Leyes de Aduanas 2001, Pakistán

NOTIFICATION

Islamabad, the 18th June, 2001.

(CUSTOMS)

S.R.O 450(I)/2001.- In exercise of the powers conferred by section 219 of the Customs Act,1969 (IV of 1969), the Central Board of Revenue is pleased to make the following rules, namely:-

CHAPTER I

PRELIMINARY

1. Short title and commencement.-(1) These rules may be called the Customs Rules,2001.

(1A) Scope.-Unless specifically provided in the rules for Pakistan Customs computerized System, 2005, these rules shall apply.

(2) They shall come into force at once.

2. Definitions.-(1) In these rules, unless there is anything repugnant in the subject or context,-

(a)

"account" means all books, records, correspondence, bank and other financial statements;

(b)

"Act" means the Customs Act, 1969 (IV of 1969);

(c)

"appropriate officer" includes officers superior to an appropriate officer;

(d)

"Collector", "Additional Collector", "Deputy Collector" and "Assistant Collector", respectively, means Collector of Customs, Additional Collector of Customs, Deputy Collector of Customs and Assistant Collector of Customs appointed under section 3 of the Act in relation to an area of his jurisdiction;

(e)

"duties" includes customs-duty leviable under the First Schedule to the Customs Act, 1969;

(f)

“importer” means a person who imports goods;

(fa) “Pakistan Customs Computerized System (PACCS)” means the Customs Computerized System as defined in clause (ia) of section 2 of the Customs Act, 1969 (IV of 1969);

(g)

"related persons" means such persons only if,-

(i)

they are officers or directors of one another's business;

(ii)

they are legally recognized partners in business;

(iii) they are employer and employee;

(iv)

one of them directly or indirectly controls the other;

(v)

both of them are directly or indirectly controlled by a third person;

(vi)

together they directly or indirectly control a third person; or

(vii) they are members of the same family; and

(viii) any person who directly or indirectly owns, controls or holds five per cent or more of the outstanding voting stock or shares of business of both or each of such related person.

Explanation I.- The expression "person" also includes a legal person.

445

Explanation II.-Persons who are associated in the business of one another and that one is the sole agent or sole distributor or sole concessionaire, however described, of the other, shall be deemed to be related for the purpose of these rules, if they fall within the criteria herein before specified for related persons.

Explanation III.- One person shall be deemed to control another when the former is legally or operationally in position to exercise restraint or direction over the other.

(h)

“stay”, for Pakistani nationals, means the duration of continuous living abroad; and, for foreign nationals, means the duration of their valid visa for stay in Pakistan;

(i)

“vehicle” means a motor-car, motor-cycle, van, microbus, bus, pick-up, jeep, truck, self-driven caravan and tractor with trailer or semi-trailer or caravan.

(2) The words and expressions used and not defined herein shall have the meaning assigned to them in the Act or in the respective Chapters of these rules.”;

"CHAPTER II

[Omitted]

CHAPTER III

CUSTOMS CONCESSIONS

39. The following customs concessions shall be extended to the privileged personnel, namely:

(a)

Import free of custom duty and sales tax of articles for the personal use of the privileged person or members of his family forming part of his personal and household effects including one car per family on his first arrival in Pakistan. The time limit for import will be six months, extendable by the Collector of Customs for a maximum period of ²⁵[eighteen] months from the date of the arrival of the person concerned;

(b)

¹¹[ Omitted;

(c)

Omitted]

(d)

in addition to the above, a privileged person shall be allowed to import on payment of duty and taxes foodstuff and consumable stores including liquor and tobacco up to a C&F value of two hundred U.S.$ per month but the value of liquor will not exceed one hundred U.S.$ per month.

Note: The privileged personnel may import the monthly quotas prescribed in clauses (a) and (b) of rule 39, for a maximum period of six months at a time.

1. Articles imported customs-duty and sales tax free shall normally be re-exported and shall not be sold or otherwise disposed of within Pakistan except with the prior approval of the Government or in terms of the regulations prescribed by the Government.
2. If any other durable articles such as airconditioners, refrigerators, deep freezers, VCR ,DVD, washing machines, etc., are disposed of in Pakistan, customs-duty and sales tax, etc., shall be payable on the original value at the rate applicable to the goods in question at the time of import. The privileged personnel shall be responsible for the payment of customs-duty and sales tax and other charges before parting with the articles; provided that no customs-duty and sales tax shall be payable if sold after three years from the date of import.
3. In order to avail of the concessions under this chapter , a privileged personnel shall furnish to the Customs authorities a certificate duly signed by the Administrative Ministry of the Government of Pakistan concerned both in respect of personal and household effects, etc., imported on first arrival and subsequent monthly imports of foodstuffs, consumable stores, liquors, and tobacco in accordance with the prescribed quotas. The Administrative Ministry concerned shall verify that the conditions in the rules have been satisfied before issue of the certificate. The Administrative Ministry shall also be generally responsible to ensure that all the other conditions as per this chapter have been satisfied between the time of arrival and departure of privileged personnel:

Provided that a foreign employee of an industrial venture shall be entitled to import free of customs-duties and other taxes food stuff (excluding alcoholic beverages) upto C&F value of one hundred US $ per month subject to the condition that he shall produce a certificate from his employer to the effect that he has been employed in his industrial venture in Pakistan for a tenure of ___ years, from _____ to ___. The monthly quota may be imported for a period of six months at a time.

CHAPTER IV

PRIOR RELEASE

43. Definitions.- (1) In this chapter, unless there is anything repugnant in the subject or context,-

(i)

"application" means an application filed under rule 44 of this chapter;

(ii)

"appropriate officer" means an officer of Customs not below the rank of an Assistant Collector appointed in this behalf;

(iii) "prior release" means the delivery of an urgent consignment prior to submission of a bill of entry or a bill of export under the Act; and

(iv) "urgent consignment" means a consignment of any of the following goods imported for home consumption, or meant for export provided that the appropriate officer of Customs is satisfied that these require immediate and rapid clearance as a matter of priority, namely:-

(a)

human body organs or any part thereof, blood and blood plasma;

(b)

perishable medicines e.g., insulin, etc;

(c)

life saving drugs in nominal quantities, duly supported by medical prescription;

(d)

live animals and live plants;

(e)

newspapers, journals and other news materials;

(f)

radioactive materials;

(g)

replacement parts of computers, machines and drilling equipment (e.g. drilling bits);

(h)

any other goods, urgently required, with the approval of the Collector of Customs, in writing, on case to case basis; and

(i)

fertilizer imported by the Fertilizer Import Department, Ministry of Food and Agriculture.

44. Application for prior release.-(1) The importer or exporter of urgent consignment shall present an application, in triplicate, in the form as set out in Appendix I to this Chapter to the appropriate officer.

(2)

The appropriate officer shall cause the application to be scrutinized with reference to declarations made in the application, by taking into account the degree of urgency with which the goods are needed, the nature and value of consignment and particular circumstances relating to it.

(3)

The appropriate officer shall, after satisfying himself in this regard, accept the application for prior release by making an endorsement to this effect on all the three copies of the application.

(4)

After the application for prior release is accepted by the appropriate officer, the particulars of the consignment shall be entered in a register, in the form as set out in Appendix II to this Chapter maintained for this purpose, and the serial number of the register shall be taken as prior release number.

(5)

The prior release number and date shall be endorsed on all copies of the application and the prior release shall be deemed to have been allowed only after the entries in the register and endorsement of the application have been recorded.

45. Admissibility of prior release.-(1) Prior release shall not be admissible in cases where Import General Manifest or Export General Manifest, as the case may be, was filed two days or more prior to the submission of application for grant of prior release.

(2)

The facility of prior release shall be allowed to only those importers or exporters of urgent consignments who have sufficient balance of amount available in their accounts maintained as current or personal ledger accounts to pay the duties:

Provided that the importers or exporters, who are not maintaining such accounts shall be eligible to avail the facility of prior release on furnishing a bank guarantee or a pay order of a sum equivalent to the duties assessed provisionally by the appropriate officer and such pay order shall remain in the custody of the appropriate officer and shall be utilized towards finalization of assessment.

(3)

Bank guarantee shall stand discharged after all leviable customs-duties and taxes have been deposited.

(4)

No prior release shall be allowed if a previous case of the same importer or exporter is pending finalization for more than fifteen days.

46. Manner of prior release in case of imported goods.-(1) A file for each application shall be maintained and shall contain all relevant documents and correspondence relating to the respective clearance.

(2)

The examination staff, deputed for the purpose, shall examine the urgent consignment on priority and in compliance with the examination order and examination report shall be recorded on reverse of the original application.

(3)

The examining officer, if he is satisfied that the import of the goods is not prohibited or is not in breach of any restrictions or conditions applicable to the import of such goods, may make an order for provisional clearance of the same pending presentation of bill of entry.

(4)

The examination staff shall also endorse the original and duplicate copies of application with the words "examined", affix their signatures and shall return the duplicate to the importer.

(5)

At the time of delivery of urgent consignment, the officer of Customs shall record the effect of delivery under his signatures on original and duplicate copies of the application. The original copy of the

application shall be retained by such officer and forwarded at the earliest to the appropriate officer while the duplicate copy of the application shall be returned to the importer to accompany the urgent consignment, and for his record.

(6)

The importer of urgent consignment shall, at the time of the prior release of such goods, present a bill of entry for home consumption and other necessary documents to the appropriate officer and shall pay the whole or differential amount of leviable duties, if any, within ten days of the prior release on the basis of which the appropriate officer shall finalize the provisional assessment.

47. Manner of prior release in case of exported goods.- (1) A file for each application shall be maintained and shall contain all relevant documents and correspondence relating to respective clearance.

(2)

The examination staff, deputed for the purpose, shall examine the urgent consignment on priority in compliance with the examination order and examination report shall be recorded on the original application.

(3)

The examining officer, having verified that the export of the goods is not prohibited or is not in breach of any restrictions or conditions applicable to the export of such goods, may make an order for provisional clearance of the same pending presentation of bill of export.

(4)

The examination staff shall also endorse the original and duplicate copies of application with the words "examined", affix their signatures and shall return them to the exporter.

(5)

At the time of loading, the an officer of Customs shall record the effect of loading, under his signatures, on the original and duplicate copies of the application. The original copy of application shall be retained by such officer and shall be forwarded at the earliest to the appropriate officer while the duplicate copy of application shall be returned to the exporter for his record.

(6)

The exporter of urgent consignment shall, at the time of prior release of such goods, present a bill of export and other necessary documents to the appropriate officer and shall pay the whole or differential amount of leviable duties, if any, within ten days of the prior release on the basis of which the appropriate officer shall finalize the provisional assessment.

48. Failure to comply.- In case an importer or exporter of an urgent consignment contravenes any of the provisions of this chapter , penal proceedings under the Act shall be initiated by the appropriate officer and duties, if due, shall be recovered under the relevant provisions of the Act and the defaulter shall not be entitled for the facility of prior release, any more, in future.

AUCTION

49. Definitions.- In this chapter, unless there is anything repugnant in the subject or context,-

(a)

"auctioneer" means an auctioneer registered under rule 53;

(b)

"bid" means the price offered at an auction by a bidder for goods separately or in lots or a combination of lots of goods put to auction;

(c)

"bidder" means the person who gives a bid;

(d)

"offer" means a private offer or tender submitted before the auction or after the completion of bidding or acceptance of the bid; and

(e)

"officer" means the person who offers a private offer of a tender.

1. Application for registration of auctioneer.-The Collector may invite applications for registration of persons as auctioneers by giving public notice in at least two leading newspapers printed in English and Urdu.
2. Application to be made to the Collector.-Any person who is qualified under rule 52 to be registered as auctioneer may apply to the Collector in response to the notice given under rule 50.

52. Qualification for registration.-A person is qualified to be registered as auctioneer if he,-

(a)

is a citizen of Pakistan;

(b)

is not less than thirty years of age;

(c)

has been engaged in auctioning business for not less than five years and enjoys a good reputation for clean business;

(d)

has an established office in Pakistan;

(e)

is certified by a scheduled bank to be financially sound;

(f)

is a member of the Chamber of Commerce and Industry; and

(g)

is an income tax assessee.

1. Registration of auctioneers.- All applications received in response to a public notice published under rule 50 shall be placed before a Selection Committee consisting of the Collector, Additional Collector (Incharge of Auction), and Deputy Collector or the Assistant Collector (Concerned), which may select not more than four persons for registration as auctioneers.
2. Auctioneer to furnish bank guarantee, surety bond, etc.- A person selected for registration, shall furnish to the Collector a surety bond in the name of the President of Pakistan as given in the Schedule to this chapter on a judicial paper for good conduct in the performance of his duties as auctioneer and shall also furnish a bank guarantee for a sum of fifty thousand rupees which shall be discharged on the satisfactory termination of the term of his registration.
3. Validation of registration.- The registration shall be valid for a term of five years from the date of registration.
4. Cancellation of registration, etc.- (1) On any complaint made against an auctioneer, or where the Collector is not satisfied with the work of the auctioneer, the Collector, may after giving an opportunity of being heard to the auctioneer, withdraw any auctioneering work allotted to him or suspend such work and debar him from further registration for a specific period.

(2)

An auctioneer aggrieved by an order passed under sub-rule (1) may appeal to the Central Board of Revenue whose decision shall be final.

(3)

An auctioneer may apply for cancellation of registration after giving at least three months notice to the Collector.

1. Extension of term.- An auctioneer may be re-registered after the expiry of his term or extended term or the period for which he was debarred under rule 56 as the case may be.
2. Approval of goods for auction.-(1) As soon as the goods at any place in the custody of any person have reached the stage of being sold under the Act, or in the opinion of such person are required to be sold by auction, shall be brought to the notice of the Deputy Collector or the Assistant Collector of the area concerned by that person giving a list of such goods.

(2) The Collector shall, on receipt of such information or on his own motion, pass orders directing the sale of goods referred to in sub-rule (1), after giving due notice to the owner under relevant provisions of the Act, by public auction either departmentally or through an auctioneer and shall cause the reserved price of the goods to be auctioned to be determined in accordance with the provisions of section 25 of the Act, and any duties or taxes which would have been payable under clause (c) of sub-section (2) of that section on the date of fixation of the reserve price of such goods for auction thereof shall be added to this value:

Provided that where the condition of the goods has, for any reason, deteriorated, the reserve price shall be the value as is re-appraised by the appraising authorities of the Customs Department and approved by the Deputy Collector or the Assistant Collector. The reserve price shall consist of the appraised price, duties and taxes and other charges.

(3) The following goods shall not be put to auction and be sold or disposed off in the manner as prescribed by the Board, namely:

(i)

arms and ammunition;

(ii)

liquor/narcotics and like goods;

(iii) confiscated books, written material which is obscene, subversive, anti-state or anti-religion;

(iv)

transit goods excluding confiscated goods; and

(v)

diplomatic cargo excluding confiscated goods.

(4) No goods shall be withheld from auction unless,-

(i)

a court of law issues a specified stay order against such auction;

(ii)

the Collector of Customs or the Additional Collector of Customs incharge of auctions orders withholding such auction; or

(iii) the Deputy Collector or the Assistant Collector incharge of auctions orders withholding of such auction, for reasons to be recorded in writing.

1. Value of goods which may be auctioned.-All goods, the aggregate appraised value or the reserve price of which does not exceed one million rupees, may be sold by public auction conducted departmentally at the discretion of the Collector, and all goods, the aggregate appraised value or the reserve price of which exceeds one million rupees, shall be sold by public auction through an auctioneer:
2. Provided that perishable goods may be sold by the Collector through public auction or a private offer irrespective of its value.
1. Nomination of auctioneer.- The Collector or an officer authorized by him in this behalf shall, by writing under his hand, nominate an auctioneer from amongst the registered auctioneers to conduct auction in respect of the goods referred to in rule 58 and shall give him notice of not less than fifteen days in advance of the place at which and the date on which auction of such goods shall be held.

61. Duties of nominated auctioneer.- The auctioneer nominated under rule 60 shall ,-

(a)

make or cause to be made under his supervision and in the presence of an officer authorized by the Collector a detailed inventory schedule of all the goods to be auctioned; and

(b)

notify the following by giving an advertisement in the classified columns of one English and one Urdu daily at least seven days in advance of the date of auction, specifying,-

(i)

the date, time and place of auction in block letters; and

(ii)

the general description of goods to be auctioned:

Provided that no advertisement or public notice in newspapers shall be required in respect of left over of any schedule or goods already notified which may be put to re-auction on display of notice on Notice Board at least two days before the date of auction of such goods;

(c)

send a complete inventory or schedule of such goods to all Chambers of Commerce and Industry and to other Associations of importers/traders in that area; and

(d)

display such goods or samples thereof at a place or places and in the manner acceptable to the Collector.

(2) All expenses incurred on publicity, preparation of files, schedule of auction and its distribution, display of goods and issuance of delivery orders on final acceptance of a bid or private offer by the competent authority shall be borne by the auctioneer.

62. Commission to which auctioneer shall be entitled.- (1) The auctioneer shall be entitled to a commission on the net proceeds at the rate of ---

(a)

on the first one million rupees, one per cent of the proceeds; and

(b)

on the amount exceeding one million rupees, half per cent of the proceeds so exceeding:

Provided that the auctioneer shall not be entitled to any commission on any guarantee or earnest money forfeited for non-payment of the balance of the amount of a bid by the successful bidder or on auction through departmental procedures or private offer or on the differential of auction proceeds enhanced by the bidder through the efforts of any officer of the department or as a consequence of rebidding by the competent officer.

(2) The cost of advertisement, sales or delivery of goods, etc., may be deducted from the payable commission by the authorized officer in case of failure of the auctioneer to discharge his functions satisfactorily.

1. Goods may be auctioned in lots.-All goods may be put to bid in convenient lots so as to obtain the highest possible bid:
2. Provided that the Collector or an officer authorized by him in this behalf may order auction of the goods in combination of various lots or otherwise.
1. Qualification for bidder/tender.-A person can participate in the auction by way of open bid/tender/private offer/rebidding if he:
1. holds a valid National Identity Card/Company registration certificate and submits a copy thereof;
2. has not been disqualified by the competent authority to participate in auction; and
3. observes the discipline and obeys this chapter .
1. Auction to be conducted by or under supervision of auctioneer.-An auction shall be conducted by the auctioneer personally or, under his direct supervision, by one of the members of his staff or, with the prior permission of the Collector in writing, by any other person appointed by the auctioneer in this behalf, in the presence of a Deputy Collector or an Assistant Collector, or any other officer appointed by the Collector for this purpose as per following procedure, namely:
1. Before the start of bidding the Auctioneer shall announce the lot number/combination of various lot numbers and the details of the goods. The auctioneer must also describe the procedure and rules prior to the start of auction;
2. all auctions shall be on "As is where is" basis. All kind of goods shall be sold as lot or on weight basis. However, all kinds of scrap, metal, rubber/plastic, paper, chemicals, betel nuts, bidi leaves, etc., shall invariably be auctioned and sold on WEIGHT BASIS. In all cases

where the goods are sold on WEIGHT BASIS the weight shall be metric tonne or per kilogram; and

(iii) in case of goods auctioned on lot basis the approximate weight and the number of packages shall also be mentioned to facilitate identification and delivery of lots/goods. However, excess weight other than mentioned in the assessment sheet shall not be delivered except on payment of the differential amount so worked out.

66. Manner of Auction.-The auction shall be conducted in the following manner, namely:-

(i)

The first bid shall not be less than 30% of the reserve price notified before or at the time of auction; and

(ii)

the bid amounts and the names of the highest and second highest bidders shall be recorded in the file by the Customs staff supervising the auction alongwith its copies of National Identity Card as well as N.T.N. of the successful bidder; and

1. Earnest money payable.- Twenty-five per cent of the amount of the highest bid given at an auction shall be payable by the bidder in each case as earnest money immediately after the fall of the hammer failing which the bid will be cancelled and the goods may be sold to the second highest bidder or the higher offer or re-auctioned, as deemed appropriate.
2. Amount of bid to be paid in office.- The balance of the amount of bid shall be paid by the successful bidder in cash or through bank draft in the National Bank/Treasury as prescribed by the Collector, within a period of seven days excluding holidays, of the final acceptance of the bid:

Provided that an officer not below the rank of Additional Collector may extend the period by not more than seven days, on case to case basis if he considers it to be fit and appropriate:

“Provided further that Collector of Customs may extend the period already extended by the Additional Collector, up to fifteen days on case to case basis if he considers it to be fit and appropriate.

1. Earnest money to be forfeited.- If the balance of the amount of the bid is not paid within the period or extended period specified in rule 68, the earnest money shall be forfeited in favour of the Federal Government, and the goods may be sold by auction or otherwise.
2. Auction through tender or offer.- The bidder or offerer as defined in rule 49, may participate in auction by way of submission of sealed tender/private offer indicating the lot number and enclosing a pay order equal to at least twenty-five per cent of the bid/private offer, in the name of Collector of Customs. The sealed tender/private offer may be opened by the competent authority in presence of the successful bidder in the open auction. This tender/private offer may be accepted by the competent authority if the private offer is higher than the final bid amount in open auction.
3. Auction of perishable/hazardous goods.- Notwithstanding the provisions of this chapter , the Deputy Collector or the Assistant Collector (Auction) after obtaining approval of the Collector may sell the perishable/hazardous goods through private offers or open auction at any time on the request of the person under whose possession/control these goods are lying. The approval of sale/bid in such cases shall invariably be obtained from the Collector.
4. Auctioneer to issue delivery order.-(1) The auctioneer shall on receipt of a certificate issued by the Collector or an officer authorized by him in this behalf to the effect that the whole amount of the bid has been realized, issue under his seal a delivery order giving the name and address of the successful bidder, serial number of general Index Register No. 11. Identity Card Number and N.T.N. of the bidder, the date and place of the auction, the number of the lot, full description and quantity of the goods in respect of which bid was accepted and the price at which such goods were sold.

(2) The successful bidder shall present the delivery order issued to him under sub-rule (1) to the person who is the custodian of the goods auctioned and that person shall give delivery of the goods specified in the delivery order against a receipt from the successful bidder under supervision of a customs officer deputed for the purpose. In case of any dispute regarding delivery of the goods, the decision of the competent officer who had accepted the bid offer shall be final subject to appeal as prescribed under the relevant provisions of the Act.

73. Acceptance of bid.-(1) A bid given at auction shall be subject to acceptance by the Collector or the Additional Collector (Incharge Auction) or Deputy Collector/Assistant Collection (Auction), as the case may be, but the bidder shall have no right to withdraw his bid without the permission of the officer supervising the auction.

(2)

Where the amount of the highest bid given at an auction is upto eighty per cent of the reserve price, the Deputy Collector/Assistant Collector (Auction) may accept the highest bid after satisfying that the reserve price and the quantity/condition of goods are appropriate.

(3)

Where the amount of the highest bid given at an auction is upto sixty per cent but less than eighty percent of the reserve price, the orders of the Additional Collector shall be specifically obtained.

(4)

In case where the amount of the highest bid is less than sixty per cent of the reserve price the orders of the Collector shall be specifically obtained:

Provided that such orders shall be passed within ten days of the date of receipt of twenty-five per cent of the bid amount as earnest money or in such extended period as required in certain cases where an inquiry or test is involved.

74. Refund of adjustments.- (1) The amount of the earnest money shall be adjusted towards the final payment of the whole amount of the bid, but where a bid is not accepted by the appropriate authority, the amount of the earnest money shall be refunded to the bidder.

(2) The balance amount in case of less weight than the announced weight shall be refunded to the bidder on application after completion of delivery provided the goods had been auctioned on weight measurement basis i.e. per tonne/kg/liter/meter, etc.

75. Power of Collector to cancel auction, etc.- (1) Notwithstanding any thing contained in this chapter , the Collector may --

(i)

cancel the whole proceeding of an auction without assigning any reason;

(ii)

accept or reject any bid or offer or auction at any time before the goods are delivered to the successful bidder/private offerer. He may also recall the proceedings and recover the goods even after delivery of goods if it is proved that there has been a deliberate attempt to cause loss to the public exchequer; and

(iii) restrict or refuse the entry of persons to the premises where an auction is held or their taking part in the auction.

(2) Notwithstanding the procedures prescribed above, the Collector may issue such general or special orders, regulating the auction as he thinks fit in order to safeguard the public interest.

SCHEDULE

( See rule 53 )

SURETY BOND

BY THIS BOND I/WE ____________________of____________________(hereinafter called the obligee (s) am/are held and firmly bound/jointly and severally to the President of Pakistan through the Collector of Customs,___________________(hereinafter called the obligor) for the payment to him a sum of Rs. 50,000 (Fifty thousand rupees) as agreed and liquidated damages and not as a penalty;

WHEREAS the obligor has appointed the obligee (s) as Customs Auctioneer(s) under and for the purposes of the Customs Rules 2001, upon the condition that the obligee (s) should enter into a surety bond for the payment to the obligor of sum of Rs. 50,000 (Fifty thousand rupees) as liquidated damages and not as a penalty conditioned as hereinafter provided;

NOW THE CONDITION of the above surety bond is that if the obligee (s) and his/their executor or administrator at all times during the continuance of his/their appointment as Customs Auctioneer (s) under and for the purposes of Customs Rules 2001, perform (s) his/their duties faithfully, diligently and in an incorrupt manner in relation to any auction conducted by him/them in accordance with the said rules and orders, instructions or directions that may from time to time be given to him/them by the appropriate authorities in this behalf, and makes goods without any delay to the obligor all and every sum of money which becomes due to the Government the above surety bond shall be void, but otherwise the same shall remain in full effect.

IN WITHNESS WHEREOF the parties named above have set and subscribed their hand hereunder together with their respective seals in the presence of the witness named below, this _________the day of _________20______.

Signature, name and address of witness Signature, name and address and seal of the auctioneer

Signature, name and address of witness Signature, name and address and seal of the Collector.

PROFORMA OF BANK GUARANTEE TO BE SUBMITTED BY THE AUCTIONEERS UNDER THIS CHAPTER.

WHEREAS the Collector of Customs ______________has consented to register M/s ______________as auctioneers for five years with effect from _________. This bank guarantee is furnished for working as auctioneer to the satisfaction of the Collector of Customs as per provisions of the subject rules.

In case M/s ____________________fails to discharge his duties to the satisfaction of Collector of Customs_______________M/s-_______(name of the bank) hereby undertakes to make the payment of Rs. 1,00,000 (one lac) on demand by Collector of Customs_______________ or any officer authorized by the Collector of Customs on this behalf, without objection or reservation or any reference to any other person/body within 7 days of the isuance of the demand.

In case of M/s ______________(name of the bank) fails to make the payment within 7 days of the said demand M/s ______________ (name of the bank) shall be liable to pay compensation at the rate of 20 per cent per annum for the period from the date of expiry of 7 days of the date when actual payment is made in the Collector of Custom's_________account. This bank guarantee is valid until _________. However all claims lodged hereunder will be entertained/accepted by M/s. ________(name of the bank) 12 months after the aforesaid validity date.

CHAPTER VI
TEMPORARY IMPORTATION OF MOTOR VEHICLES

76. Definitions.- In this Chapter unless there is anything repugnant in the subject or context,-

(a)

“expatriate employee” means a foreign national employed in any business undertaking, Government or a Government controlled organization for remuneration;

(b)

“importer” means a persons who imports a vehicle under this chapter;

(c)

“tourist” means a foreigner of any of the following categories who has no residence or occupation in Pakistan and whose stay in the country is not likely to exceed three months, namely:-

(i)

a person visiting Pakistan for recreation or sight-seeing or is in transit for a short duration;

(ii)

a person travelling for domestic or health reasons;

(iii) a person on study or lecture tour or on pilgrimage;

(iv)

a person travelling in his individual or representative capacity to attend a meeting or function of any scientific, administrative, educational, social, cultural sports or religious nature or for giving a performance;

(v)

a person travelling for business purposes;

(vi)

a person arriving in the course of a sea cruise whose stay in Pakistan exceeds twenty-four hours; and

(d)

“vehicle” means a motor-car, motor-cycle, van, microbus and bus, pick-up, jeep, truck, self-driven caravan and tractor with trailer or semi trailer or caravan.

77. Temporary import of vehicles by tourists, etc.- (1) A tourist who imports a vehicle against carnet-de-passage or a bank guarantee may be given delivery thereof by the officer-in-charge of the Customs-station of entry without payment of customs-duties for its retention in Pakistan for a period of three months if such tourist makes a declaration at the Customs-station of entry to the effect that he will not constructively or substantially transfer the ownership of the vehicles to any other person during his stay in Pakistan:

Provided that if it is not practicable for the tourist to export such vehicle within the said period and he makes an application to the Central Board of Revenue before the expiry of that period to this effect, the Central Board of Revenue may extend that period not exceeding three months:

Provided further that if the same vehicle re-enters Pakistan within one year after its exit, whether in the name of the same tourist (non-Pakistani) or in the name of somebody else (non-Pakistani) temporary release shall not be allowed against carnet-de-passage or a bank guarantee for more than fourteen days except for vehicles operated by recognized foreign tour agencies which shall be allowed re-entry within one year for a period not exceeding three months at one point of time.

(2)

Where the export of such vehicle is not possible on grounds of health of the importer, or in circumstances beyond his control, or because of an accident in which the vehicle is involved, the Central Board of Revenue may extend the period not exceeding six months, in which case a fresh bank guarantee shall be furnished if the existing bank guarantee does not cover the period of extension:

Provided that if the importer wishes to retain such vehicle beyond period for which permission for retention has been allowed, he shall obtain an import permit from the Ministry of Commerce and shall pay the Customs-duties and taxes leviable thereon on the date of its import.

(3)

If a tourist imports a vehicle for passage through Pakistan to a foreign destination, the officer-in-charge of the Customs-station of entry may, in the absence of carnet-de-passage or a bank guarantee, allow the vehicle to pass through Pakistan without payment of customs duties under escort form the Customs-station of entry to the Customs-station of exit on payment of escort charges to be determined by the respective

Collector. The particulars of the vehicle so allowed to pass through Pakistan shall be endorsed on the passport of the importer.

1. Temporary Import if vehicle by Afghan citizen.-No citizen of Afghanistan shall import a vehicle into Pakistan on road pass, but if such person imports a vehicle temporarily he may be given delivery thereof by the officer in-charge of the Customs-station of entry without payment of Customs-duties for its retention in Pakistan for a period of thirty days on recommendation of the Consulate General or Embassy of Pakistan in Afghanistan, based on the lists provided by Director General (Afghanistan) of the Ministry of Foreign Affairs, Government of Pakistan:
2. Provided that if the importer wishes to retain the vehicles in Pakistan for a further period not exceeding three months from the date of expiry of the original period of the one month, he shall, to the satisfaction of the Collector of Customs or the Deputy Collector of Customs, furnish a bank guarantee from a scheduled bank in Pakistan, of an amount not less than the amount of Customs-duties and taxes leviable on such vehicle enforceable for a period of six months or until such period as the vehicle is exported or otherwise accounted for.
1. Expatriate employee not to import vehicle .- No expatriate employee shall be allowed to import a vehicle under this chapter.
2. Period for retention vehicle to be endorsed .- When delivery of a vehicle is given to an importer, and where the period is extended, a stamped endorsement indicating the period for which the vehicle is allowed to be temporarily retained in Pakistan shall be made on the passport of the importer.

FRUSTRATED CARGO

1. Frustrated cargo will be such goods as are brought into a customs-station by reason of inadvertence or mis-direction or where the consignee is untraceable or has dishonored his commitments and the consignor wishes to have it re-shipped to him.
2. The master of the vessel or his authorized agent or the consignor of the goods himself or through his authorized agent shall apply in writing or electronically where Pakistan Customs Computerized System (PACCS) is operational to the Collector of Customs concerned for permission to re-export the frustrated cargo.
3. On receipt of an application, the Collector of Customs shall satisfy himself with reference to the relevant import manifests and other documents that the goods are ‘frustrated cargo‘ as provided in section 138 of the Act.
4. If the Collector is so satisfied, he would permit re-export of the frustrated cargo under Customs supervision without payment of duties (whether of import or export) chargeable thereon.

^41&46[CHAPTER VIII

CUSTOMS AGENTS LICENSING

90. Definitions.- In this chapter, unless there is anything repugnant in the subject or context,-

(a)

“customs Agent” means a person granted a customs agent licence by the licensing authority to carry out customs business under these rules;

(b)

“customs business” means activities involving transactions with the Customs department concerning the entrance or clearance of any conveyance in a Customs Station or Area or Port or any customs related clearance activities or importation or exportation of goods or baggage, including their classification and valuation, the payment of duties, taxes, or other charges assessed or collected by the Customs on goods by reason of its importation, exportation, transit or transshipment or refund, rebate, or drawback thereof and includes the preparation of documents or forms in any format and the electronic transmission of documents, invoices, bills, or parts thereof, intended to be filed with the Customs in furtherance of such activities or any other activity relating to the Customs Act, 1969 (IV of 1969) or rules made thereunder;

(c)

“Form” means a form appended to this chapter;

(d)

“licence” means a licence granted under this Chapter to act as a Customs Agent;

(e)

“licensee” means a person to whom a Customs Agent licence has been granted under this chapter; and

(f)

“licensing Authority” means the Collector of Customs or any officer not below the rank of Assistant Collector authorized by Collector to act as licensing authority under this Chapter.

91. Application.-An applicant may submit an application in form “A” along with the following documents to the licensing authority with a treasury challan for two thousand rupees as application processing fee which shall be non-refundable, namely:-

(a)

NTN Certificate;

(b)

tenancy agreement or ownership documents in respect of business address;

(c)

copy of CNIC (verification of CNIC shall be got conducted by the Collectorate from NADRA);

(d)

photographs (4 x Passport Size).

92. Eligibility to file application.- A candidate is eligible to file application with the licensing authority if he is,-

(a)

a citizen of Pakistan;

(b)

not below 21 years of age;

(c)

a graduate from a recognized university;

(This condition of minimum qualification shall be applicable for licenses which are issued after coming in to force of these rules)

(d)

having adequate knowledge of computer to handle the goods declaration (GD) in PRAL or PACCS etc;

(e)

not convicted by any court of law.

93. Qualification test.- (1) The licensing Authority on receipt of the application shall forward the name alongwith particulars to the office of Directorate General of Training and Research or any other independent educational institution nominated by Board, as the case may be, for including the name of intending person as candidate for a written examination with a view to ascertain his knowledge about English language, computers and the Customs Law and Procedure. This examination shall be conducted simultaneously at Karachi, Lahore and Islamabad twice a year in July and January:

Provided that if the applicant is a retired BS-14 or above officer of Customs having more than ten years service and subject to condition that he has not been removed from the service on disciplinary grounds, he may be exempted by the collector from the above mentioned test on case to case basis after conducting his interview.

(2) The Licensing Authority shall not consider an application for the grant of licence if the applicant fails to secure at least fifty per cent marks in the written examination.

94. Approval of licence.- On qualifying the test, the licensing Authority shall issue approval letter in form “B” for issuance of licence subject to the following, namely:-

(a)

deposit as security in the shape of defense saving certificate for rupees three hundred thousand only for operating in one customs station and rupees seven hundred thousand only, for operating on a country wide basis, in the shape of Defence Saving Certificates pledged to the Collector of Customs; and

(b)

execute a bond in Form “C” for ensuring good conduct and to follow custom rules and regulations and for recovery of any amount adjudged against him or ordered to be paid by him.

95. Licence and its conditions.- (1) The Licensing Authority may, on fulfilling all the conditions under these rules, grant a non-transferable licence in form “D” for a period initially for two years which shall be renewable after every two years subject to the prescribed conditions.

(2)

The license shall neither be transferable nor can be sub-let and no licensee shall, except with the prior approval of the licensing Authority, bring about a change in the composition of the company, proprietorship or firm, as the case may be.

(3)

Change of status of firm from proprietorship to partnership shall be allowed on submission of partnership deed duly attested by notary public and on successful passing of interview to be conducted by the licensing authority or any officer authorized in this behalf.

(4)

Retirement of partner shall be allowed on submission of an additional undertaking that the existing partner may take the responsibility of all previous and future act of the company and shall be responsible for payment of any outstanding government dues accrued on the company before and after retirement of the partner.

(5)

Dissolution of partnership shall be allowed on submission of dissolution deed and an under taking that the person continuing the firm shall be responsible for the payment of all or any outstanding government dues accrued in the name and title of the firm.

(6)

Change of directorship in case of a company shall only be allowed if duly approved by the Security Exchange Commission of Pakistan.

(7)

The licensee shall provide sales tax registration number before commencing of his business after getting the license.

(8)

In the case of the death of an individual licensee, the license may be re-issued to his legal heir if he fulfills the criteria prescribed in rules 92, 93 and 94. The new licensee shall execute a fresh bond for the purpose however the licensing Authority may allow the transfer of the security deposit held in the name of the deceased licensee to the name of new licensee, subject to the liabilities attached to such deposit.

(9)

The licensing Authority may, in anticipation of the passing of test or training and examination, as the case may be, grant a provisional license for a maximum period of six months or till such time a fresh examination is conducted on fulfilling conditions laid down in rules 92 and 95.

(10)

A license shall be valid for one or all Collectorates, as the case may be, for a period of two years, which shall be renewable after every two years unless revoked earlier in accordance with the provisions of this Chapter.

(11)

In case the licence or a custom permit is lost or damaged, a duplicate copy thereof may be issued on a written request by the licensee, duly supported by the documentary evidence and on payment of fee of five thousand rupees.

96. Renewal of Licence.-(1) An application for the renewal of the licence shall be made to the licensing Authority, two months before its expiry alongwith the following documents, namely:-

(a)

an affidavit to the effect that no case of tax fraud and criminal case has been finalized from the court of law or tribunal against the licensee or any of the partners, as the case may be;

(b)

information about total number of declarations filed showing declarations of imports and exports separately and detail of cases made out against him;

(c)

proof of payment of renewal fee which shall be rupees two thousand for renewal of license for two years; and

(d)

certificate of participation (for each year) in mandatory course from Directorate-General of Training and Research (Custom, Sales Tax and Federal Excise ).

(2) The licensing Authority may refuse to renew the licence if it finds that,-

(a)

the licensee has failed to apply for renewal of licence within the prescribed time; or

(d)

the licensee’s previous performance has not been satisfactory; or

(e)

the licensee had violated any applicable law or acted in a dishonest manner; or

(f)

the previous record of business showed involvement of licensee in any of the offences mention in the Act; or

(g)

the licence has been revoked under these rules; or

(h)

the licensee, in the previous period of validity of licence, has failed to file sufficient number of declarations and conduct customs business, as prescribed by the Collector.

97. Authorization to sign the documents on behalf of licensee.-(1) A licensee may authorize not more than three permit holders to sign Customs documents on his behalf.

(2) Such authorization shall be in Form "E" and shall be valid only when accepted by the licensing Authority or an officer authorized on his behalf.

98. Issuance of permits.- (1) The licensee shall apply to the licensing Authority in Form "F" for the grant of Customs permit to such clerks as he employs for conducting business at the Custom House, Customs Station, Port or Airport.

(2)

Such applications shall bear a court-fee stamp, of the value of fifty rupees and shall be accompanied by three passport size photograph of the clerks whose permits are applied for and such employee has passed at least higher secondary school certificate (intermediate) examination and holds valid CNIC.

(3)

A customs permit shall not be transferable and shall be valid for the person for whom it is issued.

(4)

A Customs permit shall be issued on form “G” and shall be valid for one year unless suspended or earlier revoked in accordance with these rules.

(5)

The licensee shall apply for the renewal of the Customs permit of his clerk at least one month before the expiry of the permit.

(6)

The licensee shall inform the licensing Authority immediately in case the services of any permit holder are terminated and surrender the Customs permit to the licensing Authority for cancellation.

(7)

A customs permit shall be liable to be revoked or suspended at any time by the licensing Authority for any irregularity, misbehavior or for any other reason for which a licence may be revoked or suspended.

(8)

The customs permit shall always be carried by the person to whom it has been issued and shall be produced before appropriate officer of Customs on demand.

(9)

The licensee shall be responsible for all acts of his authorized representative or any person holding a customs permit on his behalf.

1. Customs agent to attend course.- All customs Agents licensed under these rules shall attend once in each financial year a mandatory Custom Agents Course of six days from the Directorate-General of Training and Research (Custom, Sales Tax and Federal Excise to be conducted in batches at Karachi, Lahore and Islamabad). A fee of rupees two thousand may be charged by the Directorate General as fee of course. The curriculum of the course shall be prescribed by the Directorate-General of Training and Research (Custom, Sales Tax and Federal Excise).
2. Maintenance of records.-(1) Each licensee shall maintain, and preserve, complete records of its financial transactions and of all customs documents handled by it and copies of all correspondence, bills accounts, statements and other papers relating to the customs business for a period specified under section 211 of the Act.

(2) The records specified in sub-rule (1) above shall be made available for examination at any time to any officer of customs or sales tax authorized or deputed by the licensing authority under the Act or the rules made there under and no licensee shall refuse access to or taking extracts from the record nor shall conceal, remove or destroy any part of the record.

FORM ‘A’

[See rule 91]

APPLICATION FORM FOR CUSTOMS AGENTS LICENCE UNDER CUSTOMS RULES, 2001

Photograph of the owner / MD

To

Collector/The Licensing Authority, Model Customs Collectorate, …………………………….

I/We ………………………….. hereby apply for the grant of a Customs Agents Licence to act as customs agent to carryout customs business under the customs Rules, the particulars of the applicant are given below:-

1. Full name of the applicant.
2. Nationality
3. Address and location.
4. CNIC No.
5. Nature of enterprise, private individual, partnership concern, private limited or a limited company.
6. Name of Persons who would be in-charge of work relating to this licence in case of company. 466
7. Educational qualification of applicant.
8. Details of business experience.
9. Details of experience of Custom clearance work.
10. NTN Number.
11. Sales Tax Registration Number.
12. Name of the Bank account number.
13. Name and designation of employees.

The application fee of Rs.2000/- has been paid in the Treasury vide challan No. _________ dated ___________ which is attached.

I/We hereby declare that the particulars finished in this application are correct and I/We have read the Customs Rules, 2001 and I/We agree to abide by them.

Yours faithfully.

Name of applicant

FORM “B”

[see rule 94]

FORM ‘D’

[see rule 95] Warnings :-Not Transferable.

C.H.A. Licence No. ______________________ for Clearing and Forwarding Conveyances, Goods and Baggage.

Photograph of owner or
MD

CUSTOMS AGENTS LICENCE TO TRANSACT CUSTOM
HOUSE BUSINESS UNDER SECTION 207
OF THE CUSTOMS ACT, 1969

Messers _________________________________ of ___________ _________________________________________________________ have been registered in the books of this Customs House / Customs Station / Customs Port / Customs Airport as Customs Agents. They are authorized to transact business at the ____________________________________ (name of the Custom House / Land Customs Station / Customs Port / Customs Airport) for a period of two years.

Signature of Licensing Authority. Dated :________________ Full Address:________________

__________________________ .

RENEWAL

F O R M ‘E’

[see Rule 97(2)]

FORM OF AUTHORIZATION TO SIGN CUSTOMS DOCUMENTS ETC

From Mr./ Messrs ________ ___________________ ___________________ To The Licensing Authority ___________________ ___________________ Sir,

I/We ____________________ owner / MD of Messers ______________ have the honor to inform you that I/we have authorized the following assistants, clerks or representatives, clearing agents of _______ to transact Custom business and to sign all the documents related with such business under the licensing rules.

Four specimen signatures of each of these persons are also enclosed for records.

I/We undertake to acknowledge these signatures as if they were those of the firm for all purposes in connection with the aforesaid transactions and to accept any liabilities incurred under the said transactions as if they had in fact been signed by me/our firm.

Application Fee Rs.100 deposition in National Bank of Pakistan through treasury challan (enclosed).

I/We have the honour to be

Sir,

Your most obedient servant/servants

1. Mr. ________________________ will sign _______________________
2. Mr. ________________________ will sign _______________________
3. Mr. ________________________ will sign _______________________
4. Mr. ________________________ will sign _______________________
5. Mr. ________________________ will sign _______________________

FORM ‘F’

[see Rule 98 (1)]

APPLICATION FOR CUSTOMS PERMIT FOR THE EMPLOYEE OF A CUSTOMS AGENT TO
TRANSACT CUSTOM HOUSE BUSINESS

To The Licensing Authority ___________________ ___________________ Sir,

I/We ____________________ do hereby authorize Mr. ______________ whose particulars are given below to transact Custom House business on my / our behalf and I/We accept all responsibility for his act as if they were my / our own.

Particulars of the employee:-

1. Full Name ________________________ son of ______________________
2. Age ________________________________________________________
3. CNIC No. ___________________________________________________
4. Residential address ____________________________________________
5. Educational qualification _________________________________________
6. Knowledge of various languages (English, Urdu, or any other local language)
7. Serving in the firm as __________________________________________
8. Period of Service ______________________________________________
9. Experience in Customs work _____________________________________
10. No. of previous Identity Card, / Customs Permit if held ________________
11. Whether at any time convicted by a Court ____________________________
12. Whether at any time Identity Card/Customs Permit was refused by the Customs if so When
13. Details of past service if any _________________________________________
14. Reasons for leaving the last firm ______________________________________
15. _________________________ (copies of testimonials and certificates enclosed).
16. Signature of the employee __________________________________________

Yours faithfully,

(Name of the licensee) N.B:- This application should be accompanied by three passport size Photograph of the employee.

NIC No. _____________________________________________________

Pass No. _____________________________________________________

Specimen Signature ____________________________________________

*

Only valid if displayed.

*

Valid during working hours to transact business as Customs.

*

Agent / authorized representative.

*

Liable to cancellation if misused.

*

Duplicate copy is not valid.

CHAPTER IX

VALUATION

SUB-CHAPTER-I

(PRELIMINARY)

107. Definitions.- In this Chapter, unless there is anything repugnant in the subject or context,-

(a)

“at or about the same time” means within ninety days prior to the importation or within ninety days after the importation of goods being valued;

(b)

“buying commissions” means fee paid and declared in the bill of entry by an importer to his agent for the service of representing the importer abroad in the purchase of the goods being valued;

(c)

“commercial level” means the level of the transaction at which a sale is concluded and includes the sales before and after importation of the goods for example, sales conducted between a manufacturer and a wholeseller, or between a wholeseller and a retailer, or between a retailer and a customer;

(c)

“family” means a group of persons related to each other by marriage, blood or law or adoption and includes all descendants of a common progenitor;

(d)

“general expenses” includes direct and indirect costs of marketing the goods after importation;

(f)

“produced” includes goods grown, manufactured and mined; and

SUB-CHAPTER II

GENERAL

108. Declaration by the importer.-The importer, or his agent, shall furnish --

(a)

a declaration disclosing full and accurate details relating to the value of imported goods; and

(b)

any other statement, information or document as considered necessary by the appropriate officer for determination of the value of imported goods under the Act and this chapter.

109. Burden of proof.- (1) Where the appropriate officer has reason to doubt the truth or accuracy of the particulars or of documents produced in support of the declaration, such officer may ask the importer to provide further explanation, including documents or other evidence.

(2)

If, after receiving information referred to in sub rule (1) or in the absence of a response, the appropriate officer still has reasonable doubts about the truth or accuracy of the declared value, it may be deemed that the customs value of the imported goods cannot be determined under the provisions of sub-section

(1)

of section 25 of the Act.

(3)

When a final decision is made, the appropriate officer shall communicate to the importer in writing his decision and the grounds therefore.

110. Prohibited methods.-Where the value of imported goods cannot be determined under subsection (1), (5), (6), (7) and (8) of section 25 of the Act, the customs value shall be determined on the basis of data of imports available with the Customs Department. However no value shall be determined under this chapter on the basis of --

calling in question, the right of the appropriate officer to satisfy himself as to the truth or accuracy of any statement, information, document or declaration presented for valuation purposes by or on behalf of the importer under the Act and rules made thereunder.

112. Rights of importer.-(1) Whenever the appropriate officer is unable to accept the transaction value without further inquiry, he shall give the importer an opportunity to supply such further detailed information as may be necessary to enable him to examine the circumstances surrounding the sale. In this context, the appropriate officer of customs shall examine relevant aspects of the transaction, including the way in which the buyer and seller organize their commercial relations and the way in which the price in question was arrived at, in order to determine whether the relationship influenced the price. Where it can be shown that the buyer and seller, although “related persons” as defined under clause (g) of rule 2 of chapter- I, buy from and sell to each other as if they were not related, this would demonstrate that the price had been settled in a manner consistent with the normal pricing practice of the concerned industry or with the way the seller settles prices for sales to buyers who are not related to him, this would demonstrate that the price has not been influenced by the relationship.

(2) Where it is shown that the price is adequate to ensure recovery of all costs plus a profit which is representative of the firm's overall profit realized over a representative period of time, for example, on an annual basis, in sales of goods of the same class or kind, this would demonstrate that the price had not been influenced.

SUB-CHAPTER III

PRIMARY METHOD OF VALUATION

113. Price actually paid or payable.- (1) The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. The payment need not necessarily take the form of a transfer of money. It may be made by way of letter of credit or negotiable instruments, or by cash or credit or partly by cash and partly by credit and may be made directly or indirectly. As example of an indirect payment would be the settlement by the buyer, whether in whole or in part, of a debt owned by the seller.

(2)

Activities undertaken by the buyer on his own account, other than those for which an adjustment is provided in sub-section (2) of section 25 of the Act are not considered to be an indirect payment to the seller, even though they might be regarded as of benefit to the seller. The costs of such activities shall not, therefore, be added to the price actually paid or payable in determining the value of imported goods.

(3)

The customs value of imported goods shall not include the following charges or costs, provided that they are distinguished from the price actually paid or payable for the imported goods, namely:

(i)

charges for construction, erection, assembly, maintenance or technical assistance undertaken after importation of goods such as industrial plant, machinery or equipment;

(ii)

the cost of transport after importation; and

(iii) duties and taxes in Pakistan.

(4)

The price actually paid or payable refers to the price of the imported goods. Thus the flow of dividends or other payments from the buyer to the seller, which do not relate to the imported goods,, shall not be part of the customs value.

1. Restrictions which do not affect value.- Among restrictions which would not render a price actually paid or payable unacceptable are restrictions which do not substantially affect the value of the goods. An example of such restrictions would be the case where a seller requires a buyer of automobiles not to sell or exhibit them prior to a fixed date which represents the beginning of a model year.
1. Restrictions which affect value.- If the sale or price is subject to some conditions or considerations for which a value cannot be determined with respect to the goods being valued, the transaction value shall not be acceptable for customs purposes. For examples:-
1. the seller establishes the price of the imported goods on condition that the buyer will also buy other goods in specified quantities;
2. the price of the imported goods is dependent upon the price, or prices, at which the buyer of the imported goods sells other goods to the seller of the imported goods; or
3. the price is established on the basis of a form of payment extraneous to the imported goods, such as where the imported goods are semi-finished goods which have been provided by the seller on condition that he will receive a specified quantity of the finished goods.

Explanation.- Conditions or considerations relating to the production or marketing of the imported goods shall not result in rejection of the transaction value. For example, the fact that the buyer furnishes the seller with engineering and plans undertaken in Pakistan shall not result in rejection of the transaction value. Likewise, if the buyer undertakes on his own account, even though by agreement with the seller, activities relating to the marketing of the imported goods, the value of these activities shall not be part of the value of imported goods nor shall such activities result in rejection of the transaction value.

116. Transaction value acceptable in case of related parties.- Where the buyer and seller are related, circumstances surrounding the sale shall be examined and the transaction value shall be accepted as the customs value of imported goods provided that the relationship did not influence the price. Where the appropriate officer has no doubts about the acceptability of the price, it may be accepted without requesting further information from the importer. For example, the appropriate officer may have previously examined the relationship, or he may already have detailed information concerning the buyer and the seller, and may already be satisfied from such examination or information that the relationship did not influence the price.

SUB-CHAPTER IV

SECONDARY METHODS OF VALUATION

117. Transaction value of identical goods.- (1) In applying sub-section (5) of section 25 of the Act, the appropriate officer shall, wherever possible use a sale of identical goods at the same commercial level and in substantially the same quantities as the goods being valued. Where no such sale is found, a sale of identical goods that takes place under any one of the following conditions may be used, namely:

(i)

a sale at the same commercial level but in different quantities;

474

(ii)

a sale at different commercial level but in substantially the same quantities; or

(iii) a sale at a different commercial level and in different quantities.

(2)

Having found a sale under any one of the conditions referred to in sub-rule (1), adjustments shall then be made, as the case may be, for the following, namely:-

(i)

quantity factors only;

(ii)

commercial level factors only; or

(iii) both commercial level and quantity factors.

(3)

For the purposes of sub-section (5) of section 25 of the Act, the transaction value of identical imported goods means a value, adjusted as provided for in clauses (a), (b) and (c) of sub-section (5) of that section, which has already been accepted under sub-section (1) of the said section 25.

(4)

A condition for adjustment because of different commercial levels or different quantities shall be that such adjustment, whether it leads to an increase or a decrease in the value, be made only on the basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustment, e.g., valid price lists containing prices referring to different levels or different quantities. As an example of this, if the imported goods being valued consist of a shipment of ten units and the only identical goods for which a transaction value exists involved a sale of five hundred units, and it is recognized that the seller grants quantity discounts, the required adjustment may be accomplished by resorting to the seller's price list and using that price applicable to a sale of ten units. This does not require that a sale had to have been made in quantities of ten as long as the price list has been established as being bona fide through sales at other quantities.

118. Transaction value of similar goods.-(1) In applying sub-section (6) of section 25 of the Act the appropriate officer shall, wherever possible, use a sale of similar goods at the same commercial level and in substantially the same quantities as the goods big valued. For the purposes of sub-section (6) of the said section the transaction value of similar imported goods means the value of imported goods, adjusted as provided for in sub-section (2) thereof which has already been accepted under sub-section (1) of that section.

(2) The provisions of Rule-117 shall, mutatis mutandis, also apply in respect of similar goods.

119. Deductive value method.- (1) For the purposes of this rule, the expression "unit price at which goods are sold in the greatest aggregate quantity" means the price at which the greatest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at the first commercial level after importation at which such sale takes place.

Explanation.- (i) When goods are sold on the basis of a printed or advertised price list which grants favourable unit prices for purchase made in larger quantities, the unit price at which goods are sold in the greatest aggregate quantity shall be ascertained as per the following example:-

Note.-(i) In this example, the greatest number of units sold at a price is eighty, therefore, the unit price in the greatest aggregate quantity is ninety.

(ii) In case when there are two separate sales. For example, in the first sale five hundred units are sold at a price of ninety five currency units each. In the second sale four hundred units are sold at a price of ninety currency units each. In this example, as the greatest number of units sold at a particular price is five hundred, therefore, the unit price of the greatest aggregate quantity shall be ninety-five.

(iii) In case where various quantities are sold at various prices. For example:-

(1) Sales:
Sales Quantity Unit Price.

(1) (2) 40 units 100 30 units 90 15 units 100 50 units 95 25 units 105 35 units 90 05 units 100

Total quantity sold. Unit price.

Note. In this example, the greatest number of units sold at a particular price is sixty-five, therefore, the unit price in this greatest quantity is ninety.

(2)

Any sale in Pakistan, as provide in sub-rule (1), to a person who supplies directly or indirectly free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods any of the elements specified in clause (c) of sub-rule (2) of section 25 of the Act shall not be taken into account in establishing the unit price for the purposes of sub-section (7) of section 25 of the Act.

(3) For the purposes of the rules, the phrase "profit and general expenses" as used in sub-clause

(i)

of Clause (a) of sub-section (7) of section 25 of the Act, shall be taken as a whole for the purpose of determination of value. The figure for the purposes of this deduction shall be determined on the basis of information supplied by or on behalf of, the importer unless his figures are inconsistent with those obtained in sales in Pakistan, of the same class or kind of goods. Where the importer's figures are inconsistent with such figures, the amount for profit and general expenses may be based upon relevant information other than that supplied by, or on behalf of, the importer.

(4)

Local taxes payable by reason of the sale of the goods for which a deduction is not made under sub-clause (iv) of clause (a) of sub-section (7) of section 25 of the Act shall be deducted under sub-clause (i) of clause (a) of that sub-section.

(5) In determining either the commissions of the usual profits and general expenses under clause

(a)

of sub-section (7) of section 25 of the Act, the question whether certain goods are "of the same class or kind" as other goods must be determined on case to cases basis by reference to the circumstances involved. Sales in Pakistan of the narrowest group or range of imported goods of the same class or kind, which includes the goods being valued, for which necessary information can be provided, should be examined. For the

purposes of sub-section (7) of section 25 of the Act" goods of the same class or kind includes goods imported from the same country as the goods being valued as well as goods imported from other countries.

(6)

For the purpose of clause (b) of sub-section (7) of section 25 of the Act, the "earliest date" shall be the date by which sales of the imported goods or of identical or similar goods are made in sufficient quantity at the established unit price.

(7)

Wherever the method of Valuation provided in clause (c) of sub-section (7) of section 25 of the Act is used, deductions made for the value added by further processing shall be based on objective and quantifiable data relating tot he cost of such work. Accepted industry formulas, recipes, methods of construction, and other industry practices would form the basis of the calculations.

(8)

The method of valuation provided in clause (c) of sub-section (7) of section 25 of the Act shall normally not be applicable when, as a result of the further processing, the imported goods lose their identity. However, there can be instances where, although the identity of the imported goods is lost, the value added by the processing can be determined accurately without reasonable difficulty. On the other hand, there can also be instances where the imported goods maintain their identity but form such a minor element in the goods sold in Pakistan that the use of this valuation method would be unjustified. Accordingly, each situation of this type must be considered on a case to case basis.

120. Computed value method.-(1) As a general rule, customs-value shall be determined under sub-section (8) of section 25 of the Act on the basis of information readily available in Pakistan. In order to determine a computed value, however, it may be necessary to examine the costs of producing the goods being valued and other information which has to be obtained from the country of manufacture.

(2)

For the purposes of this chapter, "cost or value" referred to in clause (a) of sub-section (8) of section 25 of the Act shall be determined on the basis of information relating to the production of the goods being valued supplied by, or on behalf of, the producer. It shall be based on the commercial accounts of the producer, provided that such accounts are consistent with the generally accepted accounting principles applied in the country where the goods are produced. The "cost of value" shall include the cost of elements specified in sub-clauses (ii) and (iii) clause (b) of sub-section (2) of section 25 of the Act. It shall also include the value, apportioned as appropriate under rule 122 of any element specified in clause (c) of sub-section (2) of section 25 of the Act which has been supplied directly or indirectly by the buyer for the use in connection with production of the imported goods. The value of the elements specified in sub-clause (iv) of clause (b) of subsection (2) of section 25 of the Act which are undertaken in Pakistan shall be included only to the extent that such elements are charged to the producer and no cost or value of the elements referred to in this sub-section shall be counted twice in determining the computed value.

(3)

For the purposes of this chapter, the "amount for profit and general expenses" referred to clause (b) of sub-section (8) of section 25 of the Act shall be determined on the basis of information supplied by or on behalf of the producer unless the producer's figures are inconsistent with those usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of manufacture for export to Pakistan.

(4)

For the purposes of this chapter , the "amount for profit and general expenses" referred to in clause (b) of sub-section (8) of section 25 of the Act shall be taken as a whole. If producer's profit figure is low and the producer's general expenses are high, the producer's profit and general expenses, taken together, shall nevertheless be consistent with that usually reflected in sales of goods of the same class or kind. Where the producer can demonstrate a low profit on sales of the imported goods because of particular commercial circumstances, the producer's actual profit figures should be taken into account provided that the producer has valid commercial reasons to justify them and the producer's pricing policy reflects usual pricing policies in the branch of industry concerned. Where the producer's own figures for profit and general expenses are not consistent with those usually reflected in sales of goods of the same class or kind as the goods being valued which are made by the producers in the country of manufacture for export to Pakistan, the amount for profit

and general expenses may be based upon relevant information other than that supplied by, or on behalf of, the producer of the goods.

(5)

Where information other than that supplied by, or on behalf of the producer is used for the purposes of determining a computed value, the appropriate officer shall inform the importer, if the latter so requests, of the source of such information, the data used and the calculation based upon such data, subject to the provisions of rule 124.

(6)

For the purposes of this chapter , the "general expenses" referred to in clause (b) of subsection (8) of section 25 of the Act, include the direct and indirect costs of producing and selling the goods for export which are not included under clause (a) of that sub-section.

(7)

For the purposes of clause (b) of sub-section (8) of section 25 of the Act whether certain goods are "of the same class or kind" as other goods, must be determined on a case to case basis with reference to the circumstances involved. In determining the usual profits and general expenses under subsection (8) of section 25 of the Act sales for export to Pakistan of the narrowest group or range of goods, which includes the goods being valued, for which the necessary information can be provided, shall be examined. For the purposes of sub-section (8) of section 25 "goods of the same class or kind" must be from the same country as the goods being valued.

121. Fall back method.- (1) Value of imported goods determined under sub-section (9) of section 25 of the Act, shall, to the greatest extent possible be based on previously determined customs values of identical goods assessed within ninety days.

(2) The methods of valuation, to be employed under sub-section (9) of section 25 of the Act may be inclusive of those laid down in sub-sections (1), (5), (6), (7) and (8) of the said section, but a reasonable flexibility in the application of such methods would be in conformity with the aims and provisions of subsection (9) of that section.

Explanation.- Some examples of reasonable flexibility are as follows, namely:-

122. Adjustment of value.- (1) For adjustment of value there shall be two factors involved in the apportionment of the elements as specified in clause (c) of sub-section (2) of section 25 of the Act to the imported goods, namely:

(i)

the value of the element itself, and

(ii)

the way in which that value is to be apportioned to the imported goods. The apportionment of these elements shall be made in a reasonable manner appropriate to the circumstances and in accordance with generally accepted accounting principles.

(2) The value of the elements shall be adjusted as follows, namely:-

(i)

if the importer acquired the element from a seller not related to him at a given cost, the value of the element is that cost;

(ii)

if the element was produced by the importer or by a person related to him, its value shall be the cost of producing it; and

(iii) if the element had been previously used by the importer, regardless of whether it had been acquired or produced by such importer, the original cost of acquisition or production would have to be adjusted downward to select its use in order to arrive at the value of the element.

(3) Once a value has been determined for the element, it shall be apportioned to the value of the imported goods, as follows, namely:

(i)

the value might be apportioned to the first shipment if the importer wishes to pay duty on the entire value at one time;

(ii)

the importer may request that the value be apportioned over the number of units produced up to the time of the first shipment; or

(iii) the importer may request that the value be apportioned over the entire anticipated production where contract or firm commitments exist for that production.

Explanation.- If an importer provides the producer with a mould to be used in the production of the imported goods and contracts with him to buy ten thousand units. By the time of arrival of the first shipment of one thousand units, the producer has already produced four thousand units. The importer may request the appropriate officer to apportion the value of the mould over one thousand units, four thousand units or ten thousand units.

(4)

Addition for the elements specified in sub-clause (iv) of clause (c) of sub-section (2) of section 25 of the Act shall be based on objective and quantifiable data. In order to minimize the burden for both the importer and appropriate officer in determining the values to be added, data readily available in the buyer's commercial record should be used in so far as possible.

(5)

For those elements supplied by the buyer which were purchased or leased by the buyer, the addition shall be made for the cost of the purchase or the lease. No addition shall be made for those elements available in the public domain, other than the cost of obtaining copies of them.

(6)

Payments made by the importer for the right to distribute or resell the imported goods shall not be added to the price actually paid or payable for the imported goods if such payments are not a condition of the sale for export of the goods to Pakistan.

(7)

Where objective and quantifiable data do not exist with regard to the additions required to be made under clauses (b), (c), (d) and (e) of sub-section (2) of section 25 of the Act the transaction value cannot be determined under the provisions of sub-section (1) of section 25. As an illustration of this, a royalty is paid on the basis of the price in a sale in Pakistan of a liter of a particular product that was imported by weight in kilograms and made up into a solution after importation. If the royalty is based partially on the imported goods

and partially on other factors which have nothing to do with the imported goods, (such as when the imported goods are mixed with domestic ingredients and are no longer separately identifiable, or when the royalty cannot be distinguished form special financial arrangements between the buyer and the seller), it would be inappropriate to attempt to make an addition for the royalty. However, if the amount of this royalty is based only on the imported goods and can be readily quantified, an addition to the price actually paid or payable can be made.

SUB-CHAPTER V

MISCELLANEOUS

123. Use of generally accepted accounting principles.- For the purposes of this chapter, the expression "generally accepted accounting principles" refers to the recognized consensus or substantial authoritative support within Pakistan at a particular time with regard to the following, namely:-

confidential basis for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the person or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.

125. Dispute settlement.- (1) In case of dispute between the importer and the appropriate officer in respect of the value of the goods being valued, the same shall be resolved in consistence with the relevant provisions of the Customs Act, 1969 (IV of 1969).

(2) Nothing contained in this Chapter shall bar the claim of the importer for provisional release of goods under the section 81 of the Act or claim of the customs to assess the goods under the section 80 of the Act read with section 25 thereof.

“CHAPTER X

MAINTENANCE OF ACCOUNTS

126. Persons responsible to maintain accounts:-All importers shall maintain manual or electronic accounts of imports and disposal and supply thereof in the prescribed formats and shall maintain original and copies of contracts, letters of credit, bills of lading, invoices, packing lists and Bills of entry and Goods Declarations for a period of not less than three years from the date of respective imports as per the following conditions, namely:-

(I)

The name, National Tax Number, Sales Tax registration number, and address of the importer as well as complete address with telephone Nos., Fax Nos. etc. of storage premises shall be mentioned on the first page of the register in the form as set out below for maintenance of accounts of imports and disposal thereof;

(ii)

importer shall maintain Pakistan Customs Tariff (PCT) heading wise record on daily basis giving complete description with size, length, weight, Article No./Part No. /Patent/S.No; whatever applicable, of each unit and Pakistan Customs Tariff Heading No;

(iii) accounts of imports for commercial purposes or for industrial purposes (inhouse consumption) shall be maintained in the format as set out in Table-I;

(iv)

every importer maintaining accounts in the prescribed manner shall extend all assistance to an appropriate officer of Customs enabling him to perform detailed audit or examination of the accounts and related books and record and to obtain attested copies or verify the information on which the determination of the amount of customs duty and taxes paid or payable was made; and

(v)

importer shall also prepare and handover transport permit in the format as set out in Table-II which shall be presented by the driver of vehicle or conveyance to the Customs authorities whenever and wherever demanded during the transhipment for satisfaction of the authorities that goods being transported were legally imported.

TABLE I

TABLE II

Transport Permit

ATTACHMENT AND SALE OF MOVABLE PROPERTY

1. Warrant of attachment.-Where any movable property is to be attached, the Recovery Officer shall furnish a warrant, in the form prescribed in Annex-V, to the attachment officer, in writing and signed with his name along with official seal, specifying therein the name of the defaulter and the amount to be realized.
2. Service of copy of warrant.-The attachment officer shall cause a copy of the warrant to be served on the defaulter.
1. Attachment.-If, after service of a copy of the warrant, the amount is not paid forthwith, the officer shall proceed to attach the movable property of the defaulter:
2. Provided that the standing crops or agricultural produce lying in the field or stored in or near the dwelling house of the defaulter or stored on the land owned, leased or cultivated by the defaulter, which represents the agricultural produce of the land owned, leased or cultivated by the defaulter, shall not be attached.
3. Attachment to be made by actual seizure.- Where the property to be attached is movable property in the possession of the defaulter the attachment shall be made by actual seizure and the officer shall be responsible for due custody thereof.
4. Seizure after personal search.- (1) The attachment officer, if he has reasons to believe that any person is carrying goods liable to seizure or any document relating thereto, may cause search to be made of such person.

(2) When the attachment officer is about to search any person, he shall inform such person about his right to be taken to an officer of customs, not below the rank of Assistant Collector of Customs, or magistrate, and if such person so desires, the attachment officer shall take him without unnecessary delay to the nearest officer of customs or magistrate before searching him and the officer of customs or the magistrate before whom such person is brought shall, if he sees no reasonable ground for search, forthwith discharge the person and record reasons for doing so, or otherwise may direct that such search be made:

Provided that before making a search, the attachment officer shall call upon two or more persons to attend and witness the search and may issue an order in writing to them or any of them so to do, and the search shall be made in the presence of such persons and a list of all things seized in the course of such search shall be prepared by attachment officer and signed by witnesses:

Provided further that a female shall not be searched except by a female.

156. Entry into building or premises.- (1) The attachment officer may break open any inner or outer door or window of any building on reasonable grounds to believe that such building or premises contains movable property liable to seizure.

(2)

The action under sub-rule (1) shall be taken when admission to such building or premises is not given and the officer has notified his authority and intention of breaking open.

(3)

The officer proceeding under sub-rule (1) shall give all reasonable opportunity to women, if any, of the building or premises to withdraw therefrom.

(4)

The attachment officer shall, after seizure of movable property, call upon two or more persons to attend and witness the process and an inventory of all things seized in the process shall be prepared by him and be signed by the witness.

1. Seizure between sunrise and sunset.-Attachment by seizure shall be made after sunrise and before sun-set and not otherwise.
2. Seizure not to be excessive.- The attachment by seizure shall not be excessive, that is to say, the property attached shall be as nearly as possible proportionate to the amount specified in the warrant.
1. Attachment of movable property which cannot be removed due to certain reasons.-Where it is not practicable to seize any movable property, the attachment officer may serve on the owner of goods or any person holding them on his behalf an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of the Recovery Officer:
2. Provided that the attachment officer shall inform the Recovery Officer of the reasons due to which the movable property could not be seized.
3. Storage of seized movable property.- (1) All things, being movable property, seized for the purposes of attachment under this chapter shall, without unnecessary delay, be delivered into the care of the officer of customs authorized to receive the same being the incharge of state warehouse, unless otherwise specifically provided by the Act or rules made thereunder.

(2) If there be no such officer at hand, such things shall be carried to and deposited at the Custom House nearest to the place of seizure.

1. Attachment of negotiable instruments.- When the property is a negotiable instrument not deposited in a court, nor in the custody of a public officer, the attachment shall be made by actual seizure, and the instrument shall be brought before the Recovery Officer and held subject to his orders.
2. Attachment of property in custody of public officer.- Where the property to be attached is in the custody of any public officer, the attachment shall be made by a notice to such officer requesting that such property and any interest or dividend becoming payable thereon may be held subject to the further orders of the Recovery Officer by whom the notice is issued.
3. Attachment of share in movable property.- Where the property to be attached consists of the share or interest of the defaulter in movable property belonging to him and others as co-owners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring such share or interest or subjecting the same to a charge in any manner.
4. Attachment of property in partnership.-(1) Where the property to be attached consists of an interest of the defaulter, being a partner, in the partnership property, the Recovery Officer may make an order charging the share of such partner in the partnership property and profits, with payment of the amount due under the notice, and may, by the same or subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing, and of any other money which may become due to him in respect of the partnership, and direct maintenance of accounts and enquiries and make an order for the sale of such interest or such other order as the circumstances of the case may require.

(2) The other partners shall be at liberty at any time to redeem the interest charged or, in the case of a sale being directed, to purchase the same.

165. Sale.-(1) The Recovery Officer may direct that any movable property attached under this chapter or such portion thereof as may seem necessary to satisfy the notice shall be sold.

(2) The sale may be made in one or more lots, as the Recovery Officer may consider desirable and, if the government dues to be realized by sale are satisfied by the sale of a portion of the property, the sale shall be only with respect to that portion of the property and the sale of the remaining shall be stopped.

166. Proclamation of sale.- (1) When any sale of movable property is ordered by the Recovery Officer, he shall issue a proclamation of the intended sale, specifying the time and place of sale and whether the sale is subject to confirmation or not.

(2) The proclamation shall be made in writing in Urdu, English and language of the district where sale is intended and shall be publicized by-

keeping it in custody is likely to exceed its value, no sale of movable property under this chapter shall, without the consent in writing of the defaulter, take place until after the expiry of at least fifteen days from the date on which a copy of proclamation of sale was affixed in the office of the Recovery Officer.

1. Sale by public auction.- Sale by public auction shall be governed by chapter V (Auction) of this chapter.
2. Sale by tender or sealed bids.- The Recovery Officer may, if he deems fit, order sale by tender or sealed bids.
3. Preference for the co-owner.- Where the movable property to be sold is a share belonging to the defaulter and one or more co-owners, of whom one is such a co-owner, the bid of co-owner shall have preference in case the bid of such co-owner and some other person or persons is the same.
4. Transfer of title.- On completion of sale proceedings, the Recovery Officer shall grant to the purchaser a certificate specifying therein the property purchased, the price paid and the name of the purchaser, and the sale shall thereupon become absolute.
5. Irregularity not to vitiate sale.- Any error or irregularity in publishing or conducting the sale of movable property shall not vitiate the sale if the provisions of this chapter have been substantially complied with.
6. Negotiable instrument or share in a corporation.- Notwithstanding anything contained in this chapter, where the property to be sold is a negotiable instrument or a share in a corporation, the Recovery Officer may, instead of directing the sale to be made by public auction, authorize the sale of such instrument or share through a broker.
7. Order for payment of coin or currency notes to the referring authority.- Where the property attached is currency coins or currency notes, the Recovery Officer may, at any time during the continuance of the attachment, direct that such coins or notes, or part thereof, sufficient to satisfy the demand note, be paid over to the referring authority.

PART III

ATTACHMENT AND SALE OF IMMOVABLE PROPERTY

1. Attachment of immovable property.- Attachment of the immovable property of the defaulter shall be made, by the Recovery Officer, by an order prohibiting the defaulter from transferring or subjecting the property to a charge in any manner and prohibiting all persons from taking any benefit under such transfer or charge.
2. Service of order.- A copy of the order of attachment shall be served on the defaulter in the same manner as of service of notices laid down in rule 140 of these rules.
3. Proclamation of attachment.- The order of attachment shall be proclaimed at some place on or adjacent to the property attached by affixing a copy of order of attachment at a conspicuous place and a copy of the order shall also be affixed at the notice board in the office of the Recovery Officer.
4. Sale and proclamation of sale.- (1) The Recovery Officer may direct that any immovable property, which has been attached, or such portion thereof as may be necessary to satisfy the demand note, shall be sold.

(2) Where an immovable property is ordered to be sold, the Recovery Officer shall cause a proclamation to be made in the same manner as provided in rule 166 of these rules.

179. Contents of proclamation of sale.- (1) A proclamation of sale of immovable property shall be drawn up after proclamation of attachment and shall specify the time and place of sale and also specify-

(i)

the location of property to be sold;

(ii)

as fairly and accurately as possible, the revenue or rent, if any, assessed upon the property or any part thereof; and

(iii) the amount for the recovery of which the sale is ordered.

(2) The proclamation may also specify any other thing which the Recovery Officer considers material for a purchaser to know in order to judge the nature and value of the property.

1. Time of sale.- No sale of immovable property under this chapter shall, without the consent in writing of the defaulter, take place until after the expiration of thirty days from the date on which copy of the proclamation of sale was affixed on the property or in the office of the Recovery Officer, whichever is later.
2. Sale to be by public auction or tender.- (1) The sale shall be made by public auction or by tender to the highest bidder and shall be subject to confirmation by the Recovery Officer.

(2) If the sale is to be conducted through public auction, it shall be conducted by an auctioneer appointed under the provisions of chapter V (Auction)

182. Deposit by purchaser and re-sale in default.- (1) On every sale of immovable property, the person declared to be the purchaser shall pay, immediately after such declaration, a deposit of twenty five percent of the amount of his purchase money to the officer conducting the sale; and in default of such deposit the property shall forthwith be re-sold.

(2) The full amount of purchase money payable shall be paid by the purchaser on or before the fifteenth day from the date of the sale of property.

183. Procedure in default of payment.- (1) In default of payment within the time specified in sub-rule (2) of rule 182, the deposit made under sub-rule (1) thereof shall be kept as deposit to be dealt with under rule 184.

(2) The immovable property shall be re-sold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold.

1. Amount recoverable from purchaser in default.- Any deficiency of price which may happen on a re-sale by reason of a purchaser's default, including all expenses attending such re-sale, shall be recoverable from defaulting purchaser up to the maximum of deposit money and if there is any surplus after meeting the deficiency, the same shall be refunded to the defaulting purchaser.
2. Authority to bid.- All persons bidding at a sale shall be required to declare if they are bidding on their own behalf or on behalf of their principals and, in the latter case they shall be required to deposit their authority, and in default their bid shall be rejected.
3. Application to set aside sale of immovable property.- (1) Where immovable property has been sold in execution of a notice, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Recovery Officer to set aside the sale on his

property, he shall not, unless he withdraws that application, be entitled to make an application under sub-rule (1).

187. Application to set aside sale of immovable property on ground of non-service of proclamation or irregularity.-Where immovable property has been sold in execution of a demand note, the referring authority, the defaulter, or any other person whose interests are affected by the sale, may at any time within thirty days from the date of sale, apply to the Recovery Officer to set aside the sale on the ground that proclamation of attachment or sale was not made in the prescribed manner or on ground of a material irregularity in publishing or conducting the sale:

Provided that-

(i)

no sale shall be set aside on any such grounds unless the Recovery Officer is satisfied, on the basis of evidence produced before him, that the applicant has sustained loss by such reasons; and

(ii)

an application made by a defaulter under this rule shall be disallowed unless he deposits the amount recover-able from him in execution of demand note.

1. Setting aside of sale where defaulter has no salable interest.- At any time within thirty days of the sale, the purchaser may apply to the Recovery Officer to set aside the sale on the ground that the defaulter had no salable interest in the property sold.
2. Confirmation of sale.- (1) Where no application is made for setting aside the sale under this chapter or where such an application is made and disallowed by the Recovery Officer, he shall, if the full amount of purchase money is paid, make an order confirming the sale and thereupon the sale becomes absolute.

(2) Where such application is made and allowed and where, in the case of an application made to set aside the sale on deposit of amount and penalty and surcharge, the deposit is made within thirty days of sale, the Recovery Officer shall set aside the sale:

Provided that no such order shall be made unless notice of the application has been given to the persons likely to be affected thereby.

1. Return of purchase money in certain cases.-Where a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with the penalty, if any, deposited for payment to the purchaser, shall be paid to the purchaser.
2. Sale certificate.- (1) Where a sale of immovable property has become absolute, the Recovery Officer shall grant a certificate specifying therein the property sold and the name of the person who at the time of sale was declared to be the purchaser.

an order or proclamation of sale of immovable property has been made and the defaulter satisfies the Recovery Officer that there are reasons to believe that amount of the note may be raised by mortgage or lease or private sale of such property, or some part thereof, or of any other movable or immovable property of the defaulter, the Recovery Officer may, on the application of the defaulter, postpone the sale on such terms and for such period as he thinks proper, to enable defaulter to raise the amount.

(2) In such a case, the Recovery Officer shall grant a certificate to the defaulter authorizing him, within a period to be mentioned therein and notwithstanding any thing contained in this chapter, to make the proposed mortgage, lease, or sale:

Provided that all money payable under such mortgage, lease or sale shall be paid, not to the defaulter, but to the Recovery Officer:

Provided further that no mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the Recovery Officer.

1. Issue of fresh proclamation before re-sale.- Every re-sale of immovable property, in default of payment of purchase money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the same manner as provided for the proclamation of sale.
2. Bid of co-owner to have preference.- Where the property sold is a share of undivided immovable property of two or more persons, of whom the defaulter is a co-sharer, the bid of the co-sharer shall have preference in case the bid of such co-sharer and any other person or persons is the same.

PART IV

APPOINTMENT OF RECEIVER

195. Appointment of receiver for business.- (1) Where the property of the defaulter consists of a running business, the Recovery Officer may attach such business and appoint a person as receiver to manage the business.

(2)

Attachment of a business under this rule shall be made by an order prohibiting the defaulter from transferring or subjecting the business to a charge in any manner and prohibiting all persons from taking any benefit under such transfer or charge and intimating that the business has been attached under this rule.

(3)

Proclamation of attachment under this rule shall be made in the same manner as is provided for proclamation of sale under rule 166 of these rules.

(4) Where the Recovery Officer so directs, such order shall also be published in a newspaper.

1. Appointment of receiver for immovable property.-Where immovable property is attached, the Recovery Officer may, instead of directing a sale of the property, appoint a person as receiver to manage such property.
2. Qualification for receiver.- (1) Any person from general public may be appointed as receiver who has sufficient knowledge of the kind of business or the property for which he is to be appointed as receiver.

(2) Notwithstanding anything contained in sub-rule (1), any officer of Customs, Central Excise or Sales Tax, not below the rank of Principal Appraiser or Superintendent, may be appointed as receiver of the attached business and property.

198. Manner of working of receiver.- (1) Where it appears to the Recovery Officer to be just and convenient, he may by order-

(i)

remove any person from the possession or custody of an attached business or property;

(ii)

commit the same to the possession, custody or management of the receiver; and

(iii) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Recovery Officer thinks fit:

Provided that nothing in this rule shall authorize the Recovery Officer to remove from the possession or custody of business or property any person whom any party to the recovery proceedings has not a right to remove.

(2) The Recovery Officer may by general or special order, fix the amount to be paid as remuneration for the services of the receiver. Provided that the Government officers appointed as receivers shall not be entitled to such remuneration.

(3) Every receiver, not being a Government officer, shall-

(i)

furnish such security, if any, as the Recovery Officer thinks fit, to account duly for what he shall receive in respect of the business or property;

(ii)

submit his accounts at such periods and in such form as the Recovery Officer directs;

(iii) pay the amount due from him as the Recovery Officer directs; and

(iv) be responsible for any loss occasioned to the business or property by his willful default or gross negligence:

Provided that the government officer appointed as receiver shall furnish all such information as desired by the Recovery Officer regarding the progress of recovery along with accounts of proceeds after such intervals as may be prescribed by the Recovery Officer.

(4) The profits, or rents of such business or property shall, after deducting the expenses of management, be adjusted towards discharge of the Government dues, and the balance, if any, shall be paid to the defaulter.

199. Withdrawal of management.- The attachment and management under this chapter

may be withdrawn at any time at the discretion of the Recovery Officer, or if the Government dues are realized by receipt of such profits and rents or are otherwise paid.

PART V

MISCELLANEOUS

1. Application of Chapter XVIII of the Act.- Provisions of Chapter XVIII of the Act shall be followed if any arrests are to be made in pursuance of the provisions of this chapter.
2. Continuance of proceedings.- (1) No proceedings shall cease to be in force by reason of the death of the defaulter.

(2) If, at any time before or after the issue of a demand note to the Recovery Officer, the defaulter dies, the proceedings under this chapter may, except arrest and detention, be continued against the legal heirs of the defaulter who shall be liable to pay, out of the properties left by the deceased defaulter to the extent to which the properties are capable of meeting the outstanding Government dues, and provisions of this chapter shall apply as if the legal heirs were the defaulter.

1. Review.- Any order passed under this chapter may, after a notice to all persons interested, be reviewed by the officer who made the order, or by his successor in office, on account of any mistake apparent from the record.
2. Recovery from surety.- Where any person has, under this chapter, become surety for the amount due by the defaulter and the defaulter fails to pay the dues, such surety may be proceeded against under this chapter as if he were the defaulter.
3. Receipt to be given.- If any amount is received by any officer or other person in pursuance of this chapter, he shall issue receipt of the amount so received.
4. Delivery of property in occupancy of defaulter.- Where the immovable property sold is in the occupancy of the defaulter or of some person on his behalf or of some person claiming under a title created by the defaulter subsequently to the attachment of such property and a certificate in respect thereof has been granted under rule 191 of these rules, the Recovery Officer shall, on the application of the purchaser, order delivery to be made by putting such purchaser or any person whom he may appoint to receive such delivery on his behalf, in possession of the property, and, if need be, by removing any person who refuses to vacate the same.
5. Delivery of property in occupancy of tenant.- Where the immovable property sold is in the occupancy of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under rule 191 of these rules, the Recovery Officer shall, on the application of the purchaser, order delivery to be made by affixing a copy of the certificate of sale at some conspicuous place on the property, and proclaiming to the occupant that the interest of the defaulter has been transferred to the purchaser.
6. Resistance or obstruction of possession of immovable property.- (1) Where the holder of a certificate granted under rule 191 of these rules or the purchaser of any such property sold in execution of a demand note is resisted or obstructed by any person in obtaining possession of the property, he may make an application to the Recovery Officer, complaining of such resistance or obstruction.
7. Resistance or obstruction by defaulter.- Where the Recovery Officer is satisfied that resistance or obstruction was occasioned without any just cause by the defaulter or by any person at his instigation, he shall direct that the applicant be put into the possession of the property, and where the applicant is still resisted or obstructed in obtaining possession, the Recovery Officer may also, at the instance of the applicant, order the use of force.
1. Resistance or obstruction by a bonafide claimant.-Where the Recovery Officer is satisfied that the resistance or obstruction was occasioned by any person other than the defaulter, claiming in
2. good faith to be in possession of the property on his own account or on account of some person other than the defaulter, the Recovery Officer shall make an order dismissing the application.
8. Dispossession by certificate holder or purchaser.-(1) Where any person other than defaulter is dispossessed of immovable property by the holder of a certificate for the possession of such property or, where such property has been sold in execution of demand note, by the purchaser thereof, he may make an application to the Recovery Officer, complaining of such dispossession.

(2) The Recovery Officer shall fix a day for investigation the matter and shall summon the party against whom the application is made to appear and answer the same.

1. Bonafide claimant to be restored to possession.-When the Recovery Officer is satisfied that the applicant was in the possession of the property on his own account or on account of some person other than defaulter, he shall direct that the applicant be put into possession of the property.
2. Rules not applicable to transferee lite pandente. - Nothing in rule 209 and 210 shall apply to resistance or obstruction in execution of a certificate for the possession of a property by a person to whom the defaulter has transferred the property after the institution of proceedings in which the order was passed or to the dispossession of any such person.
3. Delivery of moveable property, debts and share.- (1) Where the property sold is moveable property of which actual seizure has been made, it shall be delivered to the purchaser.

(2)

Where the property sold is moveable property in the possession of some person other than the defaulter, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivering possession of the property to any person except the purchaser.

(3)

Where the property sold is a debt not secured by a negotiable instrument or is a share in a corporation, the delivery thereof shall be made by a written order of the Recovery Officer prohibiting the creditor from receiving the debt or any interest thereon, and the debtor from making payment thereof to any one except the purchaser, or prohibiting the person in whose name the share may be standing from making any transfer of the share to any person except the purchaser, or receiving payment of any dividend or interest thereon, and the manager, secretary, or other proper officer of the corporation from permitting any such transfer or making any such payment to any person except the purchaser.

1. Execution of documents and endorsement of negotiable instruments.- Where any endorsement or execution of document is required to transfer a negotiable instrument or any share to a purchaser under this chapter, such document shall be executed or endorsement shall be made by the Recovery Officer.
2. Form.- (1) Any notice, proclamation, certificate or order to be issued under this chapter shall be in such from as the Central Board of Revenue may, from time to time, specify.

(2) Until a form referred to in sub-rule (1) is specified by the Central Board of Revenue, the Recovery Officer may issue the notices, proclamations or certificates in the manner as he may deem fit in the circumstances of each case.

Annex I (See rule 135)

FORM OF DEMAND NOTE

C.No._____________________

Subject: ___________________________________________
References: ___________________________________________

(e.g. Order in Original No; Bank Guarantee No; Insurance Guarantee No; etc.)

Whereas a sum of Rs.__________ (Rupees ______________________________ only) as Government dues is outstanding and needs to be recovered from the following;

M/s ___________________________________
Address ___________________________________
Phone No. ___________________________________

N.T.N. No. ___________________________________
CCI&E,s Import/Export Reg.No. ___________________________________
Known properties ___________________________________

2. The above mentioned Government dues are on account of customs duties and other levies collected in the same manner as that of customs duties and details are mentioned in attached schedule. It is certified that all other formalities under the Act and rules made thereunder have been completed and there exists no bar or stay order against recovery. You are, therefore, requested to recover the above mentioned Government dues in terms of section 202 of the Customs Act, 1969 (IV of 1969), and rules made thereunder. Government dues may be remitted to the undersigned as soon as the same are recovered.

(Name)
Assistant Collector of Customs

________________________ Seal

________________________ To, The Recovery Officer

SCHEDULE

S.No. Description Particulars

(1) (2) (3)

1. Sr.No.
2. File No.
3. Customs Duties
4. Regulatory Duty
5. Sales Tax
6. Import Surcharge
7. Iqra Surcharge
8. Central Excise Duty
9. Agricultural Cess
10. Cotton Cess
11. Penal Surcharge
12. Licence Fee
13. Amendment Fee
14. Development Surcharge
15. Storage Charges
16. Establishment Charges
17. Fines
18. Personal Penalties
19. Other (i)

(ii)

(iii)

Annex II (See rule 136)

FORM OF MASTER REGISTER

1. Sr. No. __________________________________________________________________________

1. Defaulters Name, Address and Phone No.______________________________________________________________

1. Referring authority __________________________________________________
1. (i) No, date of issue and date of receipt of demand Note______________________
2. (ii) Reference Nos. _________________________________________________
1. Details of Government dues ___________________________________________
1. Customs duties Rs. _________ (Rupees ____________________ only)
2. Regulatory duties Rs. _________ (Rupees ____________________ only)
2. (iii) Sales Tax Rs. _________ (Rupees ____________________ only)
1. Import Surcharge Rs. _________ (Rupees ____________________ only)
2. Iqra Surcharge Rs. _________ (Rupees ____________________ only)
3. Central Excise duty Rs. _________ (Rupees ____________________ only)
3. (vii) Agricultural cess Rs. _________ (Rupees ____________________ only)
4. (viii) Cotton cess Rs. _________ (Rupees ____________________ only)
1. Penal Surcharge Rs. _________ (Rupees ____________________ only)
2. Licence Fee Rs. _________ (Rupees ____________________ only)
3. Amendment Fee Rs. _________ (Rupees ____________________ only)
5. (xii) Development Surcharge Rs. _________ (Rupees ____________________ only)
6. (xiii) Storage charges Rs. _________ (Rupees ____________________ only)
7. (xiv) Establishment charges Rs. _________ (Rupees ____________________ only)
8. (xv) Fines Rs. _________ (Rupees ____________________ only)
9. (xvi) Personal penalties Rs. _________ (Rupees ____________________ only)
10. (xvii) Other i) Rs. _________ (Rupees ____________________ only) ii) Rs. _________ (Rupees ____________________ only)
11. (xviii) Total Rs. ________ (Rupees____________________ only)
2. Date of issue of notice under rule 138 . ____________________________________
3. Date of issue of notice under rule 139 . ____________________________________
1. Known properties of the defaulter
1. Movable ____________________________________________
2. Immovable __________________________________________
4. Name and designation of attachment officer ._____________________________________
1. Details of movable properties attached.
1. ___________________________________________________
2. ___________________________________________________
2. (iii) ___________________________________________________
5. Date of proclamation of attachment of immovable properties _____________
1. Details of immovable properties attached_____________________________
1. ___________________________________________________
2. ___________________________________________________
2. (iii) _________________________________ __________________
1. Date of appointment of receiver, name of receiver and details of business or properties.
1. ______________________________________________________
2. ______________________________________________________
6. Date of sale of properties and their details . ___________________________
7. Amount of sale proceed or amount of profits alongwith mode of receipt._______________________________
8. Disposal of sale proceeds .________________________________________________________

1. Date of recovery and details of Government dues show in column 5 recovered alongwith the manner of recovery.___________________________________________________________________

Annexure III

FORM OF NOTICE OF RECOVERY AND ATTACHMENT

C.No. __________________________ Date: _______________

Notice for Recovery under sub-section (2) and (3) of section 202 of the Customs Act, 1969.

Subject: __________________________________________

Whereas Government dues amounting to Rs.___________ (Rupees ______________ only) are recoverable from you (M/s____________) on account of ____________________ ;

1. And whereas you have failed to deposit the above said Government dues recoverable from you and no recovery could be made in terms of sub-section (1) of section 202 of the Customs Act, 1969 (IV of 1969);
2. And whereas it is believed that the outstanding Government dues cannot be recovered from you in the manner so far followed;
1. Now, therefore, you (M/s ____________________ ) are hereby served with this notice in terms of sub-section (2) of section 202 of the Customs Act, 1969 (IV of 1969), to pay the amount within fifteen days from the date of service of this notice, failing which following proceedings under sub-section (3) of section 202 of the Customs Act, 1969 (IV of 1969), will be initiated without any further notice:-
1. attachment and sale of immovable property; and
2. appointment of receiver for the management of the movable or immovable property.
3. You (M/s _________________) are also directed not to directly or indirectly, sell mortgage, charge, lease or otherwise deal with all movable and immovable property belonging to you except with the permission of the undersigned.
4. You (M/s _________________) are also informed that all your movable and immovable properties shall stand attached on the expiry of 15 days of the service of this notice.
5. You are also informed that the attached properties can be seized and sold under the Customs Recovery Rules, 2001 or a receiver can be appointed to manage them. To avoid such a situation it shall be in your own interest to pay the Government dues as early as possible.

FORM OF WARRANT OF ATTACHMENT

C.No. __________________ Date

Subject: ______________________________________

Whereas Mr. ______________________ (Designation _________________ ), has been appointed as attachment officer in terms of Customs Rules, 2001, to attach the movable properties of M/s ________________________________ for the recovery of outstanding Government (Name and address) dues amounting to Rs. ____________ (Rupees ________________________ only), recoverable from the above mentioned defaulter.

Therefore, Mr. ________________ (Designation ________), is hereby directed to seize the movable properties belonging to the defaulter while observing the provisions of the Customs 2001 save exceptions as provided under the above said Rules. He is also directed to report to the undersigned about the completion of attachment formalities as soon as these are completed.

Recovery Officer

Seal ________________________ To,

(i)

The attachment officer _______________________ alongwith a copy to be served on the defaulter or his agent.

(ii)

Notice Board.

³⁷[215-A. Writing off of irrecoverable amount.- (1) Subject to the provisions

contained in the Customs Act, 1969 (IV of 1969), and after following the procedure in the rules under

this chapter, the amount which may be payable by way of duty, surcharge, fee, service charges, fine or

penalty or any other amount which is adjudged or payable under any bond, guarantee or other instrument executed under this Act or the rules made thereunder, may be written off by the competent

authority after recording reasons in writing subject to the following conditions, namely:

(i)

the recovery officer appointed under the rules issues Irrecoverability Certificate that all the steps prescribed under this chapter to recover the arrears have been taken and the arrears could not be recovered; and

(ii)

there has not been any serious negligence on the part of some individual official or officer or officers which may possibly call for disciplinary action requiring the orders of any higher authority.

(2) The monetary limits for writing off irrecoverable arrears are as specified in the Schedule

below, namely:-

SCHEDULE

1. Upto Rs. One million.
2. Rs. one million to 2.5 million.
3. Rs.2.5 to 10 Million.
4. More than Rs.10 million.

Collector

Chief Collector

Collector with the approval of Member (Customs)

Collector with the approval of Chairman, CBR.

The Collector may write off the arrears on the recommendation of the committee consisting of one Additional Collector and two Deputy Collectors. Chief Collector may write off the arrears on the specific recommendations of the concerned Collector. Arrears of more than 2.5 millions required to be written off shall be forwarded to the Board by the Collector clearly stating that all the requirements under the law and the rules have been completed, all possible efforts have been made and there is no lapse on the part of the officials/officers in this behalf Arrears of more than Rs. 10 million required to be written off shall be forwarded to the Board by the Collector clearly stating that all the requirements under the law and the rules have been completed, all possible efforts have been made and there is no lapse on the part of the officials/officers in this behalf

(3) Consolidated statement regarding all sanctions to write off shall be communicated to the Board for bringing to notice any defect of system. Annual statement of all the amounts written off shall be submitted to the Accountant General for reconciliation.]

CHAPTER XII

EXPORTS

SUB CHAPTER (1)

THE DRAWBACK (SAME STATE GOODS)

216. Repayment of duty as drawback in respect of goods other than motor vehicles taken into use between their importation and subsequent exportation shall be made according to the period and the amount specified in the table below:

TABLE

Length of period between date of importation or clearance from bond, amount of duty to be paid as drawback as the case may be, and date of shipment for re-exportation.

(1)

Not more than 6 months 90% of the duty

(2)

Not more than 12 months 80% of the duty

(3)

More than 12 months but 40% of the duty not more than 36 months

(4)

More than 36 months but 20% of the duty not more than 60 months

(5)

More than 60 months Nil

217. Where the importer so elects temporary import of construction machinery, imported for approved projects in Pakistan, may be allowed subject to the conditions that:-

(a)

the importer shall pay, 20% of the duty, taxes and surcharges involved at the time of clearance, and shall also furnish a bank guarantee, for an amount equivalent to 80% of the amount of customs duty, sales tax, surcharges involved, and additional surcharge at the rate of fourteen per cent per annum on the amount of guarantee, and the bank shall guarantee payment of full or part of the said amount and additional surcharge as and when demanded by the Collector of Customs;

(b)

in case the construction machinery is required to be retained for a further period , the importer shall , before the completion of each year from the date of importation, pay in cash further 1/5^th of the duty, sales tax, surcharges and the additional surcharge on that amount form the date of guarantee and may get his guarantee reduced accordingly;

(c)

on completion of five years from the date of importation or on exportation of the machinery to the satisfaction of the Collector , the guarantee shall be discharged if no amount or additional surcharge remains payable by the party; and

(d)

if the goods are not exported to the satisfaction of the Collector, this shall constitute an offence in terms of clauses 10A and 11 of the Table given below sub-section (1) of section 156 of the Customs Act, 1969 (IV of 1969).

218. Repayment of duty as drawback in respect of motor vehicles taken into use between their importation and subsequent exportation shall be made according to the period and the amount specified in the Table below;

TABLE

S.No. Length of period between date of Amount of duty to be paid as importation drawback Or clearance from bond, as the case may be,

DUTY DRAWBACK (CLAIM PAYMENT).

220. Definitions.- In this sub-chapter, unless there is anything repugnant in the subject or context -

(a)

"act" mean the Customs Act, 1969 (IV of 1969), and Federal Excise Act 2005;

(b)

"complete claim documents" means required documents for processing and sanctioning of duty drawback claims, namely:

(i)

application for export duty drawback declaring their category;

(ii)

calculation sheet;

(iii) bank credit advice - In case of non-submission of bank credit advice, a bank guarantee equivalent to the duty-drawback shall be submitted in lieu thereof. In absence of either the bank credit advice or bank guarantee, attested copy of L C shall be submitted in case of exports made against letter of credit;

(iv)

airways bill, Bill of Lading, Postal receipt or Cross Border Certificate;

(v)

customs certified invoice;

(vi)

packing list (if any);

(vii) photostate copy of Exchange Bulletin, or its authenticated copy, showing rate or rates prevailing on the day prior to the registration of the shipping bill; (viii) quadruplicate copy of bill of export/shipping bill containing customs examination report and bearing complete postal address of exporter and National Tax Number;

(ix)

For payment through banks. Pre-receipted duty drawback proforma and under taking, as per format Annex-A or Annex-B as laid down in State Bank's circular No. 76; and

(x)

For payments to be made through customs treasury. Proformas of rebate payment orders shall be submitted;

(c)

"Duty drawback" means a claim of refund of import duty, excise duty, as envisaged in clause

(c) of section 21, sections 37, 39, 40 and 41 of the Customs Act, 1969, and Rule 12 and 12A of the Central Excise Rules, 1944;

(d)

"Exporter" includes a person who exports goods to any country including Export Processing Zones in Pakistan and files duty drawback claims, except for export to Afghanistan and through Afghanistan to Central Asian Republics;

(e)

"Exported goods" means exported items to any foreign country including Export Processing Zones in Pakistan except to Afghanistan via land route and through Afghanistan to Central Asian Republics; and

(f)

The words and expressions used and not defined herein shall have the meanings assigned to them in the Acts.

221. Processing and sanctioning of duty drawback claims.- (1) Claims of duty drawback shall be sanctioned by the Customs if the same are complete in all respect, on the basis of profiling of exporter as given below:-

I. Category "GOLD"

Following category of exporters shall be rated as category "gold" namely:-

(i)

FOR LIMITED COMPANIES:

(a)

Common Criteria:

(1)

Limited Companies having certified Books of Account for the last 18 months;

(2)

either certified accounts showing amount of export or a separate statement by the concerned Chartered Accountant firm regarding amounts of export sales for the period in clause (1) above;

(3)

bank certificate for the last three years regarding export performance; and

(4)

payment of duty drawback through Bank or by crossed cheque encashable in any of the bank branches issuing the certificate at clause (3) above.

(b)

Specific Exporter Profile: Scrutiny of the past one year's duty drawback claim payments indicating ninety per cent claim acceptance in terms of value.

(ii)

FOR EXPORTERS OTHER THAN LIMITED COMPANIES

(a)

Common Criteria:

(1)

export registration of 3 years or more;

(2)

bank certificate confirming availability of loan credit limit equal to not less than four times the value of an individual claim to be sanctioned;

(3)

bank certificate for the last 3 years regarding export performance; and

(4)

payment of duty drawback through Bank or by crossed cheque encashable in any of the branches issuing the certificate at clause (2) or (3) above.

(b)

Specific Exporter Profile.- Scrutiny or audit of the past one year's duty drawback claim payments indicating at least ninety percent claim acceptance in terms of value.

EXPORT PROCESSING ZONE.

225. Definitions.-In this sub-chapter, unless there is anything repugnant in the subject or context,-

(a)

“Authority” means the Export Processing Zones Authority established under the Ordinance;

(b)

“Collector of Customs”, in relation to a Zone, means the Collector of Customs, in whose jurisdiction such Zone is established:

(c)

“import”, in relation to a Zone, means import from abroad and includes goods introduced into a Zone from the Tariff Area;

(d)

“investor” and “industrial-undertaking” shall have the same meaning as are, respectively, assigned to them in the Ordinance;

(e)

“Ordinance” means the Export Processing Zones Authority Ordinance, 1980(IV of 1980);

(f)

“Tariff Area” means any area in Pakistan outside the limit of a Zone; and

(g)

“Zone” means such area as is declared by the Federal Government to be a Zone under the Ordinance.

226. Import of goods into the Zones.- (1) subject to sub-rules (7)and(8), any goods can be imported into the Zones from abroad or from the Tariff Area.

(2) A separate bill of entry in respect of goods imported for a Zone along with other documents showing details of the goods as required under the Act and the Rules made thereunder shall be presented to the Customs authorities for assessment and clearance.

(3)

Goods imported into a Zone shall be assessed in accordance with the existing procedure.

(4)

The exemption granted under Board’s Notification No. SRO. 881(I)/80, dated the 23rd August, 1980 shall, be applicable to machinery, equipment, materials to be used solely within the limits of a Zone and goods imported into the Zone for warehousing purposes:

Provided that Investors in Export Processing Zones shall be allowed to dispose off their machinery in tariff area after three years from date of filing of the bill of entry of its import subject to import policy order and payment of duties and taxes.

(5)

An investor or his licensed clearing agent duly approved and authorised by the Authority shall carry out necessary formalities regarding Customs clearance.

(6)

All goods so cleared shall be secured and forwarded to the Zone under Customs supervision, a pass shall be sent with the goods specifying the name of the importer and the clearing agent, if any, number of vehicle, description and quantity of goods with the marks and numbers and contents thereof and, on receipt of the goods in the Zone, the officer of Customs allowing the goods to enter the Zone shall retain the pass.

(7)

Admission of goods imported for a Zone shall not be refused except when the goods are liable to restrictions or prohibitions imposed on the grounds of public morality or order, public security hygiene or health or for veterinary or phyto-pathological considerations, or relating to the protection of patents, trade marks or copy-rights.

(8)

Hazardous goods may be allowed to be admitted to a Zone only when an area specially designed for its storage is made available within the Zone.

(9)

Goods admitted to a Zone may remain there for such period as may be prescribed by the Authority.

³⁵[(10)(a) Import of vehicles shall be allowed without payment of customs-duty and other taxes as per the entitlements given in the table below, namely:-

TABLE

S. Quantum of investment in EPZ Vehicles
No. allowed

(1) (2) (3)

1. US$ 10.00 million or more upto US $ 25 million; 03
2. more than US $ 25 Million but less than US $ 50 Million;
1. equal to or more than US $ 50 Million
2. 10 but less than US $ 75 Million;
1. equal to or more than US $ 75 Million
2. 15 but less than US $ 100 Million;
1. equal to or more than US $ 100 Million
2. 20 but less than US $ 125 Million; and
3. equal to or more than US$ 125 Million,

05

507

25

(b)

subject to a maximum of one motor car of up to 1600 c.c within the number of vehicles allowed and shall be further subject to the verification of the amount of investment and completion of the project within a time period of three years by the Export Processing Zone Authority.]

(10)

Units employing upto 25 workers will be allowed to import or purchase one coaster while units employing more than 25 will be allowed to import or purchase a bus upto 50 seats. Similarly, units with turnover of US $ 5.00 million or more per annum will be allowed to import or purchase one cargo vehicle or truck;.]

227. Introduction of goods into the Zones from Tariff Area.- (1) Goods from the Tariff Area required for further processing in a Zone shall be admitted after completion of export formalities which are normally observed for export out of the country.

(2) Goods which are entitled to exemption or repayment of Customs-duties and sales tax on exportation shall qualify for such exemption or repayment immediately after these have been admitted into a Zone in accordance with the provisions of the Board’s Notification No. S.R.O..882(I)/80, dated 23rd August, 1980.

228. Export of goods from the Zones .- (1) Any goods removed from a Zone for exportation shall be exported under the export procedure as laid down in the Act and the rules made thereunder ¹¹[…]

(2)

Goods cleared for export shall be forwarded to the exporting station under Customs supervision, a pass shall be sent with the goods , specifying the name of the Exporter and the clearing agent , if any, number of vehicles, description and quantity of goods with the marks and numbers and , on receipt of the goods at the exporting station , the officer of Customs allowing the export of goods shall retain the pass.

(3)

All Customs formalities regarding removal of goods from the Tariff Area shall be completed at the main Customs Check Post or any place within the Zone approved for this purpose by the Collector of Customs.

(4)

Export Processing Zones manufacturers shall be treated at par with the bonded manufacturers in tariff area.

¹¹[ (5) The units established in the Export Processing Zones ^23A[excluding M/s. al-Tuwairqi Steel Mills Karachi]shall export only upto twenty per cent of their total production ot tariff areas in Pakistan while eighty per cent shall be exported to other countries. ]

229. Removal of goods from the Zone to Tariff Area.- (1) Removal of imported raw materials, imported goods in the same state and goods produced by investors in a Zone to Tariff

Area for home consumption may be allowed subject to the import restrictions and formalities applicable to imports from abroad , customs-duties and other taxes levied on imports into Tariff Area from the Zone shall be the same as duties and taxes levied on similar imports from abroad .

(2) Any goods permitted by the aforesaid authority for entry into the Tariff Area under sub-rule

(I)

may be taken out of the Zone after fulfilling all the requirements prescribed under the Act and the Rules made thereunder for the direct import from aboard into the Tariff Area .

(3)

The point in time to be taken into consideration for the purpose of determination of value and the rate of duties and other taxes applicable on goods removed for home consumption shall be determined in accordance with provisions of the Act and the Rules made thereunder.

(4)

The goods produced in a zone and removed to Tariff Area for home consumption shall be chargeable to customs-duties in the state in which they enter the Tariff Area .

Explanation. - The normal value of the goods manufactured in the E.P.Z., on entry into the Tariff Area and vice versa shall be assessed as per the provisions of section 25 of the Customs Act,1969.

1. Subcontracting for units of the Tariff Area.-Units operating in a Zone shall be allowed to undertake subcontracting for units of the tariff area subject to payment of duty and taxes on value addition only and sales tax if chargeable on the value of supply with the prior permission of the Collector of Customs on such conditions, restrictions and limitations as may be prescribed by the Collector or as otherwise provided in the Act or the Rules made thereunder:
2. Provided that in case of chargeability of central excise duty or sales tax, shall be collected in the same manner and time as if it were duty of customs payable under the Customs Act, 1969 (IV of 1969).
1. Destruction .-Any goods admitted to a Zone on having been rendered unfit for consumption may be allowed to be destroyed or rendered commercially value-less by an officer of Customs not below the rank of an Assistant Collector of Customs in such manner as may be prescribed by the Collector of Customs:
2. Provided that manufacturer in Export Processing Zone is allowed to remove @ 3% of the total value of export, the defective 'B' grade goods, waste, used packing materials, empty drums and cartons generated or produced in the Zone to tariff area on payment of duties and taxes.
1. Unaccounted goods.-If any importer fails to give proper account of the imported goods to the satisfaction of an officer of Customs not below the rank of an Assistant Collector of Customs, the importer shall pay on demand an amount equal to the duties and taxes leviable thereon and shall also be liable to pay penalties imposed for such violation under the Act and the rules made thereunder.
1. Remission of duties.- Subject to the satisfaction of the Collector of Customs, the duties and other taxes, if any, may be remitted in full or in part, as the case may be, in the following cases, namely:-
1. when any goods are damaged or destroyed by unavoidable circumstances or causes beyond the control of the importer or the owner;
2. when the waste or refuse of the goods is destroyed in accordance with rules 231; and
2. (iii) when goods imported are bona fide samples for study, testing or design.
2. Restriction on removal of goods from the Zones.-No goods shall be taken out from any Zone except as provided in rules 228, 229, 230 and 231, or for transfer to another Zone or to a customs manufacturing bond in a tariff area or for subcontracting with the prior permission of the Collector of Customs on such conditions, restriction and Limitation as may be prescribed by him or as other wise provided in the Act or the rules made thereunder.
3. Transfer of ownership .- Transfer of ownership of goods admitted to a Zone may be allowed:

Provided that retail sale of such goods shall not be allowed ⁴⁶[:]

⁴⁶[Provided further that exporters from tariff area may be allowed to purchase goods from within the units in the Zone to be exported to foreign destination directly from Export Processing Zone under the supervision and seal of Export Processing Zone and Customs authorities duly escorted by Customs fulfilling all the related formalities

236. Security of the Zones.- (1) Each Zone shall be delimited and bounded with secured boundary fending and suitable check posts may be established after approval of the Collector of Customs.

(2)

The construction of the check post shall be carried out by the Authority in accordance with the layout plan approved by the Collector of Customs.

(3)

The Collector of Customs may impose restrictions on means of access to a Zone and establish the hours of business. The Collector of Customs may keep the means of access to a Zone under permanent or intermittent supervision, and make spot checks on the goods introduced into the Zone to ensure that these are subjected to only authorized operations and to see that no unauthorized goods have been introduced.

SUB -CHAPTER 4

Omitted

SUB-CHAPTER 5

RELEASE OF RAW HIDES FOR MANUFACTURE OF EXPORTABLE GOODS.

264. In this sub-chapter unless there is anything repugnant in the subject or context the term ‘Raw Hides’ includes the following namely:-

(i)

Raw and pickled hides and skins;

(ii)

wet blue hides and skins;

(iii) finished leather; and

(iv) accessories, components and trimmings for leather manufacturers.

1. The Collector of Customs may, on the application of an importer of dutiable goods, hereinafter referred to as raw materials, who intends to use the raw materials in the manufacture of goods which are wholly meant for export and makes a declaration to that effect, allow the importer to clear the raw materials, without payment of duty, under bond to a factory which is a private warehouse licensed under the Customs Act, 1969 )IV of 1969).
2. (1) Before removal of raw materials for manufacture, the importer shall apply to the Collector within whose jurisdiction the manufacturing bond is located with a Master Specimen Card which should show specimens of all the imported items with complete details of the bill of entry: Before exporting the finished product the same importer shall apply and get a copy of a certified Analysis Card which shall show the quantity of raw materials required for the manufacture of a unit of the goods meant for export; Input, output ratio and wastages, however, shall be mentioned on the analysis card.

(2) The Collector concerned shall retain one copy of the certified analysis card and hand over one such copy to the importer to be produced by him at the time of export clearance of finished goods, and one such copy of certified analysis card is also to be given to,

(a)

the export station for retention in the export section thereof for the purpose of comparison with the manufactured goods at the time of their export; and

(b)

the officer-in-charge of the warehouse on the factory premises.

1. The raw materials cleared under rule 265 shall be used only for the manufacture of goods for export in bond under Customs supervision.
2. (1) An importer who desires to clear any raw material under rule 1 shall apply to the Collector within whose jurisdiction the manufacturing unit is located, and the quantitative control ensuring re-export be carried out in terms of value-added goods such as finished leather or leather manufactures, as the case may be.

(2)

The importer shall declare separately in the customs into-bond bill of entry the exact quantity and value of the raw materials specifically imported or allocated for the manufacture of goods in bond under Customs supervision.

(3)

The importer shall consume the raw materials imported under rule 264, within a period of two years and those supplied free of cost or imported on credit shall be consumed within three years from the date of admission of such raw materials in the factory.

1. Before allowing clearance of any raw material under rule 264, the Customs authorities shall take a note of the raw materials declared under sub-rule (2) of rule 268 and endorse the relative invoices and the bill of entry with the words, "FOR MANUFACTURE IN BOND" in capital letters.
2. After the requirement of rules 265,268 and 269 have been duly complied with and the importer has executed a bond of an amount equal to twice the amount of the duty and taxes chargeable on the raw materials imported by him on such terms and conditions as may be specified by the Collector of Customs, the Collector shall allow clearance of the raw materials and their removal under Customs supervision to the importer's factory which is a private warehouse licensed under the Customs Act, 1969 (IV of 1969).
3. (1)Any wastage or defective goods shall, at the option of the importer, be removed to a place set apart or destroyed under Customs supervision or cleared for home-consumption on payment of the duties and taxes payable in respect of the raw materials.

(2) An importer who desires to re-export raw materials imported for manufacture of goods under this sub-chapter shall re-export the same within the period specified in sub-rule (3) of rule 274.

272. The importer shall maintain proper accounts of the imports, production, export and wastages of the raw materials and finished goods to the satisfaction of the Collector of Customs in separate parts of a register in the following form or in such other form as the Central Board of Revenue may direct, namely:

PART I

( Materials in bond )

Officer's signature and date.

PART II

Input

_______________ Skins______Hides,_______________Sq.Ft . of Raw pickled or Wet Blue vide Bill of Entry No._________Dated___________.

SPECIMEN OF CERTIFIED ANALYSIS CARD FOR LEATHER MANUFACTUERS ( For Import of Accessories )

Details of Accessories Name of Styles/Models Style A Style B Style C Style D Style E Style F Style G Buttons

Zippers 2 Side stitching Tape Fusing Stopper Cord Ends Lining

Manger Loops Fur Logo Tags Eyelets Rivets Bicycles D Tags E Wastage

SUB CHAPTER 6
Omitted
“SUB-CHAPTER 7
DUTY AND TAX REMISSION FOR EXPORTS

296. Definitions.– (1) In this sub-Chapter, unless there is anything repugnant in the subject or context,–

(a)

“acquisition” means import or purchase of foreign origin goods including banned or restricted items within the scope and extent of this sub-chapter or procurement of locally manufactured goods and taxable or excisable services covered under this sub-Chapter provided that acquisition of banned or restricted items shall be subject to prior permission from the Ministry of Commerce;

(b)

“Act” means the Customs Act, 1969 (IV of 1969), the ⁴⁶[Federal Excise Act 2005] and the Sales Tax Act, 1990;

(c ) “Appendix” means an Appendix to this sub-Chapter;

(d)

“DTRE” means duty and tax remission for exports;

(e)

“DTRE applicant” means a person who files an application in the form set out in Appendix I for grant of facilities under this sub-Chapter;

(f)

“DTRE user” means a person who has been approved for availing facilities under this sub-chapter by the concerned Regulatory Collector;

³²[(ff) engineering goods” includes goods classified under Chapter 72 to Chapter 96 of the First Schedule of Customs Act, 1969 or as approved by the Engineering Development Board (EDB),]

(g)

“export” includes supply of goods,–

(i)

by an indirect exporter to a direct exporter;

(ii)

against international tenders;

(iii) to projects or sectors entitled to import or purchase such goods free of duties and taxes; and (iv) to export processing zones;

(h)

“indirect exporter” means a person who has a firm contract or export purchase order from a direct exporter for the manufacture and supply of goods to such exporter;

(i)

“input goods” means goods and includes services eligible for acquisition and also includes,–

(a)

trims and accessories;

(b)

electricity and gas on which sales tax has been paid; and

(c ) furnace or diesel oil for the generation of electricity used or consumed in the manufacture of output goods for export under this sub-chapter;

(j)

“import” includes purchase of input goods from export processing zone or from a private or public bonded warehouse including manufacturing bond but excluding diplomatic bond;

(k)

“Ordinance” means the Income Tax Ordinance, 2001 (XLIX of 2001);

(l)

“Pakistan Customs Computerized System (PACCS)” means the Customs Computerized System as defined in clause (ia) of section 2 of the Customs Act, 1969 (IV of 1969);

(m)

“Regulatory Collector” means the Collector of ⁴⁶[Customs] in whose jurisdiction the DTRE applicant ⁴⁶[is]registered under the Sales Tax Act, 1990; and

(n)

³²[utilization period” means the period commencing from the date of approval of DTRE application till the date of export of output goods under this sub-Chapter]

(2) The words and expressions used but not defined in sub-rule (1) shall have the meaning assigned to them in the Act or, as the case may be, the Ordinance.

297. Scope of DTRE facility.– (1) The DTRE facility under this sub-Chapter shall be available to,

(a)

the persons registered under the Sales Tax Act, 1990, as exporters;

(b)

the persons who make value-addition in the manufacture and export of goods in accordance with the prevalent value-addition of the relevant industry;

(c)

those who act or intend to act as contracted vendors of foreign manufacturers or foreign buyers; and

(d)

commercial exporters engaged in the purchase and export of goods in same state either after packing or otherwise.

(2) The DTRE facility under this sub-Chapter shall not be admissible to,–

(a)

pure terephthalic acid (PTA),^27&32[omitted], raw sugar and cooking oil or vegetable ghee or their raw materials; and

(b)

the goods which are banned or restricted under the prevalent Import and Export Policy Orders on account of national security, public health and cultural, moral or religious considerations.

298. Application for DTRE approval. – (1) A DTRE applicant who intends to obtain DTRE approval under this sub-Chapter on the basis of specific export or supply contract or order shall apply to the Regulatory Collector in the form set out in Appendix I over the web through PACCS.

(2)

A direct exporter or commercial exporter may obtain advance DTRE approval on the basis of his past export performance for the general class of export products corresponding to the Harmonized System Code and he shall be entitled to acquire input goods to meet his future export-related production requirements for a period of twelve months as substantiated on the basis of bills of export or E Forms duly countersigned by the State Bank of Pakistan or sales tax returns stretching over a period of previous twenty-four months.

(3)

An indirect exporter who is not currently in possession of any supply order but has been manufacturing and supplying goods to direct or commercial exporter either under DTRE scheme or otherwise may obtain advance DTRE approval on the basis of such past supplies of general class of export products corresponding to the Harmonized System Code for the acquisition of input goods to meet his production and supply requirements for the next twelve months.

(4)

An indirect exporter who is in possession of more than one firm supply contract or purchase order from a direct exporter or a commercial exporter may seek consolidated DTRE approval for all such contracts or orders.

299. Input-output ratios and wastages.- (1) In case of goods other than same-state goods, the input-output ratios and wastages under this sub-chapter shall be declared by the applicant as per Appendix I.

(2)

Tags and printed materials supplied by a foreign supplier without involvement of foreign exchange from Pakistan shall be allowed to be imported without any quantitative restriction for the purpose of this sub-Chapter.

³²[(3) The Regulatory Collector may, upon receipt of an application under this sub-Chapter, refer such application to Input Output Coefficient Organization (IOCO) for determination of input-output ratios and wastages, except an application in respect of engineering goods, which shall be referred to EDB, before granting DTRE approval.

(4)

IOCO or, as the case may be, EDB upon receipt of a reference from the Regulatory Collector, shall determine input-output ratios and wastages, as deemed appropriate, and forward their findings to the Regulatory Collector within a period of thirty days or such shorter period as may be specified by the Regulatory Collector in any specific case. If IOCO or, as the case may be, EDB fail to forward their findings to the Regulatory Collector within the prescribed period, the input-output ratios and wastages, as determined by the Regulatory Collector, shall become final:

Provided that the Regulatory Collector may grant provisional DTRE approval pending receipt of response from IOCO or EDB, as the case may be, in this behalf, and subject to adjustments accordingly on receipt of final determination by IOCO or EDB, as the case may be.”;

300. Grant of DTRE approval. - (1) On the basis of DTRE application, a Regulatory Collector, if he is satisfied with the bona fides of the DTRE applicant, shall grant DTRE approval and each such approval shall be fed into PACCS over the web in the format as given in Appendix II.

(2) The amounts suspended by the Regulatory Collector in respect of leviable customs-duties, excise duty, sales tax and withholding tax shall be secured against,–

(a)

indemnity bond along with the post-dated cheque from a direct and indirect exporter;

(b)

bank guarantee from a commercial exporter; and

(c ) corporate guarantee from exporters in the corporate sector.

(3) The Regulatory Collector may, at the time of granting DTRE approval,–

³²(a) verify the manufacturing facility of DTRE applicant through inspection and determine the production capacity of such facility by physical survey, in addition to verifying the business turnover from the sales tax profile or other available records of such DTRE applicant to ensure that quantity of the input goods applied for commensurates with the actual production and business capacity of such applicant;; and]

(b) consult the records of Input-Output Coefficient Organization for identical or similar output goods if available to ensure that the input-output ratios and wastages as claimed by the DTRE applicant are as per industry standards.

(4)

Where an existing DTRE approval does not cater to the quantitative or other requirements of a contract or supply order due to any valid reasons, the Regulatory Collector may suitably amend the existing DTRE approval.

(5)

Where an exporter proves to the satisfaction of the Regulatory Collector that export under a separate contract can not be arranged out of his regular production due to valid reasons, past export performance as well as contract-based DTRE approval may be granted concurrently for the output goods of the same or different description.

(6)

Where the indirect exporter is granted DTRE approval on the basis of contract or order entered with a direct exporter or commercial exporter, the entitlement of the direct exporter or commercial exporter to duty suspension under this sub-chapter in respect of his export contract or order with a foreign buyer shall proportionately be reduced to the extent of entitlement of the indirect exporter.

(7)

No DTRE application shall be rejected without affording opportunity of being heard to the DTRE applicant.

301. Amendment, suspension or cancellation of DTRE approval. – (1) A DTRE- user may apply to a Regulatory Collector for amendment in the previous approval or for its cancellation and each such request shall be decided within ten days of receipt thereof and fed into PACCS as per Appendix II.

(2)

No request for amendment in the existing DTRE approval shall be rejected and no DTRE approval shall be cancelled without affording to the DTRE applicant or the DTRE- user an opportunity of showing cause in writing and being heard.

(3)

The Regulatory Collector may, on his own or otherwise, suspend any DTRE approval pending his decision to cancel such approval and each such suspension shall be fed into PACCS as per Appendix II.

(4)

The Collector may, in addition to any other action under the law, require the input goods already acquired or output goods produced under the suspended or cancelled DTRE approval to be dealt with in such manner as he may deem appropriate.

302. Acquisition of duty free input goods.- (1) A DTRE user shall be entitled to acquire input goods without payment of customs duty, excise duty, sales tax or withholding tax in accordance with his DTRE approval, and all such acquisitions shall be fed into PACCS in the following manner, namely:–

(a)

if imported, these shall be fed into PACCS as per Appendix-IV by the Collectorate through which such input goods have been cleared; and

(b)

local input goods shall be reported by the DTRE user to the Regulatory Collector for feeding into PACCS as per Appendix IV.

(2)

The input goods manufactured or produced in excisable premises shall be supplied against a valid document prescribed under the Federal Excise Act 2005, or the rules made thereunder.

(3)

The Regulatory Collector may allow a DTRE user to utilize his duty and tax-free acquired input goods for his new approval if his previous DTRE approval has been cancelled due to pre-mature termination or cancellation of the export or supply contract of such input goods have been rendered surplus for any valid reason and each such approval shall be fed by the Collector into PACCS as per Appendix II.

³²[302A. Drawal of samples.- Samples of imported input goods and output goods meant for export shall be drawn at the time of import and export, respectively in the presence of Assistant Collector or Deputy Collector, incharge of concerned Customs station, which shall be signed by such Assistant Collector or Deputy Collector and DTRE approval number and date shall be endorsed thereon. The Assistant Collector or Deputy Collector incharge of concerned Customs station, shall inform the Regulatory Collector about the cases where description or other material particulars in respect of imported input goods or output goods meant for export are different from that declared in Appendix-I and may proceed against the DTRE user in accordance with law]:

⁴⁴[“Provided in cases of high value or heavy machinery compo or items where drawal of sample is not feasible, in lieu of such drawal of samples, the Assistant Collector or Deputy Collector in charge of Customs import station or, as the case may be, Customs export station shall –

(a)

examine all such consignments and ascertain copies of literature which may comprise catalogues, manuals, brochures, product information leaflets etc. which reasonably explain the specifications of goods for import, or as the case may be, export, under DTRE. Such literature shall bear signature and stamp of DTRE user alongwith particulars such as user’s name, DTRE approval number and date, GD number and date, etc.

(b)

sign such literature and endorse the same to the relevant Regulatory Collectorate, the Customs import station, or as the case may be , the Customs export station and the DTRE user; and

(c)

before allowing release of consignments for export under the DTRE facility, compare literature of the imported raw materials, received from relevant Customs import station with the certified ones provided by the DTRE user for finished goods in order to satisfy himself that the finished goods have been manufactured or produced using such imported raw materials and endorse the same in the examination report and in case of any discrepancy in description or other material particulars therein, he shall immediately inform the Regulatory Collector about such cases and proceed against the DTRE user in accordance with law.]

303. Acquisition of duty paid input goods.– A DTRE user shall be entitled to claim duty drawback on acquisition of duty paid input goods subject to the applicable duty drawback notification only after full discharge of the liabilities and obligations under this sub-chapter:

Provided that where a person is already in possession of stocks of duty-paid input goods, he may declare at the time of seeking approval and use such stocks for the purpose of this rule:

Provided further that in no case the quantity of input goods on which a DTRE user is entitled to draw back under this rule, shall exceed 20% of the value of his DTRE approval.

304. Acquisition of locally manufactured input goods.– (1) A DTRE user shall be entitled to procure without payment of sales tax locally manufactured input goods and duty drawback shall be admissible in respect of duty paid input goods used in the manufacture of such goods at the rate given in the relevant duty drawback notification.

(2) Where a registered person supplies goods to a DTRE user, he shall issue a zero-rated invoice under section 23 of the Sales Tax Act, 1990, mentioning the number and date of DTRE approval of the buyer.

1. Utilization of input goods.– The input goods acquired under this sub-chapter shall be utilized in the manufacture and export of output goods within ³²[twenty-four months from the date of approval of DTRE application:]
2. Provided that the said period may be extended by the Board in cases of exceptional circumstances.
1. Export of manufactured goods.– A bill of export or goods declaration filed for the export of a DTRE consignment under this sub-chapter shall contain the DTRE approval number and shall be subject to all formalities for other declarations or endorsements, if any, and the procedure in respect of processing and examination of export goods, for the time being in force, shall be observed and on export of such goods the respective Collectorate of Customs shall feed the requisite information into PACCS against the DTRE approval number as per Appendix IV:

Provided that no bill of export or goods declaration shall be filed for supply of goods against international tenders or to exempt projects or sectors in Pakistan:

Provided further that supplies against international tenders or to exempt projects or sectors in Pakistan or from indirect exporter to direct exporter shall be reported by the DTRE user to the Regulatory Collector who shall enter the relevant particulars into PACCS as per Appendix IV.

307. Exports to Afghanistan, etc.- (1) In case of exports to Afghanistan and through Afghanistan to Central Asian Republics by land routes, the facility of this sub-chapter shall be admissible only against established irrevocable letters of credit or receipt of advance payment in convertible foreign currency from the country of import.

(2)

Where advance payments are received in installments as agreed in the export contract, the Regulatory Collector shall grant DTRE approval staggering the acquisition of input goods over a period commensurate with the receipt of such installments.

(3)

For exports under sub-rules (1) and (2), the conditions laid down in the Export Policy Order in force or any other conditions or limitations as may be specified by the Board or the Regulatory Collector, or the concerned Collector of Customs shall be observed.

³⁶[(4) Notwithstanding anything contained hereinbefore, the export of POL products to Afghanistan under DTRE shall be carried out in accordance with the procedure given in chapter XXII of these rules.

(5)

POL meant for export to Afghanistan shall only be transported through carrier licensed under Chapter VIII of these rules read with Chapter XXII thereof.

(6)

Export of POL product to International Security Assistance Force (ISAF) or Defence Energy Support Centre (DESC) in Afghanistan under DTRE shall be verified and accounted for on the basis of authentication of the receipt of the quantity by ISAF or DESC, as the case may be, to be produced by the oil exporting company or refinery for appropriate action under this or any other chapter.

(7)

Remittance of foreign exchange against export of POL products to ISAF shall be subject to the conditions specified in the proviso to clause (d) of sub-paragraph (2) of paragraph 8 of the Export Policy Order, 2006. ]

307A. Unaccounted-for un-exported goods.– (1) If a DTRE user fails to account for the duty and tax free acquired input goods, or he fails to account for his finished goods manufactured therefrom or he fails to account for his un-exported same-state-goods, he shall be liable to pay duties and taxes including additional duties or additional tax and penalties leviable on such goods under the relevant Acts or the Ordinance.

(2)

Notwithstanding sub-rule (1), a DTRE user may with the permission of the Regulatory Collector dispose of the input goods or output goods within the prescribed utilization period in the following manner, namely:–

(a)

return to person who had supplied the input goods;

(b)

sale, by a DTRE user to another DTRE user for export;

(c ) local sale on payment of ²²[duties and taxes leviable at the time of such sale] and on production of no objection certificate from the Ministry of Commerce in case input goods are banned or restricted for import:

²²[“Provided further that the permission for local sale of input goods as specified in this clause shall be granted by regulatory Collector in case of DTRE user’s inability to manufacture and export output goods for reasons beyond his control; ]

(d)

destruction after approval of the Regulatory Collector if goods are not fit for consumption or sale with remission of duty and taxes; and

(e)

local sale of B-grade products, factory rejects or wastage on payment of leviable duties and taxes and subject to the provisions of the prevalent Import Policy Order:

Provided that where any of the above option is allowed, the Regulatory Collector shall reduce equivalent quantity of output goods or input goods as the case may be, by feeding them into PACCS as per Appendix II.

307B. Refund of sales tax.– Refund of sales tax on electricity or gas or services utilized as input goods for DTRE purpose or inputs covered under rule 303 or in respect of goods supplied in terms of sub-rule

(2) of rule 304 shall be admissible to a DTRE user or as the case may be, to a registered person as admissible under the Sales Tax Act, 1990:

Provided that the DTRE user shall be entitled to refund of sales tax on the acquisitions of tax paid input goods if the value of such goods other than electricity, gas and services does not exceed 20% of the total value of DTRE approval.

307C. Records and documents.– A DTRE user shall keep and maintain separate from other business records, if any, the following records and documents in proper manner, namely:–

(a)

copies of DTRE applications and DTRE approvals;

(b)

records of acquisitions of input goods and exports;

(c ) record for destruction or other authorized disposal of input goods and output goods; and

(d) export contracts or orders and supply contracts or orders.

307D. Reconciliation statement.– Within sixty days of the expiry of utilization period allowed under this sub-chapter, or earlier after export, a DTRE user shall file to the ²¹[Regulatory Collector] a reconciliation statement in the form as set out in Appendix III.

307E. DTRE audit.- (1) The liability of a DTRE user to pay duty and taxes under a security instrument furnished by him under this sub-chapter, shall not be discharged unless post-exportation audit is carried out and completed satisfactorily within a period of twelve months after the period specified in rule 305 or after filing of reconciliation statement under rule 307D, whichever is earlier.

(2)

Audit under this sub-chapter shall be a combined or consolidated audit for DTRE and other taxable activities, if any, and shall cover all the duties and taxes for which the security instrument has been furnished.

(3)

In case of commercial exporter holding a DTRE approval for same-state-goods, the Regulatory Collector may discharge the security instrument if such exporter, on the basis of purchase and export documents in his possession, proves that the goods acquired by him against such approval have been exported in full.

(4)

Where as a result of post-exportation audit, there arises any discrepancy, irregularity or any violation of the provisions of this sub-Chapter or any other law applicable in this behalf by the DTRE user, the same shall be reported to the adjudication officer of competent jurisdiction.

307F. Power to suspend DTRE facility.- The Board may by notification in the official Gazette, suspend application of this sub-Chapter in respect of any particular goods or a group or a class of goods.

307G. Miscellaneous.- (1) An officer authorized by the Regulatory Collector shall have free access to any place where goods covered under a DTRE approval issued by such Collector, are stored, processed or manufactured or otherwise dealt with and to the records, documents and information relating to such goods.

(2) All liabilities or dues as and if payable or outstanding under any of the provisions of this sub-Chapter shall be finally ascertained and recovered by the Regulatory Collector.

307H. Saving.-³²[(1)] All fully or partially unutilized DTRE approvals, if otherwise in order and correct, issued under sub-Chapter 7 substituted by this sub-Chapter shall be deemed to have been validly issued under this sub-Chapter.

³²[(2) Utilization period in the case of approvals of DTRE granted upto 8^th June, 2007, shall remain the same as was in force on and prior to the said date.]

APPENDIX I

[See sub-rule (1) of rule 298] [Information as below to be provided through PACCS over the Web]

APPENDIX II

[See sub-rule (1) of rule 300, sub-rules (1) and (3) of rule 301, sub-rule (3) of rule 302, and proviso to sub-rule (2) of rule 307A] [Information as below to be provided through PACCS over the Web]

Application for amendment, suspension or cancellation of Duty & Tax Remission for Exports, and approval by Regulatory Collector to utilize duty and taxes–free acquired inputs for new approval, and information and approval in respect of supplies against international tenders, and supplies to exempt projects or sectors.

(b) PARTICULARS OF THE GOODS ALLOWED TO BE EXPORTED:

(c)

PARTICULARS OF THE INPUT GOODS ALLOWED TO BE IMPORTED:

(d)

PARTICULARS OF THE INPUT GOODS ALLOWED TO BE LOCALLY PROCURED:

(e)

PARTICULARS OF THE INPUT GOODS ALLOWED TO BE ACQUIRED AGAINST CLAIM OF DUTY DRAWBACK:

APPENDIX III

[See rule 307D]

RECONCILIATION FORM

Duty & Tax Remission for Exports

For Office Use only
Receipt No. ……………………..
Date ……………………………..

(a)

PARTICULARS OF THE GOODS EXPORTED:

(b)

PARTICULARS OF THE INPUT GOODS:

(c) INPUT – OUTPUT RATIOS :

(d)

AMOUNT OF DUTIES/TAXES LEVIABLE ON INPUT GOODS:

Name & Designation: ____________

Exporter’s Signature & Stamp