Advance Ruling

[MANOHARAN ARUMUGAM]

Dear experts,

In 2021 we had imported one equipment falling under CTH 9027. Customs disputed our assessment and issued SCN to pay the differential duty under some other CTH. Meanwhile, for the same equipment somebody applied for Advance Ruling and the customs authority for advance ruling passed a ruling confirming the equipment to be classified under CTH 9027.

My query is if we can use the Advance Ruling in support of our assessment and drop the SCN?

Pl. clarify.

[Amit Agrawal]

Such advance ruling have persuasive value, but same is not legally binding upon original adjudicating authority in your case.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

Section 28J(1) The advance ruling pronounced by the Authority under section 28-I shall be binding only -

(a) on the applicant who had sought it;

(b) in respect of any matter referred to in sub-section (2) of section 28H;

(c) on the Principal Commissioner of Customs or Commissioner of Customs, and the customs authorities subordinate to him, in respect of the applicant.

Thus advance ruling shall be binding on only the applicant and customs authorities in respect of the applicant. However, the favorable advance ruling obtained by some other importer may have a persuasive value in your assessment but it is not binding on the authorities.

[Shilpi Jain]

Agreed. Take reference of this ruling in the reply for the SCN in addition to other already settled cases in this regard.

[KASTURI SETHI]

Persuasive value can tilt the decision in your favour by the Adjudicating Authority. AAR decision can help. Must take shelter of AAR.

[MANOHARAN ARUMUGAM]

Thanks to all the experts for their valuable inputs/guidance.

AI Summary

Advance Ruling on CTH 9027 Equipment: Persuasive but Non-Binding; Useful in Responding to Show Cause Notice. An individual inquired about using an Advance Ruling to support their customs assessment for equipment classified under CTH 9027, which customs disputed. Experts responded that while the Advance Ruling has persuasive value, it is not legally binding on the original adjudicating authority unless the applicant is directly involved. They advised referencing the ruling in responding to the Show Cause Notice (SCN) and suggested that the ruling could influence the adjudicating authority's decision. The discussion emphasized the non-binding nature of the ruling but acknowledged its potential to support the case.