Crackdown against petroleum smuggling fails

Customs identify 1,675 illegal petrol stations in three provinces

ISLAMABAD: The customs adjudicating officers have reportedly dismissed a majority of the cases made by different customs collectorates under the direction and supervision of the then member custom operations during the course of FBR’s crackdown against the smuggling of petroleum into Pakistan.

Customs officials claim that the crackdown against smuggling has increased not only duty and taxes but that they have also identified 1,675 illegal petrol stations in three provinces.

Some inside sources say that courts have also released the accused persons in criminal cases made during the crackdown.

They add that the FBR in this crackdown had engaged many federal and provincial departments and their resources to curb the smuggling of Iranian diesel into Pakistan. Also, according to them the FBR had made and issued seizure reports and FIRs from their own department in order to maintain uniformity in cases made by the FBR’s field formations.  

This country-wide multi departmental crackdown against the smuggling of petroleum was spearheaded and monitored by members of the FBR, Tariq Huda and Saeed Jadoon. The clamp down has reportedly ended in nothing after the collapse of almost all the seizure and criminal cases before the FBR’s own adjudication officers and courts of law.

Sources say that the kinds of defects and illegalities in the templates and formats of the seizures issued from the FBR were such that the officers of the collectorates defending these cases were rendered speechless before the courts. This resulted in zero recovery of tax liabilities and zero success of FIRs registered against the owners and operators of the unauthorised outlets.

Sources also say that this was such a massive failure because of the FBR’s incorrect conception and erroneous planning of the whole exercise.

The unauthorised petroleum outlets were charged with violations of the Petroleum Act, 1934 and petroleum marketing rules. Instead of requesting the ministry of petroleum and its attached departments to take action, FBR’s two members of customs took the responsibility on themselves, thereby laying the foundation of the collapse of these cases.

In assuming this responsibility, sources add, the customs’ laws provisions were arbitrarily stretched to bring these cases within their fold. The prescribed templates and formats had to connect the actual violation of petroleum laws with presumed violations of the customs law.

It was assumed that since the unauthorised petroleum outlets operated in violation of petroleum laws, these outlets must have smuggled petroleum and operated in violation of the customs law.

Sources said that the most interesting but damaging  erroneous application of law which led to the ultimate collapse of these cases was the charge in under the penal provisions of section 156(1)(8)(89) of the Customs Act but a statement of offense in templates and formats which did not fit into this charge.

Sources said that past five years’ presumed sales of petroleum by unauthorised outlets were calculated by the customs department whereas the charging sections 156(1)(8)(89) did not cover past sales.

The charging sections covered only smuggled goods seized while entering the country and smuggled goods actually found in someone’s possession.

Inside sources not wanting to be named, said that the 2021 crackdown against petroleum smuggling could have easily be turned into a historic success if the FBR’s officers had taken on only the responsibility of preventing smuggling of petroleum under the prevention of smuggling act and had left the legal actions under the petroleum ministry.

The customs official, who talked on behalf of Huda, says that customs collectorates had started operations against illegal petroleum oil and lubricants’ (POL) retail outlets in three provinces Punjab, Sindh, & KPK on the direction of the PM office.

They identified 2,615 illegal POL outlets during this exercise. Out of these, 859 legal pumps submitted documents in the requisite time while 1,675 failed to do so.

Meanwhile, 506 cases stayed by court or referred to district administration/OGRA for regulatory actions and in 1,170 cases criminal action was initiated by customs, he adds.

He also informed that a significant rise was observed in the import value of POL products from the previous three and Rs 8 billion increase in collection of Duty & Taxes on POL products reported for the month of March 2021 Vs March 2022.

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Shahzad Paracha
Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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