GOVERNMENT OF PAKISTANMODEL CUSTOMS COLLECTORA TE OF APPRAISEMENT (EAST)

CUSTOM HOUSE, KARACm

~{~-FBRPAKISTAN

C. No.-42/KAPE/PCT/2016 Dated.r ) .05.2018

PUBLIC NOTICE No. C 2, 120I8-MCC(E)

SUBJECT: CLASSIFICATION OF 3-WHEELER CARGO LOADER INDISMANTLEDIUNASSEMBLED CONDITION

FACTS:

Model Customs Collectorate, Appraisement (East) forwarded a reference for the

classification of the 3-wheeler cargo loader (dismantled/un-assembled condition) imported by

various importers under declared PCT heading 8704.3150. The Collectorate was of the opinion

that 3-wheeler cargo loaders in dismantled/un-assembled condition is not classifiable under the

PCT 8704.3150 as this heading is exclusively for the 3-wheeler cargo loader in CBU condition.

Moreover, the Collectorate was of the view that the PCT heading 8704.3140 (Components for

the assembly/manufacture of 3-wheeler cargo loader, in any kit form) is exclusively for the

purpose of the classification of the components for the assembly/manufacture of 3-wheeler cargo!

loader imported under SRO-656(I)/2006 dated 22-06-2016 by an importer registered with the ( h\~'

\Engineering Development Board (EDB). The Collectorate is of the opinion that the components

for the assembly/manufacture of 3-wheeler cargo loader imported without the quota of the

Engineering Development Board (EDB) are classifiable under PCT Heading 8704.3190

attracting Customs Duty @60%. The goods .were released provisionally and the matter was

referred by the clearance Collectorate to Classification Committee for determination of

appropriate PCT heading of the subject goods for uniform assessment.

PROCEEDINGS

2. The matter was considered by the Classification Committee in meetings held on

lO-0~-2018 and 07-04-2018. However, as representative of Engineering Development Board

(EDB) did not attend the meetings, therefore, it was decided to call another meeting so that view.point of EDB being the regulatory authority under Ministry of Industries and Production could

also be discussed in the Classification Committee. The third and last meeting was held on 04-05-

2018. Engr. Roshan Lal (Manager South) EDB attended the meeting. The representati:e?f th I/"'j,~.

O\L- --.~I;

\ Pagelof4 ~~.(~» ~ -f\ I ~~•. fil}, ~ \ V '" hv&LH . tt .'gO ~\ ~Jllfrl ~ I (1I·~ ,. Mohammad Aamlrf.> ( ~ I ~.)' ~.~ General Secretary, ,

Karachi Customs Agents Association

Collectorate was of the view that the PCT 8704.3140 co ers the import of components for the

assembly/manufacture of 3-Wheeler cargo loader in an kit form and PCT 8704.3150 covers the

import of 3-Wheeler cargo loader in CBU condition. arious importers/manufacturers have been

classifying 3-Wheeler cargo loader in dismantled/un-assembled condition under PCT heading

8704.3140 and 8704.3150 attracting customs duty @50% whereas the Collectorate is of the

opinion that the same is correctly classifiable under PCT heading 8704.3190 (- - - others),

attracting custom duty @ 60%.

3. The importers forwarded the following arguments to seek the classification of the

goods under PCT heading 8704.3140:

1. Classification is to be determined according to the terms of heading and

independent of any quota under any SRO, as quota under any SRO cannot alter

the classification of the goods.

11. The goods i.e. 3-Wheeler cargo loader imported in dismantled/ SKD/CKD

condition are correctly classifiable under PCT heading 8704.3140 in terms of

Rule- I of General Rules of Interpretation.

lll. Classification of the subject goods under the PCT heading 8704.3190 will violate

the spirit of the condition of the Import Policy Order, 2016 that the components

for the manufacture of any vehicle can only be imported by an importer registered

with the Ministry of Industries & Production.

4. The representative of EDB Engr. Roshan 'Lal informed the Classification

Committee that EDB issues the quota for import of components of 3-Wheeler Cargo loader, by

importer cum assembler and manufacturer under SRO 656(I)/2006 dated 22-06-2016 under PCT

heading 8704.3140.

ISSUE:

5. Whether 3-wheeler cargo loader in un-assembled dismantled condition or in

SKD/CKD condition is classifiable under PCT Heading 8704.3140 as claimed by the importers

or to be classified in PCT Heading 8704.3190 as determined by the Collectorate or any other

appropriate heading ofthe Pakistan Customs Tariff.

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'.

PRODUCT ANALYSIS:

6. Examination reports and images of the consignments have been analyzed.

Imported consignments contain all the parts for assembly/manufacture of the 3-Wheeler Cargo

Loader and the consignments are in completely dismantled condition. On further probe, it was

revealed that components would be assembled without any further processing such as welding

etc.

LAW AND ANALYSIS:

7. At the outset, the Classification Committee observed that Classification has to be

determined according to the terms of heading, relative Section or Chapter Notes, General Rules

of Interpretation and WCO guidelines given in Explanatory Notes. Classification of goods is

irrespective of duty exemptions or importability matters.

9. The Committee then considered the PCT Code 8704.3190t''--Other '. The

Collectorate has assessed the subject goods in this PCT Heading. The Committee observed that

as per General Rules of Interpretation 3(a), the heading which provides the most specific

description shall be preferred to headings providing a more general description. Therefore, this

subheading covers goods which are not specified elsewhere in other sub headings of H S Code

87.04. The subject goods i.e. 3-wheel cargo loader in dismantled condition consisting of

components for the manufacture of 3-wheel loader is specifically mentioned at PCT heading

8704.3140. THerefore, PCT heading 8704.3190 "- - - Other" is also excluded being not specific

to the subject goods. The Committee also discussed Collectorate's viewpoint regarding SRO

656(1 )/2006 with regard to the classification as given in para 1 above and was of the opinion that

determination of appropriate classification is independent of any SRO.

8. First, the Classification Committee considered PCT Code 8704.3150 as declared by

importers. This PCT is for "- - - 3-Wheeler Cargo Loader (CBU)". The Committee was of the

opinion that since the subject goods are norin CBU condition which is specifically mentioned in

description ofPCT 8704.3150 therefore PCT Code 8704.3150 is excluded in terms of GRI-I.

10. The Committee than discussed PCT Code 8704.3140. This PCT Code covers

Components for the assembly / manufacture of 3-wheeler cargo loader, in any kit form. The

committee analyzed the argument that PCT 8704.3140 is exclusively for the purpose of the

classification of the components for the assembly/manufacture of 3-wheeler cargo loader. Since

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subject goods are not in CBU condition and rather declared by various importers as Components,

kit, unassernbled, dismantled, CKD/SKD, therefore most appropriately classifiable in PCT code

8704.3140.

HOLDING:

11. The subject goods i.e. c0r:tponents for the manufacture of 3-wheeler cargo loader,.3-wheel cargo loader in dismantled/un-assembled condition or 3-Wheeler cargo loader in

CKDISKD condition is appropriately classifiable under PCT Heading 8704.3140 of the Pakistan

Customs Tariff in terms of General Rules of Interpretation-I and 3(a).

12. The above decision is based upon the documents and information provided to the

classification Committee and shall be treated as annulled, if it is found, at any subsequent stage,

that the same was obtained by providing incorrect, false, misleading or incomplete information.

/-

(Mo ~ ooz} ....Additiona ctO'r-IV

Chairperson ClassificationCommittee

Distribution:

1. PS to Member (Customs), FederaL Board ofRevenu~, Islamabad.2. The Chief Collector of Customs (Appraisement-South), Custom House, Karachi.3. The Chief Collector of Customs (Enforcement-South), Custom House, Karachi.4. The Chief Collector of Customs (CentrallNorth), Custom House, Lahore/Islamabad.5. Director General ofIntelligence & Investigation-FBR, Mauve Area-I, G-I0/4, Islamabad.6. The Chief (Tariff), Customs Wing, Federal Board of Revenue, Islamabad.7. The Collector, MCC Appraisement (East/West/Port QasimlPreventive), Custom House,

Karachi.8. The Collector of Customs Adjudication I & II, Custom House, Karachi9. The Collector MCC (Adj/Appeals), LahorelFaisalabadlRawalpindi/Peshawar/Quetta.10. Mis. Senior Automobiles (Pvt) Ltd, 7-A, Punjab Small Industrial Estate, Kotiakhpat,

Lahore.11. Mis. New Asia Automobile (Pvt) Ltd, 18.5 Km, Sheikhpura Road, Lahore12. Mis. Super Rozgar Motorcycle, Office & Shop No.6, Showroom, Main RCD Highway,

Bilmuqabil Attock CNG Pump, Hub Chowki, District Lasbella./. The Karachi Customs Agents Association, Custom House, Karachi.'14. Notice Board15. Master File

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