ISLAMABAD: The Supreme Court has ruled that a stretched limousine originally designed to seat five does not become a 10-seater merely because it is privately modified to increase its seating capacity.
“Subsequent alteration may change the physical configuration of the vehicle, but cannot alter the design and character with which it was originally manufactured for purposes of tariff classification,” Justice Muhammad Shafi Siddiqui observed in a seven-page judgement.
Justice Siddiqui was a member of a three-judge Supreme Court bench, headed by Chief Justice of Pakistan Yahya Afridi and also comprising Justice Miangul Hassan Aurangzeb.
The SC took up an appeal filed by the Collector of Customs, Model Customs Collectorate, Peshawar, against an Oct 5, 2023 Peshawar High Court (PHC) judgement that had held otherwise. The dispute arose when respondent Shahid Muhammad imported a limousine bearing vehicle identification number (VIN) 2C3KA53G97H610047 through the Customs Dry Port, Peshawar, under a Goods Declaration dated Nov 1, 2011.
Sets aside PHC order, allows Pakistan Customs appeal in limousine case
The importer’s clearing agent initially declared the vehicle under PCT (Pakistan Customs Tariff) Heading 87.02, covering motor vehicles designed to transport 10 or more persons, including the driver. Upon examination, however, Customs authorities found that it was a stretched vehicle originally designed as a five-seater.
The vehicle was consequently classified under PCT Heading 87.03, covering motor cars and other motor vehicles principally designed for the transport of persons, other than those falling under Heading 87.02.
It was accordingly assessed under PCT 8703.2490, and the respondent obtained its release after paying the assessed differential duty and taxes.
Aggrieved by the classification, the respondent approached the Federal Tax Ombudsman, Islamabad, which directed the Federal Board of Revenue to have the matter determined in accordance with law. After completion of the requisite formalities, the matter was placed before the Deputy Collector of Customs (Adjudication), Peshawar, who on Oct 3, 2012, upheld the departmental classification.
The respondent then appealed before the Collector of Customs (Appeals), Peshawar, which dismissed the appeal on Dec 27, 2012, maintaining the classification determined by the adjudicating authority. He subsequently approached the Customs Appellate Tribunal, Peshawar bench, which set aside the appellate order on May 6, 2014. It held that the vehicle was classifiable under PCT 8702.9090 rather than PCT 8703.2490 and directed a refund of the excess duty and taxes .
The Collector of Customs then challenged the tribunal’s judgement before the PHC, which also upheld it. The matter consequently reached the Supreme Court.
Justice Siddiqui observed that the core controversy concerned the significance of the vehicle’s original design as opposed to its subsequent modification.
The limousine was originally manufactured as a five-seater motor car and was only later and privately altered to accommodate additional passengers. The increased seating capacity was therefore a consequence of a subsequent modification rather than a feature of the vehicle’s original manufacture, the judgement said. In such circumstances, the mere presence of additional seats at the time of importation could not, by itself, establish that the vehicle was designed to transport 10 or more persons within the meaning of PCT Heading 87.02.
The vehicle’s original design and construction, as established from the material on record, remained relevant to its classification and supported its placement under PCT Heading 87.03, Justice Siddiqui observed.
He held that the approach adopted by the PHC could not be sustained.
Published in Dawn, September 24th, 2026
