KARACHI: The Investigation Committee, formed by the Federal Board of Revenue on the recommendations of Federal Tax Ombudsman (FTO) to investigate clearance of older vehicles misusing the interpretation-of the provisions of IPO and Ministry of Commerce (MOC) instructions for clearance of cars imported by Overseas Pakistanis, has pointed out that around 250 vehicles were cleared on House BLs and named Collector Dr. Zulfiqar Malik, Additional Collector Iqbal Muneeb, Deputy Collector Ali Zaman Gardezi, Principal Appraisers Javed Raza, Javed Ahsan and assessment appraisers for being responsible in this entire ordeal.

The prepared report has been dispatched to FBR to be forwarded to FTO.

Although the Committee has noted that there was some confusion in the memorandum of the Ministry of Commerce causing misuse of the interpretation, but the sources said that it was a carefully planned game staged by the above mentioned officers and officials.

Javed Raza, who is also the president of infamous and ill-reputed Appraising Officers’ Association, and Dr. Zulfiqar Malik played instrumental role in this scam. These officers have also been involved in the Vehicles Amnesty scheme and deprived the exchequer of billions of rupees revenue. Even the vehicles not present on Karachi port were cleared against heavy bribes.

The Investigation Committee comprised of Collector Export Wasif Memon, Project Director Khalil Yousafani, Additional Director Internal Audit Khalid Hussain Jamali, Cooperative members were Deputy Collector Umar Shafi, Assistant Collector Abdul Majeed, Principal Appraiser Tariq Aziz and Appraiser Waqar Qureshi, Khurshid Shah Auditor and Superintendent Najmujl Hasan.

The Federal Tax Ombudsman (FTO) had recommended that the entire data of vehicles released by the Customs at Karachi on or after December 12, 2012 be scrutinized by a carefully selected team of competent and honest professionals of the Customs Department to identify all cases in which the Appraisement staff of MCC Appraisement, Karachi indulged in the malpractices and irregularities.

FTO noted that it appeared that the Customs staff misused the interpretation-of the provisions of IPO and Ministry of Commerce (MOC) instructions for clearance of cars imported by Overseas Pakistanis.

As the cars were initially held up by Karachi Customs at the port as these were hit by reduction of age from 5 years to 3 years vide the SRO dated 12.12.2012. Karachi Customs sought MOC clarifications through the FBR. Soon after, a strange solution was found to manipulate the dates of Bill of Lading (BL) and to show that the reduction of age limit did not apply to these cars.

Thus, hundreds of held up cars were fraudulently released with benefit of age and surcharge apparently by a tripartite collusion of Karachi Customs, the Clearing Agents and the Shipping Agents.

The room for such abuse also appears to have been created by the acts of omission and commission by the MOC. First of all, the MOC made a mistake while notifying the SRO reducing the permissible age limit of cars to 3 years and retaining the age limit of 5 years for other vehicles by failing to simultaneously amend its instructions dated 15.06.2012 in respect of the condonable excess age limit of cars. As condonation of 1 year excess age allowed by the MOC vid its instructions dated 15.06.2012 was explicitly relevant only to permissible age of 5 years, it became irrelevant to import of cars involving excess age above the permissible age limit of 3 years.

Customs authorities have admitted having released 1458 held up vehicles on the basis of date of B/L rather than export general manifest (EGM), which is a blatant violation of the MOC clarifications.

FTO noted that the Customs at Karachi had started clearing the held up cars as early as January 2013 without waiting for the MOC’s clarifications.

The FTO had recommended to the FBR to get all cases of cars imported by Overseas Pakistanis and cleared through MCC Appraisement, Karachi on or after December 12, 2012 effectively audited by officials of well-known competence and integrity; ascertain short-levied amount of duty/taxes and the surcharge involved and recover the same at the earliest; fix responsibility of Clearing Agents and Shipping Agents for manipulating the dates of B/Ls after providing them opportunity of explaining their conduct in this case.

More importantly, FTO recommends FBR to proceed against Customs officials who colluded with the Agents in these cases, misinterpreted the provisions of IPO and the MOC instructions to unlawfully benefit their colluders in ways more than one.