Pak-Arab Refinery Limited (PARCO) has challenged the jurisdiction of the Collectorate of Customs (Appraisement), Faisalabad, after receiving a show-cause notice accusing it of violating customs procedures at its public bonded warehouse.
According to sources, PARCO was directed to submit its written reply to the Customs Department by July 3. Instead of responding to the allegations, the state-owned refinery approached the Petroleum Division to seek clarification on whether the Faisalabad Customs Collectorate was legally empowered to initiate proceedings against it.
The Customs Department has alleged that PARCO released petroleum products from its bonded warehouse without completing the mandatory customs clearance process prescribed under the Customs Act, 1969.
The show-cause notice states that PARCO, which operates a licensed public bonded warehouse on Jhumra Road in Faisalabad, is required to use the WeBOC system to verify Ex-Bond Goods Declarations (GDs) before delivering petroleum products. The company is also responsible for processing bond-to-bond transfers and ensuring compliance with customs procedures before goods leave the warehouse.
According to Customs, a review of transactions between January 1 and June 24, 2026, found that PARCO delivered 23.81 million litres of Motor Spirit to Gas & Oil Pakistan Limited without verifying Ex-Bond GDs through WeBOC.
The notice further alleges that the products were delivered before the filing of Ex-Bond GDs and payment of applicable duties and taxes. Customs maintains that these actions delayed the recovery of government revenue and, in some instances, resulted in incorrect collection of the Petroleum Development Levy (PDL).
The department has alleged violations of Sections 97, 99 and 116 of the Customs Act, 1969, read with Rule 468 of the Customs Rules, 2001. It has asked PARCO to explain why its public bonded warehouse licence should not be cancelled, in addition to any other action available under the law.
The refinery has not publicly responded to the allegations. Its initial response has focused on challenging the jurisdiction of the Customs Collectorate, with the matter now expected to proceed after the government’s review.
