Fraud in importation of BMWs: Former Customs Chief denies allegations; The Island  stands by its story

Rs. 16 bn revenue loss



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Apropos the news item, ‘Customs tell Court of Appeal: Investigation into Rs.16 bn vehicle tax fraud resumed’ on the front page of June 7 edition of The Island, former Director General, Customs W.A. Chulananda Perera, has sent us the following statement: Recently, your newspaper published an article based on the baseless, malicious and defamatory allegations by one Mr. Nagahananda Kodithuwakku that I, during my tenure as the Director General of Customs, was directly involved in defrauding Rs. 16 billion through the importation of BMW cars. Owing to these malicious and defamatory statements, I, my wife, my three children and my family have been subjected to much mental trauma and damage to our good reputation. Therefore, in the interest of fair play and reasonableness, I request that this letter too be published in your newspaper, with equal prominence.


 1.  The period in which the vehicles were released


The BMW vehicles in question were imported in the years 2011, 2012, 2013 and 2014, based on the vehicle permits issued for government employees that enable them to purchase vehicles at a concessionary (reduced) duty rate. However, during the aforementioned time period, I was not attached to the Sri Lanka Customs, but to the Department of Immigration and Emigration as its Controller General. Hence, I have not been involved in the purported importation of the BMW vehicles in any manner whatsoever and the false allegations aimed at me saying my involvement in the matter are utterly false and baseless.


 2.  Initiation of the Sri Lanka Customs examinations and inquiries


On an information said to be received by from a private informant of Mr. Dayaparam, then Deputy Director of Customs in-charge of Motor Vehicle Unit of Sri Lanka Customs, who himself had released most of these BMW vehicles to the importers even after the receipt of such information, had acted in a collusive manner, while causing examinations and inquiries into the said vehicles as a Director of Customs of the Central Investigation Bureau. The said examinations and inquiries were not, therefore, launched by me. The aforementioned inquiry was initiated in 2013, 2 years before I assumed duties as the Director General of Customs.


3.  The nature of a Sri Lanka Customs inquiry


All inquiries launched by Sri Lanka Customs pertaining to any violation is led by a competent Customs officer who has the complete independence to carry forward his inquiry as far as the motion of the inquiry process is within the law and if not then only I have power to superintend the matters in terms of the law.. As enumerated by the decisions of the Superior Courts, this officer is vested with quasi-judicial powers and is completely autonomous of the administrative control of the Department. The Director General does not have any authority to command or influence the inquiry officer; Hence, I hereby state that neither I, nor any other officer in the Department, had any power to influence or command over the aforementioned inquiry officer.


4.  The decision of the BMW inquiry and its legal basis


It is not mandatory or directory to report to me of the outcome of the inquiry by the Customs inquiry officer However I was presented with the report detailing the findings of the inquiry only after the delivery of the order of the inquiry in some cases and not on mid-stream. This is a customary practice of Sri Lanka Customs. The Director-General of Customs is not enabled to engage with, inquire on, give comments to, or have any influence or say over an ongoing inquiry except in very rare occasions where the ex-farce gross injustice appears to be taken place. This case there was no such thing and was conducted extremely independent manner. Nevertheless Clarifying the legal basis in which the decision is based on, the inquiry officer, in his report, explained to me that, from year 2003 to the end of the year 2017, the duties imposed on all imported vehicles were not decided applying the GATT system of valuation in terms of article 1 to 9, but based on the article 10 of Schedule "E" of the Sri Lanka Customs Ordinance, which empowers the Minister in charge, with the approval of the Cabinet of Ministers, to decide on the "Minimum" values of good as well as the duties to be charged on the said goods on such figures On this basis, the Minister, in consultation with a committee constituent of Customs officers as well as representatives of the Motor Vehicles Association, had fixed the value of each type/model of vehicle to be imported. Where any such value is fixed based on article 10 of the Schedule "E", the duty imposed by Sri Lanka Customs should be calculated on the said scheme of value. Hence, in a situation where the Minister, along with the Cabinet, had directed the scheme of values, and, therefore, there is no revenue loss that could be taken place in accordance with the law.


In the report, the inquiring officer had clearly mentioned that the disputing parties had been asked to attend the hearing process for 52 sessions and that he had also examined more than 3500 documents pertaining to the issue. He further mentioned that he had studied the provisions of the Customs Ordinance in-depth before arriving at a conclusion. Hence, I have no authority or power whatsoever vested in me to question, influence or change the decision of a process such as this, which embodies the principles of natural justice. I also note that, from the date of announcing the said decision, till I got my transfer from the position of the Director General of Customs, neither party had raised any claim or argument that they are unhappy and not in agreement with the decision of the inquiry.


However, it had been brought to my attention that certain parties had filed action challenging the order of the inquiry officer for which they are entitled to as any party, who is not satisfied with the decision of the Customs Inquiry, has the right to lodge an appeal at a superior court. When such mechanisms have been established by law to counter any decision of the due process, it is unreasonable and unjust to make such malicious, baseless and defamatory statements against other individuals. It is also contrary to justice, fairness as well as media ethics, that any such malicious, baseless and defamatory statements are published in newspapers without properly and impartially assessing the truth of the matters.


5.  The reason for my transfer from Sri Lanka Customs


It has been published that I was transferred from Sri Lanka Customs to the Sri Lanka Administrative Service Officers "Pool" owing to the issue in discussion. This is an upside-down lie – false and malicious. In fact, I requested the Secretary to the Ministry of Finance several times to be released from my portfolio. Based on my numerous requests, as well as taking into consideration other practical requirements, I was given a transfer. However, I vehemently state that, I was not transferred owing to any allegation of fraudulent activity, disciplinary issue or inefficiency, and that this fact is well known and acknowledged by H.E. the President, Hon. Minister of Finance, and the Secretary to the Ministry of Finance.


Moreover, it should be placed on record that a Sri Lankan Administrative Service (SLAS) Officer can be transferred from his present post in two main ways: either a direct transfer from one portfolio to the other, or first a transfer to the "Pool" and then allocated to a suitable portfolio. The second recourse is often opted for in cases where there are no suitable vacancies for the respective officer. However, in my case, I was first transferred to the "Pool", and the very next day, was offered the portfolio of the Additional Secretary to the Ministry of Tourism Development. Yet, based on the personal request I made to the then Secretary of the Ministry of Public Administration, Mr. Rathnasiri, I did not accept the position offered, instead opting to remain in the SLAS Pool. This was based on my personal necessity, and not on any other grounds that have been maliciously stated and reported in the newspapers.


Therefore, I hereby affirm that I was not involved with, or any influence over the purported BMW importation or the ensuing examinations and inquiries. I further note that this letter is not a response to the malicious, baseless and defamatory statements made against me by certain individuals with ulterior motives, or the newspaper articles published in that regard, but purely for the information of the general public for them to know the truth of the matters.


I also express my disappointment over the fact that, Mr. Nagahananda Kodithuwakku, a former Customs Officer and a Lawyer educated in the United Kingdom, has stooped to make such baseless and malicious allegations, subjecting me, my wife, my three daughters and my family to untold mental trauma and damage to my good reputation earned through years of hard work and commitment in the government service for the general public of Sri Lanka. I also plan to take appropriate legal action against such statements, especially considering the significant damage this caused to our good name and reputation in the society."


News Editor Note: The Island article was based on an assurance given by Chulananda Perera’s successor, Sarojini Charles, to the Court of Appeal, through the Attorney General’s Department, that a directive to impose a penalty of Rs. 100,000 each on 1,675 imported BMWs would be rescinded and a fresh inquiry held as well as the letters pertaining to Customs seeking the assistance of German authorities to inquire into the matter. 


The former DG was never accused of perpetrating the said fraud. Our report only dealt with the circumstances under which the present DG had cancelled a previous directive. We stand by our report, based on court proceedings and documents submitted to the court.


 


 
 
 
 
 
 
 
 
 
 
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