FBR Dismisses 3 Customs Officers Over Rs. 7 Billion Clearance Scam

The Federal Board of Revenue (FBR) has dismissed from services three Customs inspectors of Islamabad, who deliberately cleared high-value imported items including mobile phones, wristwatches, and cosmetics, involving nearly Rs. 7 billion, under cover of helicopter parts imported under the name of a charitable foundation.

In this connection, the FBR issued three notifications on Friday to punish the involved officers in the scam.

According to the notifications, the FBR has dismissed from services Aziz-Ur Rehman, Customs Inspector; Usman Ali, Customs Inspector and Sehrish Nazir, Customs Inspector.

The foundation was not aware that its name had been fraudulently used to import high-value imported consignments without payment of duties and taxes.

The Customs clearing agents in connivance with the said customs inspectors committed revenue loss to the tune of around Rs. 7 billion to the national exchequer. The outdated/manual One-Customs Clearance system was used to clear the imported consignments that were required to be cleared through the automated WEBOC system.

Details revealed that the disciplinary proceedings were initiated against these Inspectors Customs (BS-16) of Collectorate of Customs, Islamabad on charges of “Inefficiency” & “Misconduct” under Rule-3(a)&(b) of the Government Servants (Efficiency & Discipline) Rules, 1973. An inquiry committee comprising, Rizwan Salabat, (PCS/BS-20), the then Additional Collector, Collectorate of Customs, Islamabad, and Farheen Zahra, Deputy Collector, Collectorate of Customs, Islamabad was constituted to conduct the inquiry against the accused officer.

Brief facts are that the Directorate of Intelligence & Investigation-Customs, Rawalpindi raided the Air Freight Unit (AFU) of the Collectorate of Customs, Islamabad, and seized a consignment consisting of high-value items such as smartphones, wristwatches, wristbands, cosmetics, and other miscellaneous imported goods.

The then Collector of Customs, Islamabad ordered a Fact-Finding Inquiry. The Fact-Finding Report established that apart from the one consignment seized by the Directorate of I&I, there were Eighty (80) other Goods Declarations (GDs) which had already been cleared during the financial year 2019-2020 in the name of Agha Khan Foundation and declared as “Helicopter Parts” without payment of duty and taxes.

When approached by the Collectorate, the Agha Khan Foundation stated in writing that it had not imported the said consignments and that the Clearing Agent had misused the foundation’s name. The Clearing Agent managed to bypass a number of standard operating procedures in the clearance of goods and had them gated out with the connivance of the accused and others without payment of duty and taxes to the tune of Rs. 6.797 billion and Rs. 152.548 million.

The Adjudicating Authority in this case also observed that the scam could not have occurred without the involvement of Customs Officials. Furthermore, Customs Appellate Tribunal Bench-1, Islamabad, vide two separate decisions dated 15-06-2023 has upheld the decision by the Adjudicating Authority.

Another Fact-Finding Inquiry was also ordered to cover any aspect of the fraud that had not been covered by the original Fact-Finding Report. As a result, new charges were added to the already issued charge sheet of allegations vide Addendum by the Authorized Officer.

During the inquiry proceedings, the Inquiry Committee observed that Inspectors were posted on the scam, and Goods declarations (GDs) had been marked for examination. The accused failed to carry out an examination of the goods and furthermore failed to ensure or even inquire if the mandatory approval for filing of a Goods Declaration for One Customs was accorded or not.

All goods being imported by the Agha Khan Foundation were being cleared through WeBOC- the successor clearing system of One Customs, yet the Inspector cleared the said GDs in “One Customs”. The accused failed to carry out any of the required procedures under the law and signed Delivery Orders effectively handing over the goods to the Clearing Agents without verifying the relevant documents to ensure that Customs Clearance had been done as per law.

Concludingly, the Inquiry Committee observed that the charges against the accused Inspector Usman Ali, Collectorate of Customs, Islamabad, stand proven beyond any iota of doubt.

The Inquiry Committee submitted an Inquiry Report dated 31.08.2022, according to which the charges of “Inefficiency” & “Misconduct” as mentioned in the Charge Sheet/Statement of Allegations were established against the accused officers. Accordingly, the Collector/ Authorized Officer served upon them Show Cause Notices. After due process, the Collector/ Authorized Officer recommended to the Authority i.e. Member (Admn/HR), FBR to impose a Major Penalty of “Dismissal from Service” on the accused Inspectors of the Customs department.

Whereas Member (Admn/HR)/Authority under Rule 5(1)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973, in this case has gone through the available record of the case, facts of the case, Charge Sheet/Statement of Allegations, Inquiry Report, Show Cause Notice, reply to the Show Cause Notice, verbal submissions, written statement made by the accused officer during the course of personal hearing, and contentions put forth by the Departmental Representative (DR), has agreed with the recommendation of the Authorized Officer/Collector and has imposed major penalty of “Dismissal from Service” under Rule-4(1)(b)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973 upon the Inspectors Customs (BS-16).