In re S. R. Sales (CAAR Delhi)
Summary: The Customs Authority for Advance Rulings, Delhi rejected five applications filed by S. R. Sales concerning the classification of roasted areca nuts and eligibility for concessional customs duty under Notification No. 46/2011 dated 01.06.2011. The applications, received on 24.06.2026, sought clarification whether the proposed imports, described as products manufactured through composite steam-assisted thermal treatment, pressure, roasting, moisture transformation, stabilization and edible preparation processes, were classifiable under Tariff Item 2008 19 91 or Tariff Item 2106 as betel nut products known as supari.
After a personal hearing on 27.08.2026, the Authority first examined maintainability under Section 28-I(2) of the Customs Act, 1962. It distinguished the bar concerning matters pending in the applicant’s own case from the bar concerning questions already decided by a Tribunal or Court, treating the latter as applicant-agnostic. Relying on Union of India v. Kamlakshi Finance Corporation Ltd., the Authority emphasized judicial discipline and the obligation to follow higher judicial decisions. It found the classification question covered by the Madras High Court judgment identified in the order as M/s Shahnaz International Pvt. Ltd., 2023 (386) E.L.T. 214 (Mad.). Although that judgment did not cover the separate duty-concession question, the Authority held that the statutory scheme did not permit partial rejection of an application. Consequently, all five applications were rejected in toto, without a substantive ruling on either the proposed tariff classification or eligibility for the notification benefit.
Cases Discussed
- 2023 (386) E.L.T. 214 (Mad.) — M/s Shahnaz International Pvt. Ltd. (Madras High Court) — Identified in the supplied order as covering the classification of roasted areca nuts; relied upon to decline a fresh ruling under Section 28-I(2)(b). The case name is preserved as supplied.
- 1991 (55) ELT 433 (SC) — Union of India v. Kamlakshi Finance Corporation Ltd. (Supreme Court) — Relied upon for the binding nature of precedent and the obligation of subordinate authorities to follow higher judicial pronouncements.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY FOR ADVANCE RULINGS, DELHI
M/s S. R. Sales, 51/17, MAA Kripa Complex, Ram Ganj, Kanpur Nagar, Kanpur, Uttar Pradesh-208001 having IEC No. AKRPJ2604Aand PAN AKRPJ2604A(the applicant, in short) filed five applications CAAR-1 before the Customs Authority for Advance Rulings, New Delhi (CAAR, in short) for seeking advance rulings. The applications No. 43/2026-27, 44/2026-27. 45/2026-27, 46/2026-27 & 47/2026-27 were recived on 24.06.2026 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962(hereinafter referred to as “the Act’). The Applicant is seeking advance ruling on the issue of Classification of the “Roasted Areca Nuts(Whole, Split & Cut)” under the first Schedule of the Customs Tariff Act, 1975 and eligibility for concessional duty benefits under Notification No. 46/2011 dated 01.06.2011.
2. The applicant has sought ruling in respect of the following question(s)
(i) “Whether the product proposed to be imported by the applicant, commercially traded as “Roasted Areca Nut” but manufactured through composite steam assisted thermal treatment, pressure, roasting process, moisture transformation, stabilization and edible preparation processes resulting in a ready to consume prepared edible product is classifiable under Tariff Item 2008 19 91 of the First Schedule to the Customs Tariff Act, 1975 or it is classifiable under Tariff Item 2106 that is Betel Nut Product Known As supari?”
(ii) “whether exemption/ concessional benefits under Notification No. 46/2011 dated 01.06.2011 would apply to the goods under question?”
3 A personal hearing in the matter was conducted on 27.08.2026. The authorised representative of the applicant appeared before the Authority through virtual mode and reiterated the submissions made in the application and the subsequent written submissions.
4. Findings, Discussion & Conclusion
4.1 I have gone through the applications of advance ruling and relevant provisions in this regard. | consider it necessary to first address the question of maintainability of the present applications. Section 28-1(2) of the Customs Act, 1962 governs the admissibility of applications before the Customs Authority for Advance Rulings. The relevant part of that provision reads as under:
“28-I. Procedure on receipt of application: (1) On receipt of an application, the Authority shall cause copy thereof 1o be forwarded to the [Principal Commissioner of Customs or Commissioner of Customs) and, if necessary, call upon him to furnish the relevant records:
Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the Principal Commissioner of Customs or Commissioner of Customs) (2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application Provided that the Authority shall not allow the application question raised in the application is, where the
(a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court,
(b) the same as in a matter already decided by the Appellate Tribunal or any Court.”
4.2 From the above, I find that Section 28-1 (2) of the Customs Act, 1962 governs the admissibility of applications before the Custom Authority for Advance Rulings (CAAR). The first proviso to Section 28-I (2) stipulates that the Authority shall not allow the application where the question raised in the application is (a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court; or (b) the same as in a matter already decided by the Appellate Tribunal or any Court.
4.3 Further, I understand that the entire mechanism of advance rulings is a trade facilitation measure introduced with the aim of reducing litigation and providing certainty to assessees, consistent with Article 3 of the WTO Trade Facilitation Agreemen. The WTO framework itself recognizes two distinct situations where advance rulings may be declined: (a) when the issue is pending in the applicant’s own case, and (b) when the issue has already been decided by an appellate tribunal or court. The first is applicant-specific, whereas the second is applicant-agnostic. This distinction is necessary because advance rulings are implemented by Departmental officers who are duty bound to apply the law as settled in their jurisdiction. In India, this position is fortified by the ruling of the Hon’ble Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd., 1991 (55) ELT 433 (SC), which underscores the binding nature of precedent and the obligation of lower authorities to follow higher judicial pronouncements.
4.4 It is a settled principle of law that rulings of the Tribunal and Courts are binding on subordinate authorities. The CAAR, being a statutory authority under the Customs Act, is equally bound by such precedents. To allow fresh application on questions already adjudicated by higher judicial fora would risk the creation of conflicting rulings and introduce uncertainty, an outcome contrary to the very object of the advance ruling mechanism. Clause (b) therefore operates as a statutory reinforcement of judicial discipline, making it explicit that once a question has been conclusively determined by the Tribunal or Courts, the Authority cannot re-adjudicate the same issue at the behest of another party.
4.5 In the instant case, I observed that the first question raised regarding the classification of roasted areca nuts in the present applications is squarely covered by the judgment of the Hon’ble Madras High Court in the case of M/s Shahnaz International Pvt. Ltd. [2023 (386) E.L.T. 214 (Mad.)]. Therefore, in adherence to judicial discipline and binding precedent and in terms of Section 28-I(2)(b) of the Customs Act, 1962, I refrain from pronouncing any ruling on the question of classification raised in the instant applications.
4.6 Further, I observe that the applicant has also raised the issue of availment of duty benefit of BCD under Notification No 46/2011-Customs Dated 01.6.2011. This question raised was not covered in the judgment of the Hon’ble Madras High Court in the case of M/s Shahnaz International Pvt. Ltd. However, I note that the statutory framework governing advance rulings neither contemplates nor permits the partial rejection of an application. The scheme envisages that an application must be admitted or rejected in its entirety on the grounds expressly prescribed by the statute.
4.7 As discussed above, in terms of Section 28-1(2)(b) of the Customs Act, 1962 and in adherence to the principles of judicial discipline and binding precedent, | deem it appropriate to refrain from pronouncing any ruling on the question raised in the instant applications regarding classification of the subject goods. Further, with regard to the second question concerning eligibility to the benefit of Notification No. 46/2011-Customs dated 01.06.2011, find that the statutory scheme governing advance rulings does not envisage or permit partial rejection of an application, therefore, the instant applications are liable to be, and is accordingly, rejected in toto.
5. The applications are not allowed and disposed of accordingly.
