2021 (8) TMI 316 - AAR - Customs

Correctness of Advance Ruling application - Effective date of Advance Ruling application - original date of filing would still remain valid or the fresh date of application has to be considered - permissible to mention multiple Principal Commissioners/Commissioners in one application for advance ruling. Effective date of Advance Ruling application - original date of filing would still remain valid or the fresh date of application has to be considered - HELD THAT - the present proceedings would be deemed to be a continuation of the earlier proceedings and not a fresh application as was initially held. The significance of this line of reasoning would be that the applicant would remain eligible for receiving advance rulings in respect of those products which have been imported after filing the advance ruling application on 03.06.2019. the definition of advance ruling as per clause (b) of the section 28E of the Act is that it is 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. Therefore a reasonable interpretation of the definition would lead one to the conclusion that once application for advance ruling has been filed and there is a delay in rendering a decision as has happened in this very instance imports made after filing the advance ruling application would not take away the right of the applicant to receive a ruling. Whether the 16 items grouped under 4 categories would merit classification under heading 23.09 of the tariff as animal feed supplements or they are required to be classified separately e.g. vitamins under heading 29.36 carotenoids under 32.04 organic acids under 29.15 etc.? - HELD THAT - The import of reading all the legal provisions cited above together leads one to the inescapable conclusion that the scheme of advance rulings in customs as contained in the Chapter VB of the Act envisages that an applicant would indicate only one port/point of entry for their proposed activity. The use of the definite article the in all these legal provisions also point to the intention of the legislature to define a specific individual and not indulge in a generic description where a singular can be read as plural and vice versa. The statutory mandate to give a ruling within 3 months of filing an application would also be difficult to comply with if applicants cite multiple ports/points of import/export as corresponding with multiple principal commissioners/commissioners and conveying their comments to the applicant and take into account the rebuttals/rejoinders of the applicant would be time consuming and would make it difficult to render advance rulings within the time prescribed in the statute. There is no doubt that the applicant needs to reapply separately in respect of each of these 16 products with sufficient details to justify compliance of the conditions laid down in the note to chapter 23 of the tariff in respect of the heading 23.09. The present application is defective and merits rejection - Application dismissed.

Summary

Issues Involved
1. Validity of the original date of filing versus the fresh date of application.
2. Permissibility of mentioning multiple Principal Commissioners/Commissioners in one application for advance ruling.
3. Permissibility of seeking advance rulings for multiple products/commodities in one application.

Detailed Analysis

Validity of the Original Date of Filing
The applicant argued that the original date of filing (03.06.2019) should be honored despite the transfer of the application to the Customs Authority for Advance Rulings (CAAR), Mumbai. Initially, it was considered that applications not disposed of by the erstwhile AAR would lapse and be treated as fresh applications upon transfer. However, upon reconsideration, it was deemed that penalizing the applicant for delays not attributable to them was undesirable. Therefore, the proceedings were deemed a continuation of the earlier ones, maintaining the original filing date. This interpretation ensures that the applicant retains eligibility for advance rulings on products imported after the initial application date.

Mentioning Multiple Principal Commissioners/Commissioners
The applicant mentioned four entry ports in their application, arguing that the law does not prohibit such an action. However, the ruling emphasized that the scheme of advance rulings under the Customs Act envisages indicating only one port/point of entry. The use of the definite article "the" in relevant legal provisions supports this interpretation. The statutory mandate to issue a ruling within three months would be compromised if multiple ports/principal commissioners were involved, as it would delay the process. Therefore, the applicant was advised to avoid such tactics to prevent delays.

Seeking Advance Rulings for Multiple Products/Commodities
The applicant sought advance rulings for 16 items grouped under four categories, contending that they are similar animal feed supplements. However, the ruling noted that the scheme of advance rulings aims to provide certainty regarding tax liability prior to importation or exportation. Given the statutory time limit of three months and the need for consultation with customs authorities, seeking rulings for multiple products in one application would be impractical. Each product must satisfy the conditions prescribed under the relevant chapter note to be classified under heading 23.09. The applicant was required to reapply separately for each product with sufficient details to justify compliance with these conditions.

Conclusion
The application was deemed defective and rejected. The applicant was advised to file fresh applications for advance rulings for each product in accordance with the law. The ruling highlighted the importance of adhering to statutory mandates and the practical implications of seeking advance rulings for multiple products or ports in a single application.