The Federal Board of Revenue (FBR) has yet to implement a foolproof system to check cases of foreign currency theft at state warehouses, despite the theft of large quantities of dollars from the State Warehouse (Valuable), Collectorate of Customs (Enforcement) in Lahore.
On Thursday, the Federal Tax Ombudsman (FTO) issued an order exposing the incidences of stolen dollars from the FBR’s state warehouses.
Precisely, the facts of the case are that after seizing Complainant’s goods (US$ 11,700/-, Euro 300/- & Pound 80) the Department made seizure Report No. 5083/2016 dated 09.12.2016 and sent it to the Adjudicating Authority. The Adjudicating Authority, vide Order-in-Original No.17/2017 dated 03.05.2017, confiscated the seized foreign currency exceeding US$ 10,000/-. Aggrieved with aforesaid Order-in-Original, the Complainant filed an appeal before Customs Appellate Tribunal (CAT) who, vide Order-inAppeal No.367/LB/2017 dated 05.03.2018, directed the Department to release Complainant’s currency.
The D.C, SWH (Valuable), Collectorate of Customs (Enforcement), Lahore, vide letter dated 16.12.2022, informed A.C (Traffic), AIIA, Lahore that the currency had been stolen from SWH (Valuable) and an FIR No.03/2020 dated 08.01.2020 had been lodged on misappropriation! theft and criminal proceedings were underway in the Special Court of FIA. I.
The FTO has recommended the FBR Member (Admin) proceed by taking this Order as an investigation report and initiate disciplinary proceedings under E&D Rules, 2020, by appointing an inquiry officer against the dealing and supervisory officers/officials concerned.
The FTO has instructed the Director General l&l-Customs and Chief Collector of Customs (Enforcement) to jointly conduct an inquiry to examine/evaluate the rules/procedures for the safe custody of valuable goods in the state warehouse and suggest corrective measures to be adopted and incorporated in law in such incidents of theft.
The FTO has further directed the Collector, Collectorate of Customs (Enforcement), Lahore to implement the orders of CAT dated 22.07.2022 and refund to the complainant an amount of US$ 10,000 or equivalent in Pak rupees on the current exchange rate. Moreover, compensate the complainant with an amount of Rs100,000 for his loss/damage in terms of Section 116 of the Customs Act,1969.
The FTO has directed the Director General l&l-Customs and Chief Collector of Customs (Enforcement) to jointly conduct an inquiry to examine/evaluate the rules/procedures for the safe custody of valuable goods in the state warehouse and suggest corrective measures to be adopted and incorporated in law in such incidents of theft.
The FTO order revealed that the complaint was filed against the Collectors, Collectorate of Customs (Enforcement), Lahore, and Collectorate of Customs (AIIA), Lahore, for the delay in paying/returning an amount of US$ 10,000 to the complainant, pursuant to Customs Appellate Tribunal’s Order dated 22.07.2022.
The Customs Appellate Tribunal (CAT) ordered to release of an amount of US$ 10,000 to the complainant. After passing the CAT’s order, the Complainant approached D.C (Traffic), AIIA, Lahore for the release of currency US$ 10,000. The Customs, State Warehouse (Valuable), Collectorate of Customs (Enforcement), Lahore informed that the currency had been stolen from SWH (Valuable) and an FIR No 03/2020 dated 08.01.2020 had been lodged on misappropriation theft and criminal proceedings were underway in the Special Court of FIA.
The FTO order said that the Collectorate’s comments are inconclusive and evasive as no specific road map, or timeline for the recovery of stolen goods was provided. The goods were deposited in State Warehouse in 2016 and have reportedly been missing since 2019.
No timely legal action was initiated by the Collectorate for the recovery of stolen goods and redressal of grievances of the lawful owner of the goods. Section 116 of the Customs Act, 1969 is abundantly clear as regards entitlement of compensation to the lawful owner on account of damage to goods due to the willful act or neglect of the Warehouse Keeper or Custom Officer.
The Complainant has established misappropriation of his goods and Custom authorities have also confirmed that goods were missing after depositing in the State Warehouse.
The lawful owner of goods cannot be deprived or kept waiting indefinitely for no fault of his due to complex chains of procedural/official formalities and is entitled to compensation in accordance with the law. Maladministration is clearly established on part of the Department in terms of Section 2(3) of the FTO Ordinance, 2000, the FTO order added.
