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Imported Aluminum Waste and Scrap of Auto-Parts Subject to 30% Customs Duty: FBR

The customs classification committee of the Federal Board of Revenue (FBR) has imposed a 30 percent customs duty on the import of aluminum waste and scrap of ‘auto-parts’, and not zero percent duty as claimed by the importer. The committee has issued a ruling in this regard.

According to the FBR’s customs classification committee, the Collectorate of Customs Appraisement, Port Qasim, forwarded a reference for the determination of appropriate classification of “Aluminum Waste and Scrap of Auto-Parts”.

The Collectorate was of the view that the impugned goods were fragmented pieces of auto-parts, without change in their actual composition, and classifiable under Pakistan Customs Tariff (PCT) Code 7602.0010 (auto-parts). On the other hand, the importer M/s Mughal Iron & Steel Industries Limited, Lahore contended that the impugned goods were ‘Aluminum Scrap in Shredded state’ and the essential character of such article was changed, therefore, correctly classifiable under their declared PCT heading 7602.0090.

The classification committee considered the stance of the Collectorate, the arguments of the importer and perused the available record. Further WeBOC clearance data of waste and scrap of aluminum auto parts was also scrutinized which showed that the impugned goods are imported, declared/assessed under PCT Heading 7602.0010.

In the instant case, the Committee observed that the actual dispute arose due to the physical examination of the goods and their physical attributes, on which the parties have divergent views.

According to the referring Collectorate, the goods are ‘aluminum waste and scrap of auto parts and the physical attributes of the impugned goods had neither been denied nor disputed, and that mere fragmentation of auto-parts into smaller pieces did not change the actual source of the goods. Contrary to it, the importer is of the view their goods are not drawn from waste and scrap of auto parts; rather it comprises of majority of different articles, including motor vehicles, which lost their essential character during the fragmentation/shredding process.

The committee observed that the issue mainly and primarily relates to the actual description of the goods. However, the committee decided to proceed to examine the matter with respect to the classification of such goods

In view of the foregoing, the classification committee was of the view that the aluminum waste and scrap, identifiable to be comprised of ‘auto-parts’, is classifiable under PCT heading 7602.0010 (auto parts), and in case the source from where the aluminum waste and scrap was drawn is completely unidentified, due to physical nature of such waste and scrap, and the same comprises of a variety of mixed aluminum waste and scrap, predominately of other than auto-parts, then such the aluminum waste and scrap shall fall under PCT heading PCT heading 7602.0090, it added.

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