In re Vardhman Vanijya Private Limited (CAAR Delhi)
Summary: The Customs Authority for Advance Rulings (CAAR), New Delhi, examined an application filed by Vardhman Vanijya Private Limited concerning the customs classification of roasted betel nuts or areca nuts, both whole and cut, proposed to be imported into India. The applicant sought confirmation that the goods were classifiable under HS Code 2008 19 91 of the First Schedule to the Customs Tariff Act, 1975, and clarification on whether the proposed processing operations would qualify the products as roasted areca nuts under that tariff entry. The application also raised the availability of concessional Basic Customs Duty under Serial No. 172 of Notification No. 46/2011-Customs dated 1 June 2011, as amended by Notification No. 41/2019-Customs dated 31 December 2019. A personal hearing was conducted on 17 September 2026 through virtual mode, during which the applicant’s authorised representative reiterated the submissions made in the application and subsequent written submissions.
The Authority first examined the maintainability of the application under Section 28-I(2) of the Customs Act, 1962. It distinguished between questions already pending in proceedings involving the same applicant and questions previously decided by an appellate tribunal or court. The Authority explained that while the first restriction is applicant-specific, the second applies irrespective of the identity of the applicant. Referring to the objectives of the advance ruling mechanism and Article 3 of the WTO Trade Facilitation Agreement, it emphasised that advance rulings are intended to provide legal certainty and reduce disputes rather than permit repeated adjudication of settled questions. Relying on the Madras High Court judgment concerning roasted areca nuts and the Supreme Court’s decision in Union of India v. Kamlakshi Finance Corporation Ltd., the Authority highlighted the binding effect of higher judicial decisions on subordinate authorities.
CAAR Delhi held that the applicant’s classification questions were squarely covered by the Madras High Court decision reported as 2023 (386) E.L.T. 214 (Mad.), which had already addressed the classification of roasted areca nuts. Accordingly, Section 28-I(2)(b) prevented the Authority from pronouncing a fresh ruling on the same issue, even though the earlier litigation involved another party. The Authority also considered the applicant’s request relating to concessional Basic Customs Duty and observed that the statutory scheme governing advance rulings does not provide for partial rejection of an application. Since the classification question was barred by the earlier judicial determination, the application could not be entertained in part merely to examine the claimed exemption separately. The Authority therefore declined to issue the requested advance ruling and disposed of the application without making a fresh determination on tariff classification or exemption entitlement.
Cases Discussed:
- Commissioner of Customs Vs Shahnaz Commodities International P. Ltd. (Madras High Court) – 2023 (386) E.L.T. 214 (Mad.). Relied upon for the previously decided classification of roasted areca nuts. The Authority held that the earlier judgment attracted the statutory restriction under Section 28-I(2)(b) of the Customs Act, 1962.
- Union of India Vs Kamlakshi Finance Corporation Ltd. (Supreme Court) – 1991 (55) E.L.T. 433 (S.C.). Relied upon for judicial discipline, the binding nature of precedents and the obligation of subordinate adjudicating authorities to follow higher judicial pronouncements.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
1. A copy of this order made under sub-section (2) of Section 28-I of the Customs Act, 1962 is granted to the concerned free of charge.
2. Any appeal against this Advance Ruling order shall lie before the High Court of concerned jurisdiction, within 60 days from the date of the communication of such ruling or order.
3. The advance ruling pronounced by the Authority under Section 28-I shall remain valid for five years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.
4. Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.
Order
M/s Vardhman Vanijya Private Limited, Unit No. 304, 3rd Floor, Block 1, Attaghara, Bidhannagar-Rajarhat Municipal Corporation, North Twenty Four Parganas, 24, Parganas North, West Bengal-700136 having IEC No. AADCV1392E and PAN AADCV1392E (the applicant, in short) filed applications CAAR-1 before the Customs Authority for Advance Rulings, New Delhi (CAAR, in short) for seeking advance rulings. The applications No. 56/2026-27 were received on 10.07.2026 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 Betel nut/Areca Nuts(Whole/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 as amended by the Notification No. 41/2019 dated 31.12.2019.
2. The applicant has sought ruling in respect of the following question(s)
(i) “Whether the goods sought to be imported, namely, ‘Roasted Betel nut/Areca nut(whole/cut)’ are classifiable under HS Code 20081991 as per Schedule-1 of the Customs Tariff Act, 1975?”
(ii) “Whether subjecting the betel nuts/areca nut to the processes detailed infra would qualify the products to be described as Roasted Betel nut/Areca Nut in order to classify the same under the HS Code 20081991 of the Customs Tariff Act, 1975 or any other Chapter Heading?”
3. A personal hearing in the matter was conducted on 17.09.2026. 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 application of advance ruling and relevant provisions in this regard. I consider it necessary to first address the question of maintainability of the present applications. Section 28-I(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 to 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-I (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 Agreement. 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 questions 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 Sl No. 172 of exemption Notification No. 46/2011 dated 01.06.2011 as amended by the Notification No. 41/2019 dated 31.12.2019. 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-I(2)(b) of the Customs Act, 1962 and in adherence to the principles of judicial discipline and binding precedent, I 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 dated 01.06.2011 as amended by the Notification No. 41/2019 dated 31.12.2019, I 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.
