Case Law Details
In re M/s Isha Exim (CAAR Delhi)
M/s Isha Exim, P-586, Block-N, New Alipur, Kolkata. West Bengal-700053, an applicant having IEC number 0214014525 had filed an application dated 05.05.2016. seeking advance ruling under section 28-H of the Customs Act, 1962 before the Authority for Advance Rulings (Central Excise, Customs and Service Tax), New Delhi (AAR, in short). The said application was received in the 0/o AAR on 06.05.2016. The application had mentioned Principal Commissioner of Customs (Import). INCH and Principal Commissioner of Customs (Import), Sea Customs, Chennai as the concerned Principal Commissioner of Customs.
2. In respect of the said application dated 05.05.2016, the then Authority for Advance Rulings (Central Excise, Customs and Service Tax) pronounced Ruling No. AAR/44/Cus/02/2017 dated 31.03.2017 on the question of classification of the following four items, namely unflavoured supari, flavoured supari, API supari and Chikni supari, holding the said four items to be classifiable under Customs Tariff Heading 2106 90 30.
3. Thereafter, vide letter dated 19.02.2020, Commissioner of Customs, Chennai-II Commissisonerate [having jurisdiction of seaport (imports)] in a letter addressed to the Additional Commissioner, AAR requested for “re-examination of Advance Ruling Order No.AAR/44/Cus/02/2017 dated 31.03.2017 under Section 28K of the Customs Act of M/s Isha Exim, Mumbai”. The said letter enclosed the representation supported by an affidavit (Notarised) and also accompanied with attested copies of relied upon documents as per Regulation 23 of Authority for Advance Rulings (CEST) Procedure Regulation, 2005.
4. In the meanwhile, consequent upon the amendments in Chapter—VB of the Customs Act relating to Advance Rulings and subsequent appointment of Customs Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai with effect from 04.01.2021, the said letter was transferred to CAAR, New Delhi along with the pending applications in terms of section 28-F (3) ibid and regulation 31 of CAAR Regulations, 2021.
5. This Authority, recognizing its status as the successor entity to the erstwhile AAR, insofar as it relates to advance rulings in Customs and matters incidental thereto, has taken up the aforesaid representation by the concerned Commissioner of Customs, Chennai-II for re-examination of Advance Ruling Order No. AAR/44/Cus/02/2017 dated 31.03.2017 under Section 28K by erstwhile AAR, New Delhi, which had remained unattended by the said AAR.
6. It is observed that this Authority has been constituted by the Central Board of Indirect Taxes and Customs in exercise of powers conferred by section 28 of the Customs Act, 1962. Further, section 28M ibid enjoins CAAR to follow the procedure as may be prescribed, which has since been prescribed under the Customs Authority for Advance Rulings Regulations, 2021 (CAAR Regulations, in short).
7. Section 28K ibid provides for an advance ruling to be declared void ub initio by the Authority, where the Authority finds, on a representation made to it by the concerned Principal Commissioner/Commissioner of Customs that the said advance ruling has been obtained by the applicant by fraud or mis-representation of facts. Similarly, regulation 26 provides for the powers and prescribes the procedure to be adopted for handling such representation.
8. In the instant case, after going through the representation dated 19.02.2020 made before the erstwhile AAR for re-examination of the said advance ruling by the erstwhile AAR, I find that the crux of the representation is that “it appeared from the said test report that the process of roasting involved in the preparation of `unflavoured’ supari as declared by the importer before the Advance Ruling Authority was not carried out on the imported goods”. It is, therefore, alleged that “the importer has misrepresented facts before the Authority.” The representation goes on to argue that “the Authority has erred in proposing to classify the subject goods under CTH 21069030 by not emphasizing on the word “preparation” mentioned in Explanatory Note 2 to Chapter 21 of the HSN.”
9. I must at the outset clarify that correction of error, as contended by the concerned Commissioner of Customs, Chennai —II, is not an objective covered by the scope of section 28K of the Customs Act read with regulation 26 of CAAR Regulations, 2021.
10. Further, on careful consideration of the documents submitted by the concerned Commissioner of Customs and having pronounced advance rulings on the same question of classification of betel nut items, albeit disagreeing with the rulings of the erstwhile AAR, I am not able to accord the crucial role ascribed to the process of “roasting” as has been claimed by the concerned Commissioner. The process of manufacture of four varieties of supari, involved inter alia boiling and/or drying/roasting, with the objective to minimize moisture content. On perusal of the said advance ruling, it is obvious to me that the ruling of the Hon’ble AAR was not dependent on the involvement or otherwise of the process of “roasting”. Therefore, I am of the considered opinion that the contention of the concerned Commissioner of Customs in this regard, cannot be a ground for invocation of the provisions of section 28K of the Customs Act read with regulation 26 of CAAR Regulations, 2021.
11. In view of the above, I decline to admit the said representation dated 19.02.2020 by the Commissioner of Customs, Chennai-II against the advance ruling No. AAR/44/Cus/02/2017 dated 31.03.2017 pronounced by the erstwhile Hon’ble AAR.
