GOVERNMENT OF PAKISTAN
MODEL CUSTOMS COLLECTORATE OF
APPRAISEMENT (EAST)
CUSTOM HOUSE, KARACHI.
C.No. MCC/KAPE/Classification/645/2014 Dated: 15thJan.2015.
PUBLIC NOTICE NO. 04 OF 2015
SUB: CLASSIFICATION OF GOODS DECLARED AS RECHARGEABLE FANS.
The Deputy Collector of Customs, Model Customs Collectorate of Peshawar (Dry port), vide letter bearing C.No.Cus/DP/Misc-Val/101/2014/1559 dated 27.10.2014 has referred a case to the PCT committee with details as appearing below:
2. M/s Rafiq Enterprises, AR Enterprises filed GDs PCSI-HC 3960 dated 21.05.2014 and PCSI-HC-3962 dated 21.05.2014 for clearance of imported rechargeable fans in parts and declared them under HS Code 8414.9090. Following goods were found after examination;
(a) Rechargeable Pedestal fans without wings and base
(b) Rechargeable fan base equipped with 02 batteries each, control panel and electric circuit.
3. The imported goods were classified under PCT heading 8414.5120 in terms of Rule 2(a) of the General Rules of Interpretation. Rechargeable fans were being assessed on the basis of Valuation Ruling No. 457/2012. However, since the impugned goods (fans) were in parts and not complete sets rather without blades (wings), therefore, the criteria mentioned in Valuation Ruling No. 384/2011 was adopted and “base” imported by M/s AR Enterprises Peshawar was assessed @ 40% of the value given in Valuation Ruling for rechargeable fans of 18-inches (i.e. US $ 7.664 per piece) and “Pedestals alongwith motor” imported by M/s Rafiq Enterprises were assessed @ 50% of the value of 18 inches rechargeable fans (i.e. US $ 9.58 per piece). Being aggrieved, both the importers filed a representation to review classification of goods, which was examined/ discussed. There was a consensus of opinion that the goods i.e. fan base and pedestal (stand including motors) have been rightly classified under HS Code 8514.5120 in terms of Rule 2(a) of General Rules of Interpretation, since they were incomplete/unfinished articles having the essential character of a pedestal fan. The subject goods (samples of) were taken to local retailers who endorsed the view that these goods would not undergo any value addition locally and shall only be screwed/joined together to assemble a fan. Based on market survey there was a consensus that, together, the two parts represented 90% of the value of a fan. Assistance/ guidance were also sought from the guidelines accompanying the Valuation ruling 384/2011 for SKD condition. Following formula was used
a. Pedestal (stand with motor) 50% of the value i.e. 0.5X19.16=US$9.58/piece
b. Base (power housing) 40% of the value i.e. 0.4X19.16=US$7.66/piece
4. Subsequently both importers filed complaint before the honourable FTO Islamabad. On the instructions of honourable FTO (Peshawar), it is requested that correct classification of the goods in question may be determined and endorsed to this office.
5. The Classification Committee held its meeting on 20.11.2014 and 27.11.2014. The Collectorate’s representative reiterated the arguments contained in the Collectorate’s above referred letter. The samples of the two consignments were examined by the members of the Committee. The sample of first consignment imported by M/s AR Enterprises consisted of fan base, two batteries and electric circuits whereas sample of second consignment imported by M/s Rafiq Enterprises comprised pedestal stand, motor, rotor, connecting wises without blades and grills. In the two different consignments, the sample of first consignment comprising fan base, heading 8414.9090 (“Other”). However, the sample of second consignment consists of essential components of fan i.e. motor, rotor, shaft, stand and connecting wires which make up almost 70% of fan constitution and is most appropriately classifiable under PCT heading 8414.5120 (“Pedestal Fan”).
6. In light of the above facts, impugned goods imported in two different consignments i.e. Base (power housing) and Pedestal (stand with motor) are appropriately classifiable in light of General Rules for Interpretation as below:
(a) Base (power housing) PCT heading 8414.9090, in terms of Rule 1 of General Rules for Interpretation.
(b) Pedestal (stand with motor) PCT heading 8414.5120, in terms of Rule 2(a) of General Rules for Interpretation.
Signed by
(Zeba Bashir Ahmed)
Additional Collector I
Chairman Classification Committee
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