Import value of branded forms of ‘Master Batches’ fixed

ISLAMABAD: Directorate General, Customs Valuation Karachi has fixed new customs values on the import of all types of branded forms of “Master Batches” used in the plastic industry/fibers manufacturing.

The directorate has issued a new valuation ruling in this regard. The customs values of Master Batches were earlier determined vide Valuation Ruling No1212-20l7. The said Valuation Ruling was challenged by M/s Standard Enterprises through a revision petition filed under section 25D of the Customs Act, 1969, which was decided vide Order-in-Revision whereby the Valuation Ruling was upheld. Subsequently, M/s Standard Enterprises filed an appeal before the Customs Appellate Tribunal, which, vide judgment excluded the brand “cobot” from the scope of the said Valuation Ruling.

No reference was filed against the said judgment. The Directorate notes that valuation under Section 25A of the Customs Act, 1969 is time-sensitive and market dependent, requiring periodic review and re-determination. The earlier Valuation Ruling had remained in force for more than eight years.

Furthermore, fresh representations were received from stakeholders, including M/s Pinnacle Fiber (Pvt) Ltd regarding valuation of Master Batches. In view of the lapse of time evolving international market conditions, updated import data, and fresh stakeholder representations the Directorate initiated a fresh and independent determination of customs values under Section 25A of the Customs Act, 1969.

It is clarified that the present determination is not a continuation of the earlier Valuation Ruling, nor restricted by any brand-specific exclusion made therein, and has been carried out independently on the basis of current facts and data.

A meeting for determination of customs values of Master Batches was held on the aforesaid date and was attended by representatives of importers and local manufacturers. The viewpoints of all stakeholders were heard in detail.

The representative of M/s Standard Enterprises, an importer of Master Batches of a particular brand, submitted that the declared values of their imports reflected actual transaction values and furnished Goods Declarations, sales tax returns, copies of LCs along with proforma invoices.

However export Goods Declarations from the country of export were not submitted, thereby limiting verification of transaction values under Section 25(1) of the Customs Act, 1969.

On the other hand, representatives of local manufacturers submitted that the primary raw material (pigment) used in the manufacture of Master Batches is imported from M/s Cabot (China) at prices ranging between USD2.80 to 3.00 per kg. constituting approximately 50 percent of the finished product. They further submitted that resin, valued at approximately USD1.10 to 1.20 per kg, constitutes around 50 percent in addition to wax and heat stabilizers.

The manufacturer representatives contended that the declared import values of certain consignments appeared inconsistent with prevailing international prices and underlying cost structures. The written representation submitted by M/s Pinnacle Fiber (Pvt) Ltd regarding lower valuation of recycled master batches was also discussed. The contention was opposed by manufacturer representatives who submitted that prime master batches are imported at the import stage and are subsequently used in recycling processes and therefore no separate or lower valuation at the import stage is justified. No documentary evidence was produced to establish a distinct valuation mechanism for recycled master batches. All stakeholders were advised to submit documentary evidence, technical literature cost data, and written arguments in support of their respective submissions.

The computed value method under Section 25(8) was also found inapplicable due to the absence of credible and verifiable information regarding manufacturing costs, overheads, and associated expenses in the country of export.

Accordingly, the customs values of the subject goods have been determined under section 25(9), read with Sections 25(6) of the Customs Act 1969.