GOVERNMENT OF PAKISTAN
COLLECTORATE OF CUSTOMS (APPRAISEMENT)
CUSTOM HOUSE, KARACHI.
NO.SI/MISC/02/89-VII. Dated: __/02/1989.
PUBLIC NOTICE NO. 4/1989-(APPRAISEMENT)
SUB: Classification of 10mw complete power plant based on steam.
The Nomenclature and classification Directorate Customs Co-operation Council Brussels has considered classification of “Tan Mega Watt Power Plant”. Opinion of the Directorate is circulated for general information of all concerned.
2. The plant in question consists of the following main units:-
1. water treatment section (Water softener)
2. boiler
3. steam turbine
4. Generator.
3. The whole is to form a ten megawatt power plant. The boiler generator steam at the pressure required to operate the turbine which acts as a prime mover for the generator to produce electricity. According to the information provided, the plant is to be mounted as one unit on a common base and it is to be imported in different part shipments.
4. The Secretariat has examined the various potential classifications.
(I) In the CCCN (1978 version)
The classification of generating set is dealt with CCCN (1978 Explanatory Note 85.01 (page 1393), the sixth paragraph of which stipulates:
"Generating sets consisting of the generator and its prime mover which are mounted (or designed to be mounted) together as one unit or on a common base (see General Explanatory Notes to Section XVI), are class provided that they are imported together (even if packed separately for convenience of transport). On the other hand, the prime mover and (even if imported at the same time) are to be classified in their separate headings if they are designed to be simply coupled together in such a way as not to form an integral unit or to be on a common base."
Clearly this text must be read in conjunction with general Explanatory Note to Section XVI, to which it refers, and more particularly with Note 4 to that section and its interpretation in the Explanatory Notes. Section Note 4, which governs the class of motors designed to be fitted to machinery or appliances and imported at time as such machinery or appliances, stipulates that:
"Motors and transmission, conveyor or elevator belts, for machinery or appliances to which they are fitted, or if packed separately for convenience of transport, which are clearly intended to be fitted to or mounted on a common bases with the machine or appliance with which they are imported, are to be classified under the same heading as such machinery or appliances'
The General Explanatory Note to Section XVI (page 1160, part (VII) interprets this Note as follows:-
"Electric motors and other power units for machinery of this section are classified with the relative machine:-
Or
(1) provided they are fitted to the machine (i.e. actually in the machine, mounted on the framework, or on a bracket attached to the machine or on a common bases with the machine).
(2) If packed separately for convenience of transport, provided both the following conditions are fulfilled:
(i) the motors must be imported with the relative machines, and
(ii) the machine or its framework must be designed to receive the motor or there must be a common base designed to receive both the machine and the motor"
The article at issue is a set consisting of a prime move (steam turbine, what its oiler and water softener) and a working machine (generator), apparently intended to be coupled together to form a power Plant: However, the various components will be imported in separate shipments, i.e. they will be presented separately and not at the same time. Hence, the first condition, laid down in (2) (i) above, is not fulfilled.
Even if this mandatory condition (components presented separately but at the same time) were satisfied, it would not be sufficient to warrant classification of the engine with the generator if the second condition ("common base special fitting in the bracket, etc.") is not met. It is not enough that the engine and generator be designed be assembled at a later date on a common bracket, since the common base must a specially designed to receive them and must be imported at the same time as the machines themselves.
Directorate, therefore, is of the pinion that each component of the generator set question is classification in its own appropriate heading:
(1) the water softener in CCCN (1978 version) heading 84.18;
(2) the steam boiler in CCCN (1978 version) heading 84.01;
(3) the steam turbine in CCCN (1978 version) heading 84.05;
(4) the generator in CCCN (1978 version) heading 85.01;
It is pointed out that CCCN (1978 version) heading 84.05 (page 1173, second paragraph) states that:
"Boilers not constructed to from an integral whole with steam power units are classified in heading 84.01 even if imported with the power units".
(II) In the Harmonized System (HS).
The plant at issue, which is a set consisting of a prime mover (steam turbine with its boiler and water softener) and a working machine (general), is designed to generate electricity of up to 10 MW and could be regarded as an electric generating set within the meaning of HS 85.02 (page 1336, part (I) which states:
"The expression 'generating sets' applies to the combination of an etc. generator and any prime mover other than an electric motor (e.g. hydraulic turbines, steam turbines, wind engines, reciprocating sets consisting of generator and its prime mover which are mounted (or designed to be mounted together as one unit or on a common bases (see the General Explanatory Note to Section XVI), are classified here provide they are presented together (even if packed separately for convenience of Transport",
In the light of the foregoing and since the prime mover and generator separate and are not presented at the same time, it is felt that each component classifiable in its own appropriate heading:
(1) the water treatment section (water softener) in sub-heading 8421.2
(2) the steam boiler in sub-heading 8402.19;
(3) the steam turbine in Sub-heading 8406.19; and
(4) The generator, presented alone, in one of the sub-headings 850148501.64 depending on the output.
Signed by
(MUHAMAD SULAIMAN)
COLLECTOR
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