Securities released on daily basis, no blockage of revenue, FBR told: PaCCS

The Model Customs Collectorate (MCC) of Pakistan Customs Computerised System (PaCCS) Karachi has informed the Federal Board of Revenue (FBR) that financial securities, like bank guarantee, post-dated cheques and indemnity bonds are released on daily basis; as such, securities do not block revenue of the importers.
Sources told Business Recorder here on Saturday that the Collector at MCC PaCCS Karachi has informed the FBR about the financial securities of importers kept under the PaCCS system. According to the MCC, PaCCS Collectorate receives securities on different accounts under Customs Act, 1969 eg, provisional assessments under section 81 of the Customs Act on the issues of classification or valuation; under different concessionary statutory regulatory orders (SRO's) where securities are kept till the importer produces certificate of consumption of raw material; orders of the court where securities are kept pending till decision of the court etc.
In some cases, even the court's order to keep the security with the Nazir (staff) of the court till finalisation of case. The securities are also received under SROs for temporary importation of goods. Such securities are released without encashment when the goods temporarily imported are subsequently exported.
The securities are received in different forms including bank guarantee; post-dated cheques; indemnity bond and undertaking. The MCC PaCCS Karachi further said that all securities do not necessarily mean blocked revenue. These are received and kept in the Collectorate till the purpose for which these had been received is served either in favour of department or against it. Moreover, these are received and released almost on daily basis.
The MCC PaCCS Karachi has submitted its report on the audit observations of the Auditor General of Pakistan (AGP) on the non-encashment of securities of Rs 1004.761 million. The AGP observed that securities for the differential amounts with validity period of 270 days have to be furnished by importers in case of Provisional Assessment under Section 81 of Customs Act, 1969. These securities are monitored by a Securities Management System working under PaCCS. On expiry of validity period, system generated requests for encashment of expired securities are developed for taking action for encashment and its deposit in government account.
The scrutiny of record pertaining to Securities Management System for the years 2006-07 and 2007-08 transpired that a huge number of securities, involving Rs 1004.761 million, had been expired and were pending for encashment despite lapse of considerable period. This inaction on the part of PaCCS staff caused non-realisation of government dues. The departmental accounts committee had directed the MCC to proceed further for finalisation/recovery in respect of 1184 customs reference numbers ('CRNs') involving Rs 805 million and recommended to the PaCCS for settlement to the extent of 456 CRNs involving Rs 198 million.