State-owned Pak-Arab Refinery Limited (PARCO) has questioned the authority of the Collectorate of Customs (Appraisement), Faisalabad, instead of directly responding to allegations that it released nearly 24 million litres of petrol without completing the required customs clearance process.
According to sources, PARCO was required to submit its response to the Customs Department by July 3. Rather than addressing the allegations in the show-cause notice, the refinery sought guidance from the Petroleum Division on whether the Faisalabad Customs Collectorate has the legal jurisdiction to initiate proceedings against the company.
The Customs Department has accused PARCO of releasing petroleum products from its public bonded warehouse without fulfilling mandatory customs procedures under the Customs Act, 1969.
According to the notice, PARCO operates Public Bonded Warehouse Licence No. 04/BWH/PUB/2000 at its facility on Jhumra Road in Faisalabad for storing High-Speed Diesel and Motor Spirit. As the warehouse licensee, the refinery is required to verify Ex-Bond Goods Declarations (GDs) through the WeBOC system, process bond-to-bond transfers, and ensure all customs requirements are met before releasing petroleum products.
Customs alleges that between January 1 and June 24, 2026, PARCO supplied approximately 23.81 million litres of Motor Spirit to Gas & Oil Pakistan Limited without verifying the required Ex-Bond GDs through the WeBOC system.
The notice further claims that the fuel was released before Ex-Bond Goods Declarations were filed and before the applicable duties and taxes were paid. According to Customs, these actions delayed the collection of government revenue and, in some instances, resulted in incorrect recovery of the Petroleum Development Levy (PDL).
The Collectorate has alleged violations of Sections 97, 99, and 116 of the Customs Act, 1969, along with Rule 468 of the Customs Rules, 2001. The alleged offences are punishable under Section 156 of the Customs Act.
Based on these allegations, Customs has asked PARCO to explain why its public bonded warehouse licence should not be cancelled, in addition to any other legal action that may be taken under the law.
PARCO has not issued a public response to the allegations. The matter is expected to proceed after authorities determine the jurisdictional issues raised by the refinery.
