collector. As the appeal was rejected vide O-in-A No 74/2007, the Complainant filed further appeal before the Appellate Tribunal. While appeal was pending before the Appellate Tribunal, the Complainant requested the Federal Board of Revenue for appointment of ADRC in terms of Section 195C of the Customs Act 1969. The FBR appointed the ADRC vide letter dated 06.10.2007.
The ADRC examined the case and observed that late filing of claims was of no advantage to the exporter and hence it could not be deliberate. The ADRC unanimously recommended for condonation of delay under Section 224 of the Customs Act 1969. However, the FBR found the explanation of late filing of claims not satisfactory and rejected the recommendations of the ADRC in terms of Section 195C(4) of the Customs Act 1969.
Feeling aggrieved with the decision of the FBR, the Complainant filed this complaint alleging maladministration for passing an arbitrary and unreasonable order almost three years after submission of recommendations of the ADRC. The Board was required to take decision on the recommendations of ADRC within 45 days of receipt of recommendations as stipulated in sub-section (4) of Section 195C of the Customs Act 1969.