Case Law Details
In re Indian Compressors Ltd. (CAAR Delhi)
On perusal of the revised Form AAR (CE-I), I find that the applicant contends that e-cycle merits classification under sub-heading 8712 00 10 of the Central Excise Tariff (sic). Noting the broad concordance between the erstwhile Central Excise tariff and the Customs tariff, I find that heading 8712 covers Bicycles and other cycles (including delivery tricycles), not motorized. Given that the good in question is admittedly e-cycle, albeit with power less than 250W, it does not prima facie meet the requirement of “not motorized” prescribed in the heading. The alternative heading 8711 covers Motorcycles (including mopeds) and cycles fitted with auxiliary motor, with or without side cars appears more appropriate, given that the e-cycle has a motor, albeit of power less than 250W. On careful reading of the application, enclosure regarding the e-cycle and deliberations during the personal hearing, I find that the application is more in the nature of a prayer for fiscal indulgence for an innovative and environment friendly mode of individual transport and not for a ruling on classification of the said mode of transport under the Customs Act, guided as it would be as per the laid down provisions of law and jurisprudence. The specific prayer for classification of e-cycle as a non-motorised cycle under heading 8712 and not 8711 is an effort to lend technical wherewithal to the said substantive prayer.
In view of the above, I find that the question posed for advance ruling, couched as it is for seeking classification of e-cycle, is essentially a prayer made for exemption from customs duty on import of such e-cycles from China, which is beyond the powers vested with this Authority. In addition, the application is not in conformity with the prescribed procedure. Further, the applicant has not been able to meet with the procedural requirements, even after being advised to do so and the modalities of doing so during the personal hearing.
In view of the foregoing, having followed the procedure laid down in section 28-1 (2) of the Customs, I conclude that the prayer made in the application is not essentially covered by section 28-H 2 (a) of the Customs Act, 1962 and beyond the scope of powers vested with this Authority. Further, the application, including the revised application, are not in conformity with the procedure laid down in CAAR Regulations, 2021.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI
M/s Indian Compressors Ltd.. 35, Okhla Industrial New Delhi- 110020 having IEC No. 0592004741 and PAN AAAC10752Q. (applicant in short). has filed an application dated 01.08.2017, seeking advance ruling regarding classification of E-cycle and applicable rate of customs duty on import of the said goods from China. The application vac received in the Authority for Advance Rulings (Central Excise, Customs and Service Tax). New Delhi (AAR, in short) on 16.08.2017.
2. The applicant was informed about deficiencies in the application vide letter dated 28.08.2017. After removal of deficiencies, revised & amended application dated 04.09.2017 seeking advance ruling was received in the AAR on 12.09.2017. In his application, the applicant had not specified the concerned Commissioner of Customs in Column No. 17. Therefore, the O/o AAR vide letter dated 26.09.2017, requested Central Board of Excise & Customs (now Central Board of Indirect Taxes and Customs, and Board, in short) to designate a Commissioner of Customs in terms of Regulation 10 of the Authority for Advance Rulings (Central Excise, Customs and Service Tax) Procedure Regulations, 2005 for the purpose of representing the Revenue’s case before the AAR. The Board vide letter dated 02.11.2017 advised that the applicant vide letter dated 04.09.2017 addressed to the AAR has identified the Commissioner of Customs (Imports), New Custom House, New Delhi as the concerned Commissioner, and therefore, the said case does not fall under the purview of Regulation 10 of the Authority for Advance Rulings (Central Excise, Customs and Service Tax) Procedure Regulations, 2005. Accordingly, O/o AAR vide letter dated 14.11.2017 sought comments from the Principal Commissioner of Customs, ACC (Imports), NCH, New Delhi, who furnished the requisite comments vide letter dated 04.01.2018. The matter was heard by the AAR and vide Order dated 09.02.2018 admitted the application. However, thereafter, no hearing on the merits of the case was held by the AAR
3. In the meanwhile, consequent upon the amendments to Chapter V-B of the Customs Act, 1962 and appointment of Customs Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai with effect from 04.01.2021, the said application was transferred to CAAR, New Delhi in terms of section 28-F (3) ibid and regulation 31 of CAAR Regulations, 2021.
4. In handling the legacy cases transferred from the erstwhile AAR, New Delhi, this Authority had held that in view of the time limit of three months for pronouncing its advance rulings from the date of receipt of the application prescribed under section 281(6) ibid, the aforesaid application received in the O/o AAR, New Delhi on 12.09.2017 had become time barred for this Authority. However, on constructive interpretation of the powers vested with this Authority, vide letter dated 13.07.2021, the applicant was advised to intimate whether they continued to be interested in obtaining ruling of this Authority, and if so either resubmit their application in the Form CAAR-I appended to Customs Authority for Advance Rulings Regulations, 2021, or simply affirm that the declarations made in the earlier application remain valid and unchanged, at the earliest to this Authority. It was also informed that the date of receipt of such resubmitted application or affirmation, as the case may be, shall be taken as date of receipt of their application under regulation 8(4); and no separate payment of the prescribed fee under regulation 6 (6) of CAAR Regulations, 2021 is required to be made.
5. The applicant did not respond to this Authority’s letter dated 13.07.21. However, during the subsequent personal hearing scheduled on 08.10.2021 to proceed further in the matter expeditiously, Shri Deepak Mani, General Manager & Authorized Representative of the applicant appeared before the Authority. During the said personal hearing, it was obvious that the applicant was not conversant with the scope and procedure of advance rulings. In addition, Authorized Representative of the applicant could not explain or pose specific questions for advance ruling before the Authority. During the personal hearing, the Authority also clarified that ruling could only be given within the extant laws, rules and regulations. Accordingly, the applicant was advised to furnish his application in prescribed form CAAR-1 with more precise questions based on the discussions during the hearing. The Authority allowed the applicant to amend/ clarify his queries as part of present application by 3 1.10.2021. The applicant was also informed that revised application in Form CAAR-I be furnished by 31.10.2021, failing which an order would be pronounced in terms of Section 28-I of the Customs Act,1962.
6. The applicant vide letter dated 21.10.2021 (received on 27.10.2021) resubmitted the application for advance ruling in the old Form, AAR(CE-I) instead of the applicable extant Form, CAAR-1 and requested for decision, in the matter. It is observed that in spite of the request made to the applicant to file application in the proper and current form for advance ruling i.e. CAAR-1, as per the extant law, the applicant has filed the application in Form AAR (CE-1), which does not meet the legal requirements prescribed under the Customs Authority for Advance Rulings Regulations, 2021. In this regard, 1 note that this Authority is a creature of statute and section 28M (1) prescribes that the Authority shall follow such procedure as may be prescribed; and the same have been prescribed vide CAAR Regulations, 2021.
7. Notwithstanding the above, before making any definitive opinion regarding the impact of such procedural non-compliance, I proceed to examine the merits of the application and the questions posed therein. I find that the applicant desires to have advance ruling that E-cycle which have power less than 250W and speed of which is under 25 km/hr and does not have any motor should be exempted from Customs duty totally or should attract duty as applicable for Bicycle as it is eco-friendly and does not need to be registered as per MV Act and ARAI, Pune. These are Pedal Assist Cycle”. Further, as per statement of relevant facts having bearing on the question raised, the applicant states that they wish to import E-Bicycle from China and would like to know the Customs duty which should be applicable for E-cycle speed of which is under 25 km/hr and with regard to statement containing applicant’s interpretation of law and/or facts, the applicant states that E-Bicycle with standard accessory should be classified and allowed to be imported under Zero duty as this is emission free and will greatly help in the reduction of air pollution. These E-cycle are user friendly as one can choose to either pedal or pedal with assistance or switch to acceleration mode if tiered E-cycle give an individual the convenience to cycle without putting much efforts.
8. As per Sub-section (2) of section 28H. advance ruling can be sought in respect of: (a) classification of goods under the Customs Tariff Act. 1975 (51 of 1975): (b) applicability of a notification issued under sub-section (1) of section 25. having a bearing on the rate of duty: (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act. (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act. 1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act;(e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 (51 of 1975) and matters relating thereto.(f) any other matter as the Central Government may, by notification, specify.
9. On perusal of the revised Form AAR (CE-I), I find that the applicant contends that e-cycle merits classification under sub-heading 8712 00 10 of the Central Excise Tariff (sic). Noting the broad concordance between the erstwhile Central Excise tariff and the Customs tariff, I find that heading 8712 covers Bicycles and other cycles (including delivery tricycles), not motorized. Given that the good in question is admittedly e-cycle, albeit with power less than 250W, it does not prima facie meet the requirement of “not motorized” prescribed in the heading. The alternative heading 8711 covers Motorcycles (including mopeds) and cycles fitted with auxiliary motor, with or without side cars appears more appropriate, given that the e-cycle has a motor, albeit of power less than 250W. On careful reading of the application, enclosure regarding the e-cycle and deliberations during the personal hearing, I find that the application is more in the nature of a prayer for fiscal indulgence for an innovative and environment friendly mode of individual transport and not for a ruling on classification of the said mode of transport under the Customs Act, guided as it would be as per the laid down provisions of law and jurisprudence. The specific prayer for classification of e-cycle as a non-motorised cycle under heading 8712 and not 8711 is an effort to lend technical wherewithal to the said substantive prayer.
10. In view of the above, I find that the question posed for advance ruling, couched as it is for seeking classification of e-cycle, is essentially a prayer made for exemption from customs duty on import of such e-cycles from China, which is beyond the powers vested with this Authority. In addition, the application is not in conformity with the prescribed procedure. Further, the applicant has not been able to meet with the procedural requirements, even after being advised to do so and the modalities of doing so during the personal hearing.
11. In view of the foregoing, having followed the procedure laid down in section 28-1 (2) of the Customs, I conclude that the prayer made in the application is not essentially covered by section 28-H 2 (a) of the Customs Act, 1962 and beyond the scope of powers vested with this Authority. Further, the application, including the revised application, are not in conformity with the procedure laid down in CAAR Regulations, 2021.
12. Therefore, I reject the application dated 01.08.2017 (received on 12.09.2017) in the 0/o AAR, without pronouncing any ruling on the question posed therein.
