LAHORE: Importers have expressed concerns over not attending their refund claims in correct factual and legal perspective by the customs officials, saying that their decisions suffer from legal errors warranting interference and positive correction by the relevant forums, said sources.

They said the department was also mixing up public and private sector cases to withhold refund claims on the basis of the doctrine of unjust enrichment while deciding the fate of refund claims.

So much so, they said, the Customs officials prefer to interpret the provisions of Customs Act as per their own discretion which fails to hold ground before the appellate forums. But still, this self-styled interpretation of the law helps the department to withhold refunds of both the public and private sector companies for years in order to show maximum revenue in its kitty to the Federal Board of Revenue (FBR).

According to the sources, the Customs department relies upon the law declared in the Fecto Belarus Tractor case where the imported goods were sold in the open market along with the incidence of customs duty paid at the import stage.

The department officials presume a similar inference in case of the equipment imported by the services sector and refuse to entertain their refund claims either on one or the other pretext.

In the case of Fecto Belarus Tractor, the doctrine of unjust enrichment was applied to refuse the refund claim of the importer despite the fact that there was no statutory provision in the Customs Act, requiring the importer to prove that the incidence of the customs duty had not been passed on to the purchasers.

The sources added that the customs officials reject the refund claims on a flimsy ground that the claimants had failed to produce no objection certificate from the relevant authority at the time of filing Goods Declaration (GD) and the refund claims.

The purpose of this exercise is again to linger on the issue simply to withhold the amounts due to the importers on the part of the department, they added.

It may be noted that the SRO457(I)/2004 has become a hard but to crack between the department and importers due to the hurdles created by the Customs officials in smooth clearance of refund claims timely.

In most of the cases, the department refuses to entertain any such claim on account of non-entitlement of the claimant to avail the benefit of the concessionary rate of customs duty under the said SRO on the imported equipment.

When the importers cross this hurdle, they are confronted with another impediment erected by the department related to the non-fulfilment of the conditions precedent to avail the said benefit, said the sources, adding that another popular ground taken by the department in declining the claim is that the claimants had failed to file it within the prescribed period.

Non-production of irrefutable documentary evidence that the claimant has not passed on the incidence of the paid Customs duty to their consumers, they pointed out. Accordingly, a large number of refund claims are lying pending with the department waiting for a favourable verdict from the relevant forums.

Copyright Business Recorder, 2023