Case Law Details
In re Larsen & Toubro Ltd. (CAAR Mumbai)
This is a request for advance ruling seeking classification of tunnel boring machine and its components, as well as the eligibility of the said goods for exemption from customs duty. The request for advance ruling was filed in the secretariat of the erstwhile AAR, New Delhi on 14.10.2019. No pronouncements were made on the said application within three months as required under the provisions of sub-section 6 to section 28-I of the Act for the reason for non-constitution of the requisite bench. I find it difficult to agree with the assertion of the applicant that the limitation prescribed under law is a mere procedural requirement. I am mindful of the fact that the limitation of three months for pronouncing an advance ruling is prescribed in the Act itself and not in any delegated piece of legislation. If the line of argument advanced by the applicant is to be accepted, it would lead to the conclusion that the limitation provided under section 28(8) of the Act for adjudication of a show cause notice is merely procedural. In that event, the legal stipulation that if the show cause notice is not adjudicated within the time allowed, the result would that no notice has actually been issued, would become redundant. It is a settled proposition of law that any interpretation of law which leads to a manifest absurdity has to be eschewed. Besides, being a creature of statute, I am squarely bound by the four corners of the statute, and therefore, considering the express mandate of the statute, I find no reason to depart from it. The application was transferred to the secretariat of the CAAR, Mumbai in February, 2021. In the proceedings before me, I am now faced with the situation where the act of import is purportedly complete. According to section 28E(b) of the Act, “advance ruling means a written decision on any of the questions referred to in section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation.” The very definition of advance ruling, as reproduced above, precludes any possibility of pronouncing any ruling in the present proceedings, where the act of import stands concluded. Besides, it also appears that the relevant imports have been subjected to provisional assessment. It is clear from a plain reading of section 2(2) of the Act that assessment includes provisional assessment and since the questions involved in the present proceedings are already pending in the applicant’s case before an officer of customs, the proviso (a) to sub-section 2 of section 28-I of the Act does not allow me to pronounce any advance ruling as requested. It is settled law that assessment is a quasi-judicial proceeding requiring application of mind and speaking decisions. I am, therefore, not convinced with the argument that no independent proceeding is pending before any officer of customs, as argued by the applicant. I also take note of the fact that one of the questions raised in the application, i.e., eligibility for nil rate of duty under entry no. 446 of the notification no. 50/2017-Cus., dated 30.06.2017 has lost relevance in view of the amending notification no. 2/2021, dated 01.02.2021.
In light of the discussions in the preceding paragraph, without going into the merits of the application, I reject the application for advance ruling.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s. Larsen and Toubro (the applicant, in short) filed an application for advance ruling before the erstwhile Authority for Advance Ruling, New Delhi (AAR, in short) on 14.10.2019. It appears that no advance ruling has been given on the said application by the AAR, and on the appointment of Customs Advance Ruling Authorities (CAAR, in short) at New Delhi and Mumbai under the provisions of section 28EA of the Customs Act, 1962 (the Act, in short) w.e.f. 04.01.2021, the said application has been transferred to the CAAR, Mumbai in February, 2021 in accordance with the provisions of subsection 3 of section 28F of the Act. Scrutiny of the application by the Secretary to the CAAR, Mumbai in terms of the regulation 2(c) of the Customs Advance Rulings Regulations, 2021, notified vide notification no. 01/2021-Cus. (N.T.), dated 04.01.2021 revealed that the time limit of 3 months for pronouncing the advance ruling as provided under sub-section 6 of section 28-I of the Act had already expired on 04.01.2021, the day the CAAR, Mumbai came into existence. Therefore, the Secretary to the CAAR, Mumbai pointed out to the applicant that their original application has lapsed and that, if they are still desirous of obtaining an advance ruling, they need to apply afresh. However, as a trade facilitation measure, the application fee prescribed under sub-section 3 of section 28H of the Act was waived as it was paid originally and no advance ruling was pronounced. A communication dated 16.02.2021 from Sri S. Murugappan, Advocate and authorised representative of the applicant was received by the Secretary to the CAAR, Mumbai on 19.02.2021 affirming that the declarations made in the original application remain valid and unchanged and also requesting to process the application for advance ruling.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
