https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=753450 https://www.taxtmi.com/caselaws?id=753450 API supari - rate of duty - Applicability of Advance Ruling u/s 28J of Customs Act, 1962 - Applicability of Advance Rulings - Classification of API supari and burden of proof - Legality of revision in classification of the product - Binding nature of Advance Rulings and judicial precedents. Jurisdictional limitation on rulings of Authority for Advance Rulings u/S 28I of Customs Act, 1962 - HELD THAT:- Our perusal of chapter VB of Customs Act, 1962 does not offer scope for determining jurisdiction over which the ruling is to apply to be within the remit of Customs Authority for Advance Rulings (CAAR); moreover, Customs Authority for Advance Rulings (CAAR) is not concerned with enforcement of its rulings and, therefore, observation therein on its jurisdictional applicability is not only premature but beyond consideration even. A proposition in passing is not legally valid to be drawn upon as authority by Commissioner of Customs to truncate the applicability of an advance ruling by a statutorily constituted authority. Strictly speaking, it was not levy of duties of customs under Customs Act, 1962 that was the subject of ruling or the demand impugned therein but of levy under section 30 of Special Economic Zones Act, 2005 for which duties of customs was merely the measure and, hence, even the Commissioner of Customs could not have been appended to the applicant let alone any other Commissioner or any other authority. This decision does not advance the proposition of jurisdictional limit set out in the impugned order before us. We may also venture to observe that customs practice does not prescribe that, in every import which has not sought jurisdiction of Authority for Advance Rulings (Central Excise, Customs and Service Tax), the classification should, necessarily, be contrary to that in the advance ruling. The essence of our observation is that the nature of ruling is such that even if discarded, and only by operation of law in chapter VB of Customs Act, 1962, another tariff line more detrimental to importer is, by default, not elevated as the appropriate classification for which the adjudicating authority must, necessarily, set in motion the circumscribing framework for the revision to stand the test. There is, thus, no cause for the subsistence of the proposition of alienation of jurisdiction by the adjudicating authority; the provisions of section 28J (1) of Customs Act, 1962 bind the trinity of applicant, ruling and customs administration of India, with the customs formations as surrogates according to location of import, till the span of life of the ruling unless distinguished in accordance with section 28J (2) of Customs Act, 1962 or the rescinding of the ruling by operation of section 28K of Customs Act, 1962. With all impediments to application of the impugned ruling thus erased, the classification, and consequences thereof, in the impugned ruling applies to the impugned goods. Classification of the Product: The intent of the tariff is classification that is consistent across time and space; it is not a tool for fastening imports to the higher rate of the moment. The notes are not only for assisting in assessment but also to enable tax policy formulation. The goods enumerated in chapter 8 of First Schedule to Customs Tariff Act, 1975 are edible fruits and nuts while the note is limited to dried fruits or dried nuts implying its applicability only to fruit or nut capable of being, and should be, edible after drying and further fitted against heading or sub-heading that specify dried in corresponding description. A perusal of the note in harmony with the remit of customs authorities required to assess goods as presented would make it abundantly clear that the purpose of this chapter note is not for fitment against the headings or sub-headings in the chapter but to ascertain retention within the chapter despite not remaining dry anymore. The manner in which this note is applicable to the impugned goods has not been touched upon in the impugned order. Binding nature - Furthermore, the impugned order has failed to ascertain if all nuts are intended to be covered by the said note especially as heading 0802 of First Schedule to Customs Tariff Act, 1975, while incorporating fresh or dried , has not distinguished the sub-headings thus and, thereby, leaving it to the national jurisdictions to do so. Our essaying on the Harmonized System of Nomenclature (HSN) being, first and foremost, intended for formulation of policy is thus demonstrated. That the Commissioner of Customs chose to arm the impugned proceedings with the said notes in the absence of detailed scrutiny of its applicability has only undermined the purpose of the impugned proceedings. Had the Commissioner of Customs complied with the prescription for resolution of classification disputes as set out by us supra, an informed adjudication may have followed. Now it has not. Though Learned Counsel appears to be correct about his submissions on the findings of the Tribunal in re ST Enterprises [ 2021 (3) TMI 27 - CESTAT CHENNAI] ] we do not have to rely on those for discarding it as binding precedent on classification in the light of the decision of the Hon ble High Court of Bombay in Isha Exim Versus Union of India, Commissioner of Customs (NS-I) , Mumbai, Deputy Commissioner of Customs (NS-I) Maharashtra [ 2023 (12) TMI 920 - BOMBAY HIGH COURT ] and, owing to non-adherence to the rules of engagement for revision of classification in the impugned order, there being no alternative classification to fall back on. There is no finding that the impugned goods are not API supari and, therefore, rendering the ruling inapplicable. There is no finding that API supari under import is so materially different from the API supari that was considered in the ruling pronounced u/s 28I of Customs Act, 1962 as to blunt its binding effect. The adjudicating authority has proceeded to adjudicate the show cause notice as though the ruling under section 28I of Customs Act, 1962 was not pronounced at all and proceeded to treat it as nothing other than precedent canvassed by noticee in a normal classification dispute. The adjudicating authority allowed himself to be persuaded that, as canvassed precedent, it could be discarded by countering with more weighty precedents, contrary rulings and alternative classification affirmed judicially. The adjudicating authority has judged the ruling and invalidated it. The adjudicating authority has not comprehended the law relating to rulings. This approach goes beyond the adjudicatory empowerment under Customs Act, 1962 and suffices for setting aside the impugned order. It would appear that of two tariff lines, with blurred demarcation between them, one was disadvantaged in that the tax policy and trade policy of the Central Government has chosen to distinguish the two substantially. The customs authorities have leveraged the marginal, and arguable, distinction to bring to bear both the detriments of tariff value and import policy restrictions on the impugned goods by subtle recourse to the alternative. There is no clear finding on reasons for the shift and nor is there any authoritative source to justify the correctness of the shift. The impugned order is flawed for the above reasons and must be set aside. Accordingly, the appeals are allowed. Case-Laws Customs Fri, 17 May 2024 00:00:00 +0530