GOVERNMENT OF PAKISTAN

GOVERNMENT OF PAKISTAN

CENTRAL BOARD OF REVENUE

NOTIFICATION

Islamabad, the 7th August, 1996

CUSTOMS

S.R.O.663(I)/96.- In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of 1969), read with section 82, 112, 169, 201 thereof, and in suppression of its Notification No. S.R.O.1228(I)/80, dated the 1st December, 1990, the Central Board of Revenue is pleased to make the following rules, namely:-

Short title and commencement.- (1) These rules may be called the Registration of Auctioneers and Auction Procedure Rules, 1996.

(2) These shall come into force from the 1st day of October, 1996.

2. Definitions.- In these rules, unless there is anything repugnant in the subject or context,-

(a) "Act" means the Customs Act, 1969 (IV of 1969);

(b) "auctioneer" means an auctioneer registered under rule 6;

(c) "bid" means the price offered at an auction by a bidder for goods separately or in lots or a combination of lots of goods put to auction;

(d) "bidder" means the person who gives a bid;

(e) "Collector", "Additional Collector", "Deputy Collector" and "Assistant Collector", respectively, means Collector of Customs, Additional Collector of Customs, Deputy Collector of Customs and Assistant Collector of Customs appointed under section 3 of the Act in relation to an area;

(f) "offer" means a private offer or tender submitted before the auction or after the completion of bidding or acceptance of the bid; and

(g) "offer" means the person who offers a private offer of a tender.

3. Application for registration of auctioneer.- The Collector may invite applications for registration of persons as auctioneers by giving public notice in at least three leading newspapers printed in English, Urdu and any local language of the area.

4. Application to be made to the Collector.- Any person who is qualified under rule 5 to be registered as auctioneer may apply to the Collector in response to the notice given under rule 3.

5. Qualification for registration.- A person is qualified to be registered as auctioneer if he,-

(a) is a citizen of Pakistan;

(b) is not less than thirty years of age;

(d) has an established office in Pakistan;

(e) is certified by a scheduled bank to be financially sound;

(f) is a member of the Chamber of Commerce and Industry; and

(g) is an income tax assessee.

6. Registration of auctioneers.- All applications received in response to a public notice published under rule 3 shall be placed before a Selection Committee consisting of the Collector, Additional Collector (Incharge of Auction), and Deputy Collector or the Assistant Collector (Concerned), which may select not more than four persons for registration as auctioneers for the Collectorate of Appraisement, Custom House, Karachi, and two or more persons for registration as auctioneers for every other station of auction and the persons selected shall on furnishing surety bond and a bank guarantee under rule 7, be registered as customs auctioneers for the specified station.

7. Auctioneer to furnish bank guarantee, surety bond, etc.- A person selected for registration, shall furnish to the Collector a surety bond in the name of the President of Pakistan as given in the Schedule on a judicial paper for good conduct in the performance of his duties as auctioneer and shall also furnish a bank guarantee for a sum of fity thousand rupees which shall be discharged on the satisfactory termination of the term of his registration.

8. Validation of registration.- The registration shall be valid for a term of five years from the date of registration.

9. Cancellation of registration, etc.- (1) On any complaint made against an auctioneer, or where the Collector is not satisfied with the work of the auctioneer, the Collector, may, after giving an opportunity of being heard to the auctioneer, withdraw any auctioneering work allotted to him or suspend such work and debar him from further registration for a specific period.

(2) An auctioneer aggrieved by an order passed under sub-rule (1) may appeal to the Central Board of Revenue whose decision shall be final.

(3) An auctioneer may apply for cancellation of registration after giving at least three months notice to the Collector.

10. Extension of term.- An auctioneer may be re-registered after the expiry of his term or extended term or the period for which he was debarred under rule 9, as the case may be.

11. Approval of goods for auction.- (1) As soon as the goods at any place in the custody of any person have reached the stage of being sold under the Act, or in the opinion of such person are required to be sold by auction, shall be brought to the notice of the Deputy Collector or the Assistant Collector or the area concerned by that person giving a list of such goods.

(2) The Collector shall, on receipt of such information or on his own motion, pass orders directing the sale of goods referred to in sub-rule (1), after giving due notice to the owner under relevant provisions of the Act, by public auction either departmentally or through an auctioneer and shall cause the reserved price of the goods to be auctioned to be determined in accordance with the provisions of section 25 of the Act, and any duties or taxes which would have been payable under clause (c) of sub-section (2) of that section on the date of fixation of the reserve price of such goods for auction thereof shall be added to this value:

Provided that where the condition of the goods has, for any reason, deteriorated, the reserved price shall be the value as is re-appraised by the appraising authorities of the Customs Department and approved byt he Deputy Collector or the Assistant Collector. The reserve price shall consist of the appraised price, duties and taxes and other charges.

(3) The following goods shall not be put to auction and be sold or disposed off in the manner as prescribed by the Board,--

(i) Arms and ammunition.

(ii) Liquor/Narcotics and like goods.

(iii) Confiscated books, written material which is obscene, sub-versive, anti-state or anti-religion.

(iv) Transit goods excluding confiscated goods.

(v) Diplomatic cargo excluding confiscated goods.

(4) No goods shall be withheld from auction unless --

(i) a court of law issues a specified stay order against such auction;

(ii) the Collector of Customs or the Additional Collector of Customs incharge of auctions orders withholding such auction; or

(iii) the Deputy Collector or the Assistant Collector incharge of auctions orders with holding

such auction, for reasons to be recorded in writing.

12. Value of goods which may be auctioned.- All goods, the aggregate appraised value or the reserved price of which does not exceed one million rupees, may be sold by public auction conducted departmentally at the discretion of the Collector, and all goods, the aggregate appraised value or the reserved price of which exceeds one million rupees, shall be sold by public auction through an auctioneer:

Provided that perishable goods may be sold by the Collector through public auction or a private offer irrespective of its value.

13. Nomination of auctioneer.- The Collector or an officer authorized by him in this behalf shall, by writing under his hand, nominate an auctioneer from amongst the registered auctioneers to conduct auction in respect of the goods referred to in rule 13 and shall give him notice of not less than fifteen days in advance of the place at which and the date on which auction of such goods shall be held.

14. Duties of nominated auctioneer.- The auctioneer nominated under rule 13 shall --

(a) make or cause to be made under his supervision and in the presence of an officer authorized by the Collector a detailed inventory schedule of all the goods to be auctioned;

(b) notify the following by giving advertisement in classified columns of one English and one Urdu daily at least seven days in advance of the date of auction, specifying --

(i) the date, time and place of auction in block letters; and

(ii) the generic description of goods to be auctioned;

Provided that no advertisement or public notice in newspapers shall be required in respect of left over of any schedule or goods already notified which goods may be put to re-auction on display of notice on Notice Board at least two days before the date of auction of such goods;

(c) send a complete inventory or schedule of such goods to all Chambers of Commerce and Industry and to other Associations of importers/traders in that area; and

(d) display such goods or samples thereof at a place or places and in the manner acceptable to the Collector.

(2) All expenses incurred on publicity, preparation of files, schedule of auction and its distribution, display of goods and issuance of delivery orders on final acceptance of a bid or private offer by the competent authority shall be borne by the auctioneer.

15. Commission to which auctioneer shall be entitled.- (1) The auctioneer shall be entitled to a commission on the net proceeds at the rate of ---

(a) on the first one million rupees, one per cent of the proceeds; and

(b) on the amount exceeding one million rupees, half per cent of the proceeds so exceeding:

Provided that the auctioneer shall not be entitled to any commission on any guarantee or earnest money forfeited for non-payment of the balance of the amount of a bid by the successful bidder or on auction through departmental procedures or private offer or on the differential of auction proceeds enhanced by the bidder through the efforts of any officer of the department or as a consequence of rebinding by the competent officer.

(2) The cost of advertisement, sales or delivery of goods, etc., may be deducted from the payable commission by the authorized officer in case of failure of the auctioneer to discharge his functions satisfactorily.

16. Goods may be auctioned in lots.- All goods may be put to bid in convenient lots so as to obtain the highest possible bid:

Provided that the Collector or an officer authorized by him in this behalf may order auction of the goods in combination of various lots or otherwise.

17. Qualification for bidder/tenderer.- A person can participate in the auction by way of open bid/tender/private offer/rebinding if he:

(a) Omitted.

(b) holds a valid National Identity Card/Company registration certificate and submits a copy thereof;

(d) observes the discipline and obeys these rules.

18. Auction to be conducted by or under supervision of auctioneer.- An auction shall be conducted by the auctioneer personally or, under his direct supervision, by one of the members of his staff or, with the prior permission of the Collector in writing, by any other person appointed by the auctioneer in this behalf, in the presence of Deputy Collector or an Assistant Collector or any other officer appointed by the Collector for this purpose as per following procedure:-

(i) Before the start of bidding the Auctioneer shall announce the lot number/combination of various lot numbers and the details of the goods. The auctioneer must also describe the procedure and rules prior to the start of auction.

(ii) All auctions shall be on "As is where is" basis. All kind of goods shall be sold as lot on weight basis. However, all kinds of scrap, metal, rubber/plastic, paper, chemicals, betel nuts, bidi leaves, etc., shall invariably be auctioned and sold on WEIGHT BASIS. Therefore all bidding shall be metric tonne or per kilogram. In all cases where the goods are sold on WEIGHT BASIS the weight shall be GROSS WEIGHT and no refund for tare shall be allowed.

(iii) In case of goods auctioned on lot basis the approximate weight and the number of packages shall also be mentioned to facilitate identification and delivery of lots/goods. However, excess weight than mentioned in the assessment sheet shall not be delivered except on payment of the differential amount so worked out.

19. Manner of Auction.- The auction shall be conducted in the following manner:-

(i) The first bid shall be not less than 30% of the reserve price notified before or at the time of auction.

(ii) The bid amounts and the names of the highest and second highest bidders shall be recorded in the file by the Customs staff supervising the auction alongwith its copies of National Identity Card as well as N.T.N. of the successful bidder.

20. Earnest money payable.- Twenty five percent of the amount of the highest bid given at an auction shall be payable by the bidder in each case as earnest money immediately after the fall of the hammer failing which the bid will be cancelled and the goods may be sold to the second highest bidder or the higher offer or re-auctioned, as deemed appropriate.

21. Amount of bid to be paid in office.- The balance of the amount of bid shall be paid by the successful bidder in cash or through bank draft in the National Bank/Treasury as prescribed by the Collector, within a period of seven days excluding holidays, of the final acceptance of the bid:

Provided that an officer not below the rank of Additional Collector may extend the period by not more than seven days, on case to case basis if he considers it to be fit and appropriate.

22. Earnest money to be forfeited.- If the balance of the amount of the bid is not paid within the period or extended period specified in rule 21, the earnest money shall be forfeited in favour of the Federal Government, and the goods may be sold by auction or otherwise.

23. Auction through tender or offer.- The bidder or offerer as defined in rule 2, may participate in auction by way of submission of sealed tender/private offer indicating the lot number and enclosing a pay order equal to atleast twenty-five per cent of the bid/private offer, in the name of Collector of Customs. The sealed tender/private offer may be opened by the competent authority in presence of the successful bidder in the open auction. This tender/private offer may be accepted by the competent authority if the private offer is higher than the final bid amount in open auction.

24. Omitted.

25. Omitted.

Provided that in case of rebidding, the private offer/tender received should be higher atleast by five per cent or rupees twenty five thousand than the bid in the open auction and the private offer/bidder provides sufficient security/pay order not less than thirty per cent of the private offer/tender. The guarantee/earnest money shall be refunded to the original bidder if he does not succeed in the rebidding.

26. Auction of perishable/hazardous goods.- Notwithstanding the provisons of these rules, the Deputy Collector or the Assistant Collector (Auction) after obtaining approval of the Collector may sell the perishable/hazardous goods through private offers or open auction at any time onthe request of the person under whose possession/control this goods are lying. The approval of sale/bid in such cases shall invariably be obtained from the Collector.

27. Auctioneer to issue delivery order.- (1) The auctioneer shall on receipt of a certificate issued by the Collector or an officer authorized by him in this behalf to the effect that the whole amount of the bid has been realized, issue under his seal a delivery order giving the name and address of the successful bidder, serial number of general Index Register No. 11. Identity Card Number and N.T.N. of the bidder, the date and place of the auction, the number of the lot, full description and quantity of the goods in respect of which bid was accepted and the price at which such goods were sold.

(2) The successful bidder shall present the delivery order issued to him under sub-rule (1) to the person who is the custodian of the goods auctioned and that person shall give delivery of the goods specified in the delivery order against a receipt from the successful bidder under supervision of a customs officer deputed for the purpose. In case of any dispute regarding delivery of the goods, the decision of the competent officer who had accepted the bid offer shall be final subject to appeal as prescribed under the relevant provisions of the Act.

28. Acceptance of bid.- (1) A bid given at auction shall be subject to acceptance by the Collector or the Additional Collector (Incharge Auction) or Deputy Collector/Assistant Collection (Auction), as the case may be, but the bidder shall have no right o withdraw his bid without the permission of the officer supervising the auction.

(2) Where the amount of the highest bid given at an auction is upto eighty per cent of the reserved price, the Deputy Collector/Assistant Collector (Auction) may accept the highest bid after satisfying that the reserved price and the quantity/condition of goods are appropriate.

(3) Where the amount of the highest bid given at an auction is upto sixty per cent but less than eighty percent of the reserved price, the orders of the Additional Collector shall be specifically obtained.

(4) In case where the amount of the highest bid is less than sixty per cent of the reserved price the orders of the Collector shall be specifically obtained:

Provided that such orders shall be passed within ten days of the date of receipt of twenty-five per cent of the bid amount as earnest money or in such extended period as required in certain cases where an inquiry or test is involved.

29. Refund of Adjustments.- (1) The amount of the earnest money shall be adjusted towards the final payment of the whole amount of the bid, but where a bid is not accepted by the appropriate authority, the amount of the earnest money shall be refunded to the bidder.

(2) The balance amount in case of less weight than announced weight shall be refunded to the bidder on application after completion of delivery provided the goods had been auctioned on weight measurement basis i.e. per tonne/kg/litre/meter, etc.

30. Power of Collector to cancel auction, etc.- (1) Notwithstanding any thing contained in these rules, the Collector may --

(i) cancel the whole proceeding of an auction without assigning any reason;

(ii) accept or reject any bid or offer or auction at any time before the goods are delivered to the successful bidder/private offerer. He may also recall the proceedings and recover the goods even after delivery of goods it is proved that there has been a deliberate attempt to cause loss to the public exchequer; and

(iii) restrict or refuse the entry of persons to the premises where an auction is held or their taking part in the auction.

(2) Notwithstanding the procedures prescribed above, the Collector may issue such general or special orders, regulating the auction as he thinks fit in order to safeguard the public interest.

SCHEDULE

( See Rule - 7 )

SURETY BOND

BY THIS BOND I/WE ____________________of____________________(hereinafter called the obligee (s) am/are held and firmly bound/jointly and severally to the President of Pakistan through the Collector of Customs,___________________(hereinafter called the obligor) for the payment to him a sum of Rs. 50,000 (Fifty thousand rupees) as agreed and liquidated damages and not as a penalty;

WHEREAS the obligor has appointed the obligee (s) as Customs Auctioneer(s) under and for the purposes of the Registration of Auctioneers and Auction Procedure Rules, 1996, upon the condition that the obligee (s) should enter into a surety bond for the payment to the obligor of sum of Rs. 50,000 (Fifty thousand rupees) as liquidated damages and not as a penalty conditioned as hereinafter provided;

NOW THE CONDITION of the above surety bond is that if the obligee (s) and his/their executor or administrator at all times during the continuance of his/their appointment as Customs Auctioneer (s) under and for the purposes of the Registration of Auctioneers and Auction Procedure Rules, 1996, perform (s) his/their duties faithfully, diligently and in an incorrupt manner in relation to any auction conducted by him/them in accordance with the said rules and orders, instructions or directions that may from time to time be given to him/them by the appropriate authorities in this behalf, and makes goods without any delay to the obligor all and every sum of money which becomes due to the Government the above surety bond shall be void, but otherwise the same shall remain in full effect.

IN WITTINESS WHEREOF the parties named above have set and subscribed their hand hereunder together with their respective seals in the presence of the witness named below, this _________the day of _________19______.

Signature, name and address of witness Signature, name and address and seal of the auctioneer

Signature, name and address of witness Signature, name and address and seal of the Collector.

PROFORMA OF BANK GUARANTEE TO BE SUBMITTED BY THE AUCTIONEERS UNDER THE

REGISTRATION OF AUCTIONEERS AND AUCTION PROCEDURE RULES, 1996

WHEREAS the Collector of Customs ______________has consented to register M/s ______________as auctioneers for five years with effect from _________. This bank guarantee is furnished for working as auctioneer to the satisfaction of the Collector of Customs as per provisions of the subject rules.

In case M/s ____________________fails to discharge his duties to the satisfaction of Collector of Customs_______________M/s-_______(name of the bank) hereby undertakes to make the payment of Rs. 1,00,000 (one lac) on demand by Collector of Customs_______________ or any officer authorized by the Collector of Customs on this behalf, without objection or reservation or any reference to any other person/body within 7 days of the issuance of the demand.

In case of M/s ______________(name of the bank) fails to make the payment within 7 days of the said demand M/s ______________ (name of the bank) shall be liable to pay compensation at the rate of 20 per cent per annum for the period from the date of expiry of 7 days of the date when actual payment is made in the Collector of Custom's_________account. This bank guarantee is valid until _________. However all claims lodged hereunder will be entertained/accepted by M/s. ________(name of the bank) 12 months after the aforesaid validity date.

[C.No.2(4)-L&P/93]

RAJA M. AKHTAR TAHIR

Chief (Customs)

As amended

S.R.O._____(I)/97, - dated 16.10.1997