GOVERNMEN OF PAKISTAN
APPRAISEMENT COLLETORATE
CUSTOM HOUSE, KARACHI
NO. PCT/CC/08/2001-A Dated: 12-06-2001
Mr. S. Shahanshah Hasnain
Secretary, Central Board of
Revenue, Islamabad.
SUB: DETERMINATION OF PCT HEADING FOR “READY TO INSTALL COOLING AND REFRIGERATION EQUIPMENT FOR POULTRY PROCESSING PLANT”.
Kindly refer to Board’s letter No. 1(369)March/2000 dated 23.04.2001 on the above noted subject. The Classification dispute of the above noted machinery was discussed in the PCT Committee meeting held on 26.05.2001 and 02.06.2001.
Importer stated that,
i) The chilling Plant is imported for installation with the main poultry plant as is evident from the drawings of the plant.
ii) At the time of cutting/packing of the poultry meat the required temperature of the area should be between 9 C to 12 C, to minimize the growth of bacteria. Therefore, the subject refrigeration equipment is essentially required to be installed alongwith the plant.
iii) The refrigeration equipment is part and parcel of the plant, therefore, it should be classified alongwith the plant under H.S. Code 8438.5000.
iv) A foreign investment is made in this plant by a Belgium based company, therefore, the wrong classification will ultimately affect the stoppage of the further foreign investment in the country.
v) That the chilling unit of the plant was imported on the recommendation of the same supplier from M/s. Grasso, who designed the cooling plant which is suitable to be installed along with the plant.
2. The importers contention, that the goods should be treated as a complete plant for poultry meat processing, was in fact based on Section Note 4 of the Section XVI of the Harmonized coding system which inter-alia states as under:
“where a machine (including a combination of machines) consists of individual components (whether separate or inter connected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.”
3. During the discussion on 02.06.2001 It was observed that the text of PCT heading 8438, states that machinery, not specified or included elsewhere in this chapter is classifiable under PCT heading 84.38. It was unanimous view point of the PCT Committee that the Refrigeration Machinery is specified under PCT heading 8418.6900, therefore, it falls out side the scope of PCT heading 84.38.
PCT Committee further observed, that the subject note is applicable for the Machinery and not for the complete plant. The similar situation was discussed in CGO 18/74 dated 22.10.1974, wherein the classification of “Water electrolyzer plant” was discussed and it was ruled that individual components of the plants if not mounted on common base would be assessed under its own appropriate headings (Annexure-A). It was also observed that the PCT heading 84.34, which cover the machines for processing the Milk, excludes the refrigerating appliance (whether or not specially designed for cooling or keeping milk). Which further endorses findings as narrated in the CGO 18/74. Reliance was also made on Public Notice No. 4/89 (A) dated February 1989 (Annex-B) wherein the classification dispute of Power plant based on steam was discussed and it was ruled that all the individual components of the plant will be classified under their own respective PCT headings. Even if the argument of the importer that the refrigeration plant is a part of whole poultry plant is accepted the classification of the same remains in heading 84.18 by virtue of chapter Note 2 to chapter 84 of H.S. Code.
4. In view of the above discussion the PCT Committee has opined that the goods namely “Ready to Install Cooling and refrigeration equipment for poultry processing” whether imported together with the main plant or separately are correctly classifiable under PCT heading 8418.6900.
(Signed by)
(SHAHID AHMAD)
COLLECTOR