Overstayed goods at bonded warehouses: importers to face penalties for dishonoured cheques

The Federal Board of Revenue (FBR) has decided to invoke prosecution provisions of the Customs Act 1969 against importers, whose financial securities including post-dated cheques and bank guarantees could not be encashed for release of overstayed goods in the Customs bonded warehouses. Prosecution provisions would include imposition of heavy fines and penalties, auction of goods and other recovery measures available in the said law.
Sources told Business Recorder here on Sunday that the decision had been taken in the recent Collectors of Customs conference held at Karachi. It has been decided to take extraordinary measures to achieve target of customs duty for 2012-2013. One of the key measures is to immediately issue notices to all importers, whose goods have been overstayed beyond a period of six months in the customs warehouses across the country. The customs authorities will take strict recovery measures in case post-dated cheques returned back uncleared due to any reason. In this connection, FBR Member Customs has directed all Collectors of Customs to enforce the exiting prosecution provisions of the Customs Act 1969 against all importers wherever applicable.
The issue of overstayed goods in the bonded warehouses was discussed in detail during the last Collectors of Customs conference. The notices would be served in all cases where goods have been overstayed and no extension has been granted by the collector concerned. Under the Customs Act, 1969 Collector of Customs can grant extension up to a period of three months where customs official thinks that the overstayed goods may further remain in the warehouses. The FBR is expected to generate handsome amount of revenue as a result of this extraordinary measure. The provision is available in the law, but it would be implemented on national level.
During the conference, some officials pointed out misuse of bonded warehouses by unscrupulous importers/warehouse licensees. The importers removed goods in some cases without payment of leviable duties and taxes. In other cases, there have been reports of substitution of goods at the customs bonded warehouses. Apparently, warehouses have become a means of storing non-duty paid goods and helped importers in speculation and manipulation of markets. There is a need for effective inventory control system and physical checking of the warehouses. At times, numerous bonds are under control of one officer, which makes it impossible for the officer to effectively monitor and supervise all warehouses.
It was also discussed that the control mechanism of warehouses should be automated. Customs must be able to effectively monitor flow of goods into and out of the warehouses, sources added.