Inalfa Gabriel Sunroof Systems Pvt. Ltd. Vs Customs Authority for Advance Ruling (Madras High Court)
Conclusion: Scope of appeal under Section 28KA of the Customs Act, 1962, was limited, as the ruling obtained was binding on the persons mentioned in Section 28J of the Customs Act, 1962. Unless the ruling of the Authority was palpably arbitrary or irrational or without any proper reasoning, they could not be interfered by this Court under Section 28KA of the Customs Act, 1962.
Held: Assessee-company had sought classification of the goods under CTH 8708 99 00 (Other parts and accessories of motor vehicles), with an alternate plea for classification under CTH 7610 90 20 (Parts of structures, not elsewhere specified). Authority, however, held that the goods merit classification under CTH 8708 29 00 as other parts and accessories of the bodies of motor vehicles. Authority reasoned that the Assy Guide Rails, being essential to the sunroof mechanism of motor vehicles, satisfied the conditions under Section XVII, Note 3 and relevant HSN Explanatory Notes, and were neither excluded by Note 2 to Section XVII nor specifically covered elsewhere. It further observed that Note 1(g) of Section XV excluded such goods from classification under Chapter 76. The claim under CTH 8302 was also rejected on the ground that the item was not a general-purpose accessory but an integral automotive part. It was held that as per sub-section (2) of Section 28J of the Customs Act, 1962, the Advance Ruling referred to above in sub-section (1) had to remain in force for a period of three years. If there was a change in law or facts on the basis of which the Advance Ruling was given, such Advance Ruling would cease to be in force before expiry of the aforesaid period of three years. The bench opined that assessee could not expect the said Authority to accept the contention merely because an application had been made for such Advance Ruling. The purpose of Advance Ruling was only to ensure that the clarification issued was binding for a period of three years or for a lesser period, where there was a change in law or facts on the basis of which such Advance Ruling was pronounced by the said Authority. Assessee, having invited a ruling, could not challenge the Ruling under Section 28KA merely because the Ruling had been given against assessee.
