KARACHI: The Collector Adjudication has observed that there is no single policy for the classification of certain goods creating difficulties for importers and agents and increasing chances of abuse of authority; and referred impugned consignments of PC boards and component for meters to the Classification Center established at MCC East for decision.

The Collector ordered release of goods against appropriate security/undertaking to secure government revenue until the Classification Center ruling.

According to details, M/s Creative Electronics imported a consignment which was selected for scrutiny. Scrutiny of the Goods Declaration found the consignment to be electricity meters in knock down condition having essential characteristics of electricity meters as per interpretation Rule 2A of the classification of goods under Harmonized System.

The goods fall under PCT Heading 9028.3000 attracting 25% customs duty instead of declared various PCT Headings of parts at lower rate of customs duty.

The examination found the value of offending goods at Rs. 26.209 million causing loss of revenue of Rs7.29 million.

The importer through the consultants responded that the Assessing Officer incorrectly assessed the Electronic Parts under PCT 9028.3000 as Complete & Finished article i.e. electricity meter knocked down condition having essential characteristics of electricity meters as per interpretation rules 2A of the classification of goods under harmonized system, which is illegal and un-lawful without any basis when the impugned goods are not complete and finished article. T

The importer submitted that total 51 electronic components / subcomponents are required in order to manufacture complete / finished Electricity Meter, whereas instant consignment comprising of 20 items have been imported, as such the 31 items are more needed to make complete article. Besides, the most important is that programming software is essentially required which is also necessary.

The imported 20 Components / Sub-Components do not constitute the Electricity Meters as such are appropriately classifiable under the claimed PCT-Headings.

The importer submitted that the impugned goods are neither complete or finished Articles nor goods so presented for reasons of requirement or convenience of packing, handling or transport as such the goods do not retain as an essential character of finished / complete Article in order to qualify the Rule 2(a) GlR.

The impugned goods consist of 20 components / subcomponents out of 51 items. As such 31 components/subcomponents are more required with the addition of Software programing. As per method of manufacturing which is in practice is that only the process of soldering is involve d whereas no assembly operation i.e (screws, nuts, bolts, etc) or by riveting or welding is involved. The components/subcomponents are subjected to further working operation in order to complete the finished article. As such the impugned goods do not qualify the essential character of finished/unfinished article.

The importer’s consultant also argued that the meters were single phase meters and not three phase meters and the imposing valuation advise of finished Three phase meters on individual component of the a single phase meter would be unlawful and illegal.

The components imported were for Single phase meter was confirmed by an independent expert who was asked to assist in this case.

The collector Adjudication was not satisfied with the contention of the Collectorate and observed that in the presence of numerous evidences confirming the viewpoint of the importer’s representative and the technical advice of the Principal Appraiser suggesting a third PCT heading, it is established that there is no single established policy for the classification of such goods which creates difficulties for importers and Clearing Agents and increases chances of misuse and abuse of authority.

The Collector Adjudication ordered that the impugned goods be released by securing government revenue with security/ undertaking and the matter was referred to the Classification Centre established in the Model Customs Collectorate East for decision.

The Orded-in-original maintained that in case the Classification Centre rules that such consignments of PC boards and component for meters are to be treated as complete meters by virtue of GlR2, demand should be raised against all imports made in the past five years.