SC rules original design determines car classification

Islamabad: The Supreme Court has deemed that a limousine originally designed for five passengers cannot be deemed a 10-seater simply due to private modifications increasing its capacity, according to a seven-page judgement by Justice Muhammad Shafi Siddiqui. This ruling emerged from a three-judge bench, presided over by Chief Justice of Pakistan Yahya Afridi, and included Justice Miangul Hassan Aurangzeb.

The case began when the Customs Collector of Peshawar challenged a October 5, 2023, decision from the Peshawar High Court that initially classified a limousine as a 10-seater. The dispute arose when Shahid Muhammad imported a limousine, VIN 2C3KA53G97H610047, through the Customs Dry Port in Peshawar under a Goods Declaration dated November 1, 2011.

The initial declaration placed the vehicle under PCT Heading 87.02, which covers motor vehicles designed for 10 or more persons. However, upon inspection, Customs authorities concluded that the limousine was originally a five-seater, leading to its classification under PCT Heading 87.03, which covers motor cars and other vehicles designed for the transport of persons, excluding those covered by Heading 87.02.

The assessed duty and taxes followed this reclassification, and the respondent paid the additional fees. The Collector of Customs appealed this classification at multiple levels, including the Federal Board of Revenue, the Deputy Collector of Customs, the Collector of Customs (Appeals), the Customs Appellate Tribunal, and finally the Peshawar High Court.

The Supreme Court ultimately upheld the original classification, emphasizing that the vehicle's original design was more relevant than any subsequent modifications to its classification.