GOVERNMENT OF PAKISTAN

COLLECTORATE OF CUSTOMS APPRAISEMENT (EAST)

CUSTOMS HOUSE, KARACHI

No. C-180/KAPE/PCT/2021                                                     Dated: 07.03.2022

 PUBLIC NOTICE NO. 03/2022

                       Sub: CLASSIFICATION OF THE GOODS DECLARED AS PROCESSED CREAM CHEESE SPREAD PRODUCTION(PUCK BRAND)

M/s Ekada Corporation (NTN.4232868), Karachi imported goods declared as Processed Cream Cheese Spread Production (Puck Brand)" and claimed PCT heading 1901.9090. The Collectorate of Appraisement (Port Qasim) changed the classification of the Processed Cream Cheese Spread from 1901.9090 to 0406.1010 on the grounds that goods were based on natural fats. The importer contested the classification done by the Collectorate and the matter was referred to the Classification Committee.

2.         The meeting of Classification Committee was held on 12.11.2021 where Authorized Representatives of importer and departmental representative submitted their arguments. AR of the importer also submitted written reply. Importer's representatives argued that imparted goods are cheese substitute or imitation cheese which is intended to be partly or wholly substitute for cheese and in which milk fat, milk protein or both are partially or wholly replaced by non-milk based alternatives, principally of vegetable origin. Cheese substitute is a substitute for milk cheese which is similar in composition, appearance, characteristics and even its intended use. Hence, "Processed Cream Cheese Spread" being preparation of milk and vegetable oil is correctly classifiable under PCT Heading 1901.9090. The referring department argued that HS code has been ascertained on grounds that product comprise of natural milk constituents hence correctly classifiable under PCT heading 0406.1010.

3.         The Classification Committee has examined the arguments of applicants and technical literature provided by the importer as well as the lab reports. Technical information provided suggest that instant product is based on skimmed cow milk. Information provided nowhere suggest that milk used is partially skimmed. Nevertheless, the importer, during hearing, argued that impugned product contains milk fat as well as vegetable fat. This fact is also confirmed through test report of the impugned product conducted through HEJ Laboratory vide report dated 11.9.2019. HEJ report concludes that sample "Processed Cream Cheese Spread Production/Food preparation Mixed Product (Puck Brand)" contained 31.45% fat. The fatty acid profile shows that the said sample contained Milk fat along with Vegetable fat".

4.         The Committee considered headings 04.06, 19.01 and 21.06 for possible classification of impugned product. The committee has referred to the relevant chapter (04, 19 and 21) notes and explanatory notes of heading 04.06, 19.01 and 21.06. The Note 4 (b) of Chapter 4 excludes food preparations and milk preparations obtained from milk from its scope where milk fat has been replaced with vegetable fat and suggests such preparations either fall in 19.01 or 21.06. Explanatory Note III to heading 19.01 provides that for an item/product to fall within this heading one or more natural mill constituents should be replaced (emphasis added) with other constituent (like replacing milk fat with vegetable fat). In the instant product, this is not the case as per HEJ Lab report and also confirmed by the importer, as the product contains milk fat as well as vegetable fat. In the impugned product instead of replacing natural milk constituent (milk fat), more fat (vegetable fat) has been added. Accordingly, instant product (Processed Cream Cheese Spread Production (Puck Brond)) is not covered under scope of heading 19.01 and more akin to food preparation of heading 21.06 in terms of Explanatory Note A of the heading 21.06 read with Note 4 (b) of Chapter 4.

5.         In view of above, the Committee is of considered opinion that under Rule 3 (c) and 4 of General Rules of Interpretation, product ie. Processed Cream Cheese Spread Production (Puck Brand) appropriately classifiable under Tariff heading 2106.9090.

6. This ruling is issued in terms of Chapter-II (Classification) of the CGO 12/2002 dated 15.06.2002.                                     

                                         (Signed by)

(Muhammad Daud Pirzado)

Additional Collector

Chairman Classification Committee

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