DAC finds non-recovery of Rs662.142 million in adjudged cases

KARACHI: The Departmental Audit Committee (DAC) of Federal Board of Revenue (FBR) has identified non recovery of government revenue to the tune of Rs662.142 million in 648 adjudged cases in 2009-10.
The audit paras of the DAC notes that according to law, tax, duty or other levy being collected in the same manner as customs-duties are collected, a penalty is adjudged against; or notice or demand is served upon, any person calling for the payment of any amount unpaid which may be payable by way of penalty or by way of duty, tax or other levy shall be recovered as envisaged under Sec 202 of the Customs Act, 1969.
The Model Customs Collectorate (MCC) replied to the audit para that perusal of the statement enclosed with the audit para reveals that adjudged amount of Rs662.142 millions has been worked out hypothetically/flimsy. Each and every case has its peculiar characteristics and decision is made on the basis of facts available on the record.
As per provisions of Section 181 of the Customs Act, 1969, an option is given to the owner of the goods to pay fine in lieu of the confiscation of the goods. It is the owner’s choice either he opts for paying fine in lieu of confiscation to redeem the confiscated fine or leave the goods unclear or file an appeal before Appellant authorities. In automated computerized clearance system (In PaCCS) adjudicated consignments can only be released if fine, penalty and other recoverable taxes are paid by the importer. Such consignments remain at port area if importers prefers an appeal at the appellate for and the Collectorate can only proceed for recovery proceeding if such cases are finally decided by respective appellate fora.
The cases Sub-judice in the courts can not be preceded for recovery under section 202 of the Customs Act, 1969, unless these cases do not attain finality by the Superior Courts. It is impossible to clear the confiscated goods without payment of fine or penalty.
However to check these all case individually indicated by the audit needs thorough investigation on case to case basis.
It is therefore suggested that an audit team of RRA may be deputed for the scrutiny of relevant data, so that factual position could be ascertained and appropriate action may be initiated.
The DAC in its decision noted that it is informed that MCC (PaCCS) was working on a web based system designed by M/s. Microclear to expedite the clearance of cargo but in accordance with the Board’s directive the operation of M/s. Microclear designed system have been replaced by the indigenously developed WeBOC software system designed by M/s. PRAL. Most of the messages which were generated through the previous system are no more available and the Collectorate is now in possession of the data for Audit which was captured from the previous system to suffice its needs and the factual information conveyed to Audit is retrieved from the data.

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