18. Goods dutiable.- (1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on,-

(a)   goods imported into Pakistan;

(b)   goods brought from any foreign country to any customs station, and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs-station; and

(c)   goods brought in bond from one customs station to another.

(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on import of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein.

(2)   No export duty shall be levied on the goods exported from Pakistan.

(3)   The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the goods imported or exported, as specified in the First Schedule at a rate not exceeding one hundred per cent of the value of such goods as determined under section 25 or, as the case may be, section 25A.

(4)   The regulatory duty levied under sub-section (3) shall –

(a)   be in addition to any duty imposed under sub-section (1) or under any other law for the time being in force; and

(b)   be leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day.

(5)   The Federal Government may, by notification in the official Gazette, levy an additional customs-duty on such imported goods as are specified in the First Schedule, at a rate not exceeding thirty-five per cent of value of such goods as determined under section 25 or, as the case may be, section 25A:

Provided that the cumulative incidence of customs-duties leviable under sub-sections (1) and (5) shall not exceed the rates agreed to by the Government of Pakistan under multilateral trade agreements.

(6)   The additional customs-duty levied under sub-section (5) shall be,-

(a)   in addition to any duty imposed under sub-sections (1) and (3) or under any other law for the time being in force; and

(b)   leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the official Gazette in which such notification appears is published at any time after that day.

— S. 18 — Classification of goods — Presumption of
validity — Finality of classification by the Board — Scope — Section 18
expressly provides that customs duties shall be levied at such rates as are, inter
alia, prescribed in the First Schedule — The First Schedule contains the
general rules for interpretation of the schedule — Moreover, it provides that
for the purposes of interpretation ‘Explanatory Notes’ to the Harmonized
Commodity Description and Coding System published by the World Customs Organization,
Brussels, as amended from time to time, shall be considered the authentic
source of interpretation — Classification of goods is one of the most basic
functions of the procedure in the context of import or export of goods — It
is a specialized job and technical in nature — It essentially requires
expertise and taking of multiple factors into consideration e.g. examining the
goods, all the relevant documents, understanding the classification aids and
technical literature, etc — The Classification Committee has been established
by the Board pursuant to the guidelines of the World Customs Organization and
the commitments under the Convention — The Classification Committee includes
experts who possess the skills, knowledge and experience in respect of
classification of goods in conformity with the Harmonized System — The Rules
of Interpretation have statutory backing because they form part of the First
Schedule — Likewise, the Explanatory Notes issued by the World Customs Organization
are declared in the First Schedule to be the most authentic interpretation of
its chapters and sections based on the Harmonized System — The Classification
Committee and its classification rulings, therefore, have crucial importance
— There is a presumption of regularity attached to its proceedings and
findings regarding classification of goods — This presumption, however, is
rebuttable if it can be demonstrably shown that the findings are arbitrary,
fanciful and in violation of the Rules of Interpretation, the Explanatory Notes
and other relevant guidelines or principles relating to classification of goods
under the Harmonized System — The First Schedule also declares
that the determination of classification by the Board shall be final — Appellate
Tribunal Inland Revenue nor the High Court can substitute the findings of the
Classification Committee unless they can be shown to be arbitrary, fanciful or
in violation to the applicable rules and principles of interpretation — Appellate
Tribunal Inland Revenue cannot bypass the competent forum i.e. the
Classification Committee nor give a different finding unless it can be clearly
shown that the determination is arbitrary, fanciful and in violation of the
rules and principles relating to classification of goods under the Harmonised
System. [2025
SCLR 17 = 2025 SCMR 121 = 2025 SCP 312]

32. False statement, error, etc.- (1) If any person, in connection with any matter of customs,-

(a)   makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or

(b)   makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer, or

(c)   submits any false statement or document electronically through automated clearance system regarding any matter of Customs knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section.

(2)   Where, by reason of any such document or statement as aforesaid or by reason of some collusion, any duty, taxes or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.

(3)   Where, by reason of any inadvertence, error or misconstruction, any duty, taxes or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice 75:

Provided that if the recoverable amount in a case is less than twenty thousand rupees, the Customs authorities shall not initiate the aforesaid action 120:

Provided further that the aforesaid action shall also not be initiated in case full amount of short paid duty, taxes or other charges are paid voluntarily prior to initiation of audit, inquiry or investigation.

(3A) Notwithstanding anything contained in sub-section (3), where any duty, taxes or charge has not been levied or has been short-levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer’s or exporter’s accounts or by any means other than an examination of the documents provided by the importer or exporter at the time the goods were imported or exported, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice 78:

Provided that if the recoverable amount in a case is less than twenty thousand rupees, the Customs authorities shall not initiate the aforesaid action.

(4)   The appropriate officer, after considering the representation, if any, of such person as is referred to in sub-section (2) or sub-section (3) or sub-section (3A) shall determine any amount payable by him under this Act, which shall in no case exceed the amount specified in the notice, and such person shall pay the amount so determined.

(5)   For the purposes of this section, the expression “relevant date” means –

(a)   in any case where duty is not levied, the date on which an order for the clearance of goods is made;

(b)   in a case where duty is provisionally assessed under section 81, the date of adjustment of duty after its final assessment;

(c)   in a case where duty has been erroneously refunded, the date of its refund;

(d)   in any other case, the date of payment of duty or charge 96;

— Ss. 81 & 32 — Provisional assessment and its implications on subsequent proceedings under section 32 — Scope — Section 81 is an exception to the ordinary mode of assessment under S. 80 — It empowers an officer of customs to provisionally determine the liability where it is not possible for the latter during the checking of the goods declaration to satisfy himself/herself as to the correctness of the assessment of goods made by the importer for reasons that the goods require chemical or other test or a further inquiry — The differential amount is secured by security furnished by the importer of the goods — If the final determination is not made within the time specified under S. 81(2) then the provisional assessment becomes final — The finality is relatable to the assessment and does not affect or bar the subsequent proceedings in connection with recovery of duty, taxes or charge not levied or short levied — The finality of the assessment under S. 81 renders it at par with an assessment made under S. 80 — The finality of assessment under S. 81 makes the provisional assessment final and not the declaration made by the importer — The assessment made under S. 80 does not bar subsequent proceedings in connection with the offence under S. 32 — Would the proceedings be barred under S. 32 if the provisional assessment becomes final under S. 81? — The answer is in the negative and this is implicit from a combined reading of S. 32 — S. 32 is a penal section and describes, under clauses (a) to (c), the acts that would constitute as an offence if done in connection with any matter of customs knowing or having reasons to believe that they are false in any material particular — Sub-sections (2), (3) and (4) of S. 32 provide for the mechanism and machinery for recovering the duty, taxes or charge not levied, or short levied or erroneously refunded within the period specified in each eventuality —  The expression ‘relevant date’ has been defined under sub-section (5) of S. 32 and clause (b) thereof expressly provides that the expression in case of S. 81 means ‘date of adjustment of duty after its final assessment’ — The finality of provisional assessment in terms of S. 81(4) or otherwise would be covered under the expression final assessment used by the legislature in clause (b) of S. 32(5) — The finality of assessment, whether under S. 80 or S. 81, as the case may be, does not preclude invocation of the offence under S. 32, nor proceedings for recovery of duty, taxes or charge that has not been levied, short levied or erroneously refunded within the prescribed time from the relevant date — The finality of assessment under S. 80 or S. 81, as the case may be, is distinct from the offence described under S. 32 and does not bar the proceedings thereunder, provided they are within the limitation period explicitly specified in the case of each eventuality separately. [2023 SCLR 58 = 2023 SCMR 2052 = 2023 SCP 258]

— Ss. 81 & 32 — Provisional assessment and its implications on subsequent proceedings under section 32 — Scope — Finality of assessment under S. 80 or the provisional assessment under S. 81 does not operate as a bar against proceedings relating to the offence described under S. 32 nor relating to the recovery of duty, taxes or charge not levied, short levied or erroneously refunded, provided they are within the limitation period prescribed in the case of each eventuality respectively. [2023 SCLR 58 = 2023 SCMR 2052 = 2023 SCP 258]

81. Provisional determination of liability.- (1) Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79 or 131, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:

Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes bank guarantee or pay order of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty, taxes and other charges over the amount determined provisionally:

Provided further that there shall be no provisional assessment under this section if no differential amount of duty and taxes and other charges is paid or secured against bank guarantee or pay order:

Provided further that no provisional determination of value shall be allowed in those cases where a Valuation Ruling (VR), issued under section 25A, is in field, irrespective of the fact whether any review or revision against such Valuation Ruling is pending in terms of section 25D or relevant rules, as the case may be.

(2) Where any goods are allowed to be cleared or delivered on the basis of such provisional determination, the amount of duty, taxes and charges correctly payable on those goods shall be determined within ninety days of the date of provisional determination:

Provided that the Collector of Customs or, as the case may be, Director of Valuation, may in circumstances of exceptional nature and after recording such circumstances, extend the period for final determination which shall in no case exceed thirty days:

Provided further that any period, during which the proceedings are adjourned on account of a stay order or for want of clarification from the Board or the time taken through adjournment by the importer, shall be excluded for the computation of aforesaid periods.

(3) On completion of final determination, the amount already paid or guaranteed shall be adjusted against the amount payable on the basis of final determination, and the difference between the two amounts shall be paid forthwith to or by the importer, as the case may be.

(4) If the final determination is not made with the period specified in subsection (2), the provisional determination shall, in the absence of any new evidence, be deemed to be the final determination.

(5) On completion of final determination under sub-section (3) or (4), the appropriate officer shall issue an order for adjustment, refund or recovery of amount determined, as the case may be.

— Ss. 81 & 32 — Provisional assessment and its implications on subsequent proceedings under section 32 — Scope — Section 81 is an exception to the ordinary mode of assessment under S. 80 — It empowers an officer of customs to provisionally determine the liability where it is not possible for the latter during the checking of the goods declaration to satisfy himself/herself as to the correctness of the assessment of goods made by the importer for reasons that the goods require chemical or other test or a further inquiry — The differential amount is secured by security furnished by the importer of the goods — If the final determination is not made within the time specified under S. 81(2) then the provisional assessment becomes final — The finality is relatable to the assessment and does not affect or bar the subsequent proceedings in connection with recovery of duty, taxes or charge not levied or short levied — The finality of the assessment under S. 81 renders it at par with an assessment made under S. 80 — The finality of assessment under S. 81 makes the provisional assessment final and not the declaration made by the importer — The assessment made under S. 80 does not bar subsequent proceedings in connection with the offence under S. 32 — Would the proceedings be barred under S. 32 if the provisional assessment becomes final under S. 81? — The answer is in the negative and this is implicit from a combined reading of S. 32 — S. 32 is a penal section and describes, under clauses (a) to (c), the acts that would constitute as an offence if done in connection with any matter of customs knowing or having reasons to believe that they are false in any material particular — Sub-sections (2), (3) and (4) of S. 32 provide for the mechanism and machinery for recovering the duty, taxes or charge not levied, or short levied or erroneously refunded within the period specified in each eventuality —  The expression ‘relevant date’ has been defined under sub-section (5) of S. 32 and clause (b) thereof expressly provides that the expression in case of S. 81 means ‘date of adjustment of duty after its final assessment’ — The finality of provisional assessment in terms of S. 81(4) or otherwise would be covered under the expression final assessment used by the legislature in clause (b) of S. 32(5) — The finality of assessment, whether under S. 80 or S. 81, as the case may be, does not preclude invocation of the offence under S. 32, nor proceedings for recovery of duty, taxes or charge that has not been levied, short levied or erroneously refunded within the prescribed time from the relevant date — The finality of assessment under S. 80 or S. 81, as the case may be, is distinct from the offence described under S. 32 and does not bar the proceedings thereunder, provided they are within the limitation period explicitly specified in the case of each eventuality separately. [2023 SCLR 58 = 2023 SCMR 2052 = 2023 SCP 258]

— Ss. 81 & 32 — Provisional assessment and its implications on subsequent proceedings under section 32 — Scope — Finality of assessment under S. 80 or the provisional assessment under S. 81 does not operate as a bar against proceedings relating to the offence described under S. 32 nor relating to the recovery of duty, taxes or charge not levied, short levied or erroneously refunded, provided they are within the limitation period prescribed in the case of each eventuality respectively. [2023 SCLR 58 = 2023 SCMR 2052 = 2023 SCP 258]