KARACHI: The Customs Adjudication has ordered confiscation of the consignment of power cables imported by M/s Yamaha Motor Pakistan (Pvt) Limited with an option to redeem the goods on payment of redemption fine, as the company misdeclared PCT classification to evade duty/taxes.
According to the details of the case, M/s Yamaha Motor Pakistan imported a shipment of power cables and sought clearance declaring goods as power cables under PCT heading 8544.4920 (attracting customs duty @ 10%).
Principal Appraiser Asad Masood detected the PCT heading not appropriate as the goods as per the specification fell under PCT heading 88544.4990 attracting customs duty at the rate of 25 percent. The importer was issued show cause notice and contraventions was forwarded to Customs Adjudication.
M/s Yamaha Motor Pakistan responded that the declared PCT was quite relevant keeping in view the nature and specs of these cables. The said subheading covers “Multi-core-flexible, flat-type copper, insulated cables”. The imported goods are multi-Core-flexible, insulated and duly made of copper.
The importer observed that the only aspect which the department is relying for the purpose of changing classification at sub-heading level attracting higher rate of customs duty is the shape of Cable, as it is circular instead of flat and there isn’t a specific HS code that classifies Circular Shape; which would have identified the significance of shape, and they would have used that particular HS code.
On the grounds of circular shape alone, classifying the shipment in the general category of “others” description under HS attracting higher rate of duty.
The departmental representative, Principal Appraiser Asad Masood submitted that importer declared incorrect HS code as 8544.4920 attracting custom duty 10% which is meant for flat type conductor, whereas goods are other than flat type conductor and are correctly classifiable under HS code 8544.4990 chargeable to custom duty 25% instead of 10%.
The Collector Adjudication considered written and verbal arguments besides perusing the technical literature of the impugned goods provided by the importer and observed that the company imported Power Cable for new factory project of Yamaha Motor Pakistan in Special Economic Zone (SEZ) at Bin Qasim Industrial Park (BQIP) and sought clearance under PCT heading 8544.4920. However scrutiny of the technical literature supported by the Collectorate report indicated that the goods are ‘multi core-flexible, round insulated, which is admitted by the importer.
The claimed PCT heading i.e. 8544.4920 is meant for ‘multi core, flexible, flat type copper, insulated (all features together); it is evident that only those goods having all these features would qualify for classification under the claimed PCT heading.
In the instant case the goods (cable) are of circular cross-section and therefore appropriately classifiable under PCT heading 8544.4990.
The Adjudication found the assessment determined by the Collectorate as correct ordered for confiscation of the goods. However, an option is given to the importer to redeem the confiscated goods on payment of 20 percent of redemption fine (of the-value of offending goods as determined by the department) i.e. Rs34.639 million in addition to payment of duty and taxes chargeable at the rate of 25 percent.