2025 (12) TMI 1075 - AAR - Customs

Classification and import duty relief for roasted areca nuts-advance ruling refused due to binding precedent; concession needs origin proof.

The dominant issue was whether an advance ruling could be given on classification of 'roasted areca nuts' under the Customs Tariff. Because a binding HC ... Classification of the 'Roasted Areca Nuts' under the First Schedule of the Customs Tariff Act, 1975 - applicability of exemption under SI. No. 172 of the Notification of Customs No. 46/2011 dated 01.06.2011 as amended - HELD THAT:- In view of the binding High Court decision in the case of Commissioner of Customs, Chennai - II versus Shahnaz Commodities International Private Limited [2023 (8) TMI 492 - MADRAS HIGH COURT] and in terms of Proviso (b) under Section 281(2) of the Customs Act, 1962, I refrain from passing any ruling on classification in this matter. Further, the applicant itself in its application has stated that 'the introduction of new entry, 2008 1991 has not altered the settled fact that the 'roasted betelnut' is classifiable under the HS Code 2008 1991.' There is no change in legal framework and the issue of classification of Roasted Areca Nut is already settled by the decision of Hon'ble High Court of Madras. Therefore, in view of the binding High Court decision and in terms of Proviso (b) under Section 281(2) of the Customs Act, 1962, it is refrained from passing any ruling on classification in this matter. Applicability of exemption benefit under Sr. No. 172 of the Notification No. 46/2011-cus dated 01.06.2011 - HELD THAT:- The preferential duty (Basic Customs Duty) under Notification No. 46/2011-Cus dated 01.06.2011 is contingent upon the importer proving to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the countries as mentioned in Appendix I or Appendix II of the said Notification, in accordance with provisions of the Customs Tariff Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 189/2009-Custous (N.T.) dated the 31st December 2009 and in terms of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. As far as, the Country-of-Origin benefit under Sr. No. 172 of N/N. 46/2011-Cus dt 01.06.2011 is concerned, these benefits are contingent upon proving to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the respective country in terms of relevant notifications mentioned supra and in terms of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the application for advance ruling on classification of 'Roasted Areca Nuts' is maintainable in view of proviso (b) to Section 28I(2) of the Customs Act, 1962, when the same classification issue has already been decided by a High Court in the applicant's own case. 1.2 Whether the amendments to the Customs Tariff (Finance Act, 2025) for heading 2008, including the shift from tariff item 2008 19 20 to 2008 19 91, constitute a change in the legal framework sufficient to take the present classification question outside the bar under proviso (b) to Section 28I(2). 1.3 Whether, and to what extent, the benefit of exemption under Sr. No. 172 of Notification No. 46/2011-Cus dated 01.06.2011 (as amended) is available to imports of Roasted Areca Nuts, particularly with reference to the country-of-origin conditions. 1.4 Whether the request of the applicant to keep the ruling confidential should be accepted under Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 & 2 - Maintainability of the classification ruling in light of prior High Court decision and tariff amendment Legal framework 2.1 The Court examined Section 28H and Section 28I of the Customs Act, 1962, particularly proviso (b) to Section 28I(2), which mandates that the Authority 'shall not allow the application where the question raised in the application is the same as in a matter already decided by the Appellate Tribunal or any Court.' 2.2 The Court noted that the applicant holds a valid Importer Exporter Code and that the questions on classification and interpretation of an exemption notification are, in principle, questions covered by Section 28H(2), making the applicant otherwise eligible to seek an advance ruling. 2.3 The Court also considered the tariff amendments under the Finance Act, 2025 to heading 2008, specifically the substitution of tariff items 2008 19 20 to 2008 19 90 by 2008 19 21 to 2008 19 99, and the movement of 'Other roasted nuts and seeds' from 2008 19 20 to 2008 19 91. Interpretation and reasoning 2.4 The Court recorded that the issue of classification of Roasted Areca Nut had already been 'unequivocally dealt' with by a High Court in the applicant's own case, wherein roasted betel/areca nut was classified under heading 2008, and that this decision has attained finality. 2.5 The applicant argued that, due to the 2025 tariff amendments, a new legal framework exists, rendering the present question different from the one already decided. The Court therefore compared the pre-amendment and post-amendment tariff structure to test this assertion. 2.6 On comparative analysis, the Court found that: (a) The four-digit heading (2008: 'Fruit, nuts and other edible parts of plants, otherwise prepared or preserved...') remains unchanged. (b) The six-digit sub-heading 2008 19 ('Other, including mixtures') also remains unchanged. (c) The description at the eight-digit level 'Other roasted nuts and seeds' is identically retained; only the numerical code shifted from 2008 19 20 to 2008 19 91. 2.7 The Court further observed that there has been no change in the relevant Section Notes (Section IV) or Chapter Notes (Chapter 20), and thus no alteration in the legal basis or interpretative framework under the General Rules for the Interpretation of the Tariff. 2.8 The Court noted that the applicant itself had acknowledged in the application that the introduction of tariff item 2008 19 91 'has not altered the settled fact' that roasted betel nut is classifiable under heading 2008, and that only the rate of duty has changed. 2.9 In these circumstances, the Court held that the core question-classification of Roasted Areca Nuts under heading 2008 as 'other roasted nuts and seeds'-had already been decided by a High Court, and the mere renumbering of the eight-digit code did not create a new or distinct question of law or fact for purposes of Section 28I(2). Conclusions 2.10 The Court concluded that proviso (b) to Section 28I(2) squarely applies, as the question raised is the same as a matter already decided by a Court. 2.11 The Court therefore refrained from issuing any advance ruling on the classification of the subject goods 'Roasted Areca Nuts.' Issue 3 - Applicability of exemption under Sr. No. 172 of Notification No. 46/2011-Cus Legal framework 2.12 The Court considered Notification No. 46/2011-Cus dated 01.06.2011 (as amended), specifically Sr. No. 172, covering tariff range 2007 10 to 2008 20 ('All goods') with a specified basic customs duty rate of 0%, subject to conditions. 2.13 The Court referred to the conditions that the exemption is available only where the importer proves to the satisfaction of the Deputy Commissioner or Assistant Commissioner of Customs that the goods are of the origin of specified countries, in accordance with: (a) The Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India) Rules, 2009, and (b) The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. Interpretation and reasoning 2.14 Without entering into or reopening the issue of tariff classification (in view of the bar under Section 28I(2)), the Court confined itself to stating the conditional nature of the exemption. 2.15 The Court emphasized that entitlement to preferential basic customs duty under the said notification is not automatic but contingent on the goods satisfying applicable rules of origin and related procedural requirements, to be examined by the jurisdictional assessing officer at the time of import. Conclusions 2.16 The Court held that, if the imported Roasted Areca Nuts meet the origin and procedural requirements stipulated in Notification No. 46/2011-Cus, read with the 2009 Rules and the 2020 Rules, the benefit under Sr. No. 172 would be available. 2.17 The Court clarified that the actual grant of the exemption is subject to proof of origin and compliance, to the satisfaction of the proper officer, and did not render any further ruling on classification-linked aspects of the notification. Issue 4 - Request for confidentiality of the ruling Legal framework 2.18 The Court examined Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021 (as amended), which authorizes publication of orders and rulings, and its proviso that, at the request of the applicant, the Authority may take necessary steps to protect 'commercially confidential information.' Interpretation and reasoning 2.19 The applicant requested that the ruling be kept confidential. The Court assessed whether the ruling contained any 'technical data, proprietary data or commercially confidential information' unique to the applicant that would warrant protection under Regulation 27. 2.20 The Court found that: (a) The ruling does not contain any such technical or proprietary data specific to the applicant. (b) The product description and its characteristics have already been discussed at length in a previously published High Court order. 2.21 On this basis, the Court held that there was no sensitive or commercially confidential information in the ruling requiring protection under Regulation 27. Conclusions 2.22 The Court declined the applicant's request to keep the ruling confidential and held that the ruling could be published in accordance with Regulation 27.