GOVERNMENT OF PAKISTAN

COLLECTORATE OF CUSTOMS (APPRAISEMENT)

CUSTOM HOUSE, KARACHI. 

NO.SI/MISC/10/94-Audit.                                                                Dated: 19.2.1995

STANDING ORDER NO: 3/1995-(APPRAISEMENT)           

SUB:  STREAMLING THE WORKING OF INTERNAL AUDIT.

The Audit Section was re-organized and entrusted to perform various functions including post-audit scrutiny of the bills of entry and files vide Office Order No. 3/94(A) dated 13.7.1994. In order to further streamline the working of Audit Section, the following instructions are issued:-

(A)       CONSTITUTION OF AUDIT SECTION:

(i)       The Audit Section shall consist of 12 Units. The first 10 Units will concerned to the 10 Groups of the Appraising Collectorate. Each Unit shall deal with the bills of entry, files and any matter relating to the corresponding Appraising Group. They shall also maintain copies of notifications / public notices / orders pertaining to their respective Appraising Groups.

(ii)    Auction files and reward files shall be dealt with exclusively by Unit.-1 in addition. Post audit of Bank Guarantees, Insurance Guarantees, Indemnity Bonds, Undertakings, refund files etc., shall be done by the respective Unit.

(iii)       The matters relating to CRA shall be deal by Unit 11. The receiving/dispatch and administration / establishment work shall be done by Unit 12.

(B)       HANDLING OF BILLS ENTRY IN AUDIT SECTION.

(i)       The original bills of entry shall be collected from the Accounts Section against cash Nos. etc. next day from the date of payment of taxes or assigning free Nos. as the case may be. The bills of entry shall be routed unit-wise and delivered to each Unit of the Audit on the next day. Similarly, duplicate bills of entry shall be furnished to the concerned Unit the next day after their receipt from Sheds / Gates.

(ii)      The cash Nos. of missing bills of entry shall be conveyed to Assistant Collector of Customs (AIB) on daily basis for investigation and tracing out the same.

(iii)       Only those bills of entry shall be retained it the Appraising Group for which Custom House intends to initiate prosecution.

(iv)      Each Unit shall return the bills of entry within 10 days and retain photo­copies of the bills of entry selected for audit-related investigation and issuance of demand.

(v)      Quite often the Appraising Groups requisition the original bills of entry. Audit Section shall provide only photo-copies of the original bills of entry. However, in special circumstances the original bills of entry shall be provided only if the requisition is signed by an officer not below the rank of Assistant Collector indicating the specific reasons for demanding the original bill of entry instead of its photo-copy.

(vi)       Duplicate bills of entry required for taking' delivery of the partially consignments shall be delivered to the Clearing Agent only when the application is referred by the gate officer to PA-Audit.

(C)       RAISING AND PROCESSING OF AUDIT OBJECTIONS.

(i)         The audit objections shall be prepared in duplicate by the staff of Audit Section. The original copy of the objection shall be placed in the file to be opened by the Deputy Superintendent (Audit Section) for further necessary action (e.g. calling documents, issuing demands etc.).Each unit shall furnish a statement to PA (Audit) on each Saturday showing the details of demand notices issued and cases finalized during the week.

(ii)        The duplicate of copy of the objection shall be pasted in the register maintained by each section showing the following particulars:

(i)        S.No.                                      (ii)        File No.

(iii)       Cash No. & Date                  (vi)       Importer’s name

(v)       Clearing Agent No.              (vi)       Amount involved

vii)       Audit observation/objection 

(a)          FINANCIAL CEILING FOR RAISING DEMANDS.

The following shall be the financial limitations for the purpose of issuing demand under section 32(3) of the Customs Act, 1969.

PA-AUDIT     =

            upto                Rs.One lac

AC-AUDIT     =          over                Rs.One lac uptoRs. Two lacs

DC-AUDIT     =          over                Rs.twolacsuptoRs. Ten lacs

Collector        =          over                Rs.10 lacs

(E)       PRE-AUDIT.

Pre-audit of the files shall not be done unless specifically ordered by an officer not below the rank of Deputy Collector.   

(F)       TRANSMISSION OF BILLS OF ENTRY / FILES TO CRA.

All the bills of entry and files after post-audit shall be sent to CRA at least two -others before the expiry of limitation period of six months laid down under section 32 (3) of the Customs Act, 1969. On return of these documents, the bills of entry shall sent to MCD and files to the Record Section.

(G)      WEEKLY STATEMENT & RESPONSIBLTIES OF DEPUTY SUPERINTENDENT (AUDIT SECTION).

(i)         The Deputy Superintendent shall get the weekly statements from the Audit Staff regarding;

(a)  Bills of entry short supplied / cancelled by the Cash and Accounts Section.

(b)  Bills of entry short supplied to CRA.

(c)  Bills of entry received short from CRA.

(d)  Bills of entry supplied short to MCD. 

(ii)        Deputy Superintendent (Audit Section) shall compile the information and furnish consolidated statement to the Auditor on first week of each month.

(i)            The Deputy Superintendent shall maintain a master register and open the files of the Internal Audit. He shall supervise the receipt / dispatch work Unit-12 and ensure that no file is kept unattended.

(ii)          He shall furnish statement on first week of each month regarding the demands issued and recoveries made. He shall also furnish statements required by the statistical Section / AIB etc on prescribed formats.

(H)       DISPOSAL OF CRA OBJECTIONS

a.            All the CRA objections shall be received in Unit-11 of the Audit Section. The Unit shall assign File No. and note the particulars of the objections in the master register incorporating the following information.

(a)       Audit File No.            (b)       CRA   file No.

(c)        Importers Names     (d)       CHAL No.

(e)       Cash No. & Date     (f)        Amount involved

(g)       Objection

 (ii)        Complete text of the CRA objection shall be noted in the master register or photo-copy of the objection shall be pasted in the register.

iv)      The files shall be sent to the Assistant Collector Incharge of the concerned Groups / Sections for issuing demand and passing orders after fulfilling the formalities of adjudication process. 

v)     However, if the period for time bar operation is less than 7 days, the demands shall be issued by the Principal Appraiser/Assistant Collector (Audit Section) and send the file to the concerned Assistant Collector of Customs (Group) for adjudication. 

vi)   Copy of demand notice shall invariably be endorsed to CRA. If CRA objection is contested, reply shall be sent through Audit Section enclosing copies of the relevant notifications / orders making the basis of the reply.   

vii)   CRA objections and replies sent by the Groups shall be fed in the Personal Computer of the Audit Section. 

viii)    A progress report in the format prescribed below shall be provided to Audit Section on 5th of each month.

(I)                   DISPOSAL OF CRA CASES PERTAINING TO GROUP.

S. No.	CRA File No. Audit File No.	Cash No. and date	Amount involved	Demand notice issue date
(01)	(02)	(03)	(04)	(05)

 

Objection Admitted	O-in-O issue date	Amount recovered	Objection settled	Remark
(06)	(07)	(08)	(09)	(10)

vii)       The Audit Section will continue to deal with advance paras, proposeddraft paras in consultation with the relevant Groups / Sections as usual.

(J)  EXTENT OF AUDIT.

Each audit unit shall inspect 100% bills of entry and connected documents / files presented for auditing. The detailed audit shall, however, be conducted on selectivity basis which shall not less than 20%. The staff deputed shall affix stamp “Audited” and sign the bills of entry selected for detailed scrutiny.

(K)  MISCELLANEOUS.

(i)    The staff deployed for the receipt and delivery of the bills of entry is responsible for their distribution among the various Units and delivery to CRA as the case may be.

(ii)      Superintendent Audit shall deal with administration and establishment work. He shall circulate the SROs, CGOs, Public Notices, Office Orders, among the staff and keep its record. He shall also be responsible to submit to the Assistant Collector (Audit) a weekly written report regarding work progress by the audit section.

(iii)         On transfer, the staff of the Audit Section shall be relieved on after handing over the relevant record.

Signed by

 (Muhammad Ramzan)

Collector

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