CUSTOMS AUTHORITY FOR ADVANCE RULINGS

[Mr. M. GOVINDARAJAN]

Advance ruling

Section 28E(b) of the Customs Act, 1962 (‘Act’ for short) defines the expression ‘advance ruling’ as 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 Central Government made the Customs (Advance Rulings) Rules, 2002 with effect from 23.08.2002.  The said Rules were rescinded vide Notification No. 02/2021-Customs (NT), dated 04.01.2021.

Regulations

The Authority for Advance Ruling made ‘The Authority for Advance Rulings (Customs, Central Excise and Service Tax) Procedure Regulations, 2005’ with effect from 26.01.2005.  In supersession of the said regulations the Board made ‘The Customs Authority for Advance Rulings Regulations, 2021’, vide Notification No.01/2020-Customs (NT), dated 04.01.2021 which came into effect from 01.04.2021.

Questions for advance ruling

Section 28H (2) of the Act provides that the question on which the advance ruling is sought shall be in respect of-

• classification of goods under the Customs Tariff Act, 1975;
• applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty;
•  the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act;
• 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;
• 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;
• any other matter as the Central Government may, by notification, specify.

Authority for Advance Ruling

The Regulations prescribe two Authorities for Advance Ruling having the following jurisdictions-

• Customs Authority for Advance Rulings, Delhi. - Jammu & Kashmir, Himachal Pradesh, Punjab, Chandigarh, Uttar Pradesh, Delhi, Haryana, Uttarakhand, Bihar, Jharkhand, West Bengal, Andaman and Nicobar Islands, Sikkim, Odisha, Rajasthan, Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Ladakh.
• Customs Authority for Advance Rulings, Mumbai - Andhra Pradesh, Telangana, Karnataka, Kerala, Lakshadweep, Puducherry, Tamil Nadu, Gujarat, Dadra and Nagar Haveli and Daman and Diu, Maharashtra, Goa, Madhya Pradesh and Chhattisgarh.

Filing application before Authority

• An applicant desirous of obtaining an advance ruling may make an application in Form – CAAR – 1, stating the question on which the advance ruling is sought.
•  The application shall be made in quadruplicate and be accompanied by a fee of ten thousand rupees in the form of demand draft drawn in favor of ‘Customs Authority for Advance Rulings, Delhi” or “Customs Authority for Advance Rulings, Mumbai’, as the case may be.
• The applicant may be represented by any person resident in India who is authorized in this behalf.
• The application, the verification contained therein and all relevant documents accompanying such application shall be signed, -

• in the case of an individual, by the individual himself, or where the individual is absent from India, by the individual concerned or by some person duly authorized by him in this behalf; and where the individual is a minor or is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;
• in the case of a Hindu undivided family, by the Karta of that family and, where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of that family;
•  in the case of a company or local Authority, by the principal officer thereof authorized by the company or the local Authority, as the case may be, for such purpose;
•  in the case of a firm, by any partner thereof, not being a minor;
•  in the case of an association, by any member of the association or the principal officer thereof; and
• in the case of any other person, by that person or some person competent to act on his behalf.

• The application shall be accompanied by evidence that the person who has signed the application, verification and other documents is authorized or competent to sign under these regulations.
• Every application, its verification, annexure, statements and supporting documents shall be on A-4 size paper and should be neatly and legibly written, typed or printed leaving a left margin of five centimeters and only on one side of a page in double-line spacing. 
• The language of the Authority shall be Hindi or English.   Where any document is in a language other than Hindi or English, a Hindi or English translation thereof duly attested shall be filed along with the original document.
• If the applicant is not based in India, he shall, inter alia, indicate in a separate annexure to the application - 

• his postal and e-mail address abroad;
• the name and address including e-mail address of his representative in India, if any, authorized to act on his behalf and to receive notices or other documents sent by the Authority.

• Applications shall be received between 10:00 a.m. and 1:00 p.m. and between 2:00 p.m. and 5:00 p.m. on any working day at the respective office of the Authority.
• The application shall be deemed to have been submitted to the concerned Authority on the date on which it is received in the office of the said Authority.

Form CAAR – 1

The Form CAAR – 1, the application for customs advance ruling, contains the following details which are to be furnished by the applicant-

• Details of the applicant;
• Importer-Exporter Code of the applicant, if any;
• Jurisdictional Authority;
• Details of Authorized representative, if any;
• Status of the applicant;
• Nature of activity (proposed/present) on which advance ruling is sought;
• Present status of activity;
• Question for which advance ruling is sought;
• Statements of relevant facts having a bearing on the question(s) raised;
• Statement containing the applicant’s interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicants view point and submissions on issues on which the advance ruling is sought);
• Whether the question(s) raised is pending in the applicant’s case before any officer of Customs, Appellate Tribunal or any Court of Law? If so, provide relevant details?
• Whether a similar matter as raised in the question(s) by the applicant has already been decided by the Appellate Tribunal or any Court?
• Jurisdictional Principal Commissioner/ Commissioner of Customs i.e. from where import/export is proposed to be undertaken;
• List of documents/statement attached (attach the list on a separate sheet, if necessary);
• Particulars of the fee paid;
• Signature of Applicant/Authorized Representative;
• Verification.
• The applicant is to declare that the question (s) on which the advance ruling is sought is/are not pending in his case before any officer of Customs, Appellate Tribunal or any Court. 

On receipt of application

• The officer receiving the application shall put his initials and the stamp of the Authority thereon together with the date and time of receipt thereof and shall also acknowledge its receipt and he shall also enter the particulars of the application in the register of daily filing, maintained for that purpose. 
•  The application shall be scrutinized by the officer authorized by the Secretary for that purpose for any deficiency or defect and any deficiency or defect noticed in the application or annexure thereof shall be communicated to the applicant at the earliest. 
• The applicant shall be required to rectify the deficiency or defect within the time granted by the Secretary and such application shall be deemed to have been received on the date when it is re-submitted after removal of such deficiency or defect, for the purposes of sub-section (6) of section 28-I.
•  Date of receipt of an application free from any defect or deficiency in the secretariat of the Authority shall be deemed to be the date of the application.
• When an application is free from any defect or deficiency, an endorsement ‘examined and registered’ shall be made thereon and a serial number allotted thereto.
• In case the defect or deficiency is not removed or made good within the time granted the application shall be placed before the Authority for appropriate orders.
• On allotment of serial number to an application, a copy of the application shall be forwarded to the concerned Principal Commissioner or Commissioner of Customs for furnishing relevant records with comments, if any.
• On receipt of the relevant records or comments from the Principal Commissioner or Commissioner concerned or after expiry of two weeks or such further period as may be allowed by the Authority, the application shall be placed before the Authority for passing orders.

Rejection of application

In a case where the Authority considers that prima facie the application is liable for rejection, a notice shall be issued to the applicant indicating the reasons there for together with the comments, if any, of the Principal Commissioner or Commissioner concerned, giving an opportunity to the applicant of being heard in person or through an authorized representative. A copy of the notice shall be endorsed to the Principal Commissioner or Commissioner concerned.     On the date fixed for hearing or such other date to which the case is adjourned, the Authority may pass an order either allowing or rejecting the application. A copy of the order passed by the Authority shall be sent to the applicant and the Principal Commissioner or Commissioner concerned.

Withdrawal of application

 The applicant may withdraw his application within two weeks from the date of the application and thereafter only with the leave of the Authority.

Procedure

• Where an application is allowed, the comments of the Principal Commissioner or Commissioner concerned and further material, if any, shall accompany a copy of the order sent to the applicant drawing his attention to the statutory provisions that he has a right to be heard, if he so desires, before pronouncement of advance ruling and the response of the applicant should reach the Authority within two weeks of receipt of the copy of the order. 
• The service of notice or document shall be made by hand delivery or by registered post with acknowledgement due or by speed post or by courier service or by any other means of transmission of documents including e-mail or fax.
•  Notices or documents required to be served on the parties to the application or petition shall be deemed to have been served, if delivered at the address indicated in the application or petition and in the case of a Principal Commissioner or Commissioner, at the office of the Principal Commissioner or Commissioner concerned.
• An authorized representative appearing for the applicant or the Principal Commissioner or Commissioner, as the case may be, shall, before the commencement of the hearing, file before the Secretary, a document authorizing him to appear for the said applicant or the Principal Commissioner or Commissioner.
•  Every such authorized representative appearing shall notify to the Secretary the address of his office, before the commencement of the hearing.
• No person other than an applicant or the concerned Principal Commissioner or Commissioner or their authorized representative, shall be heard in person save by special leave of the Authority.
• An authorized representative shall appear before the Authority in dress specified for the members of his profession by the competent professional body, if any.  All other persons appearing before the Authority shall be properly dressed.
• No person shall be allowed to bring mobile phones, sticks, arms or other weapons in the room where the Authority conducts the proceedings.
• Hearing of the application shall normally be held between 11:00 a.m. and 5:00 p.m. on a working day in the office of the Authority or an alternative place fixed by the Authority.
• In the absence of the request for personal hearing from the applicant, advance ruling shall be pronounced after hearing the Principal Commissioner or Commissioner concerned or his authorized representative, if present, on the date of hearing and on the basis of records available with the Authority. 
• On the day fixed for hearing or any other day to which the case is adjourned, the Authority shall hear the applicant or his authorized representative in cases where it is proposed to reject the application or where the applicant seeks an opportunity of being heard; the Authority may also hear the Principal Commissioner or Commissioner or his authorized representative, if it considers it necessary, before pronouncing its advance ruling. 
•  In an appropriate case, the Authority may call upon any person to depose or to supply such material or document, as it may consider necessary to arrive at a decision.
• The Authority may, in an appropriate case where an important question of law arises, make a reference to a law officer of the Central Government including the Attorney-General and Solicitor General to furnish his opinion to the Authority in the matter, as per the extant procedure in this regard.
• The Authority may, on such conditions as the circumstances of the case require, adjourn the hearing of the application.
• Where the Authority reserves an application for consideration, the advance ruling or such other order as the Authority may deem fit shall be pronounced in the open court under intimation to the applicant and the Principal Commissioner or Commissioner concerned and a copy of the advance ruling or order shall be served upon the parties to the application. 

Ex-parte order

Where on the day fixed for hearing or any other day to which the case is adjourned, the applicant or the Principal Commissioner or Commissioner does not appear in person or through an authorized representative when the application is called for hearing, the Authority may dispose of the application ex parte on merits.

Where an application has been disposed of  under this rule  and the applicant or the Principal Commissioner or Commissioner, as the case may be, applies within seven days of receipt of a copy of the order or advance ruling  and the Authority is satisfied that there was sufficient cause for his non-appearance when the application was called for hearing, the Authority may, after allowing the opposite party a reasonable opportunity of being heard, make an order setting aside the ex parte order or advance ruling and restore the application for fresh hearing.

Continuation of proceedings

Where the applicant, being an individual, dies, or being a company or association of persons, whether incorporated or not, is  wound up or dissolved or disrupted or amalgamated or succeeded to by any other person or otherwise comes to an end, the application shall not abate and the proceedings in the application may be continued by the executor, administrator, liquidator, receiver or assignee or other legal representative of the applicant, as the case may be, on a petition  made in this behalf, if the Authority considers that the circumstances so justify. 

Order

Every order or advance ruling of the Authority shall be duly signed by the Authority pronouncing the order or advance ruling and bear the official seal of the Authority.   A certified copy of order or advance ruling of the Authority shall be communicated to the applicant and the Principal Commissioner or Commissioner under the signature of the Secretary or an officer of the Authority authorized by the Secretary in this behalf and bear the official seal of the Authority.

Modifications of Advance Ruling

The Authority may suo motu  or on a petition by the applicant or the Principal Commissioner or Commissioner, but before pronouncement of an advance ruling or before an advance ruling pronounced has been given effect to, on being satisfied that an order or advance ruling was pronounced under mistake of law or fact, modify such order or advance ruling in such respects as it considers appropriate, after allowing the applicant and Principal Commissioner or Commissioner concerned a reasonable opportunity of being heard.

Rectification of mistakes

The Authority may, with a view to rectifying any mistake apparent from the record, amend any advance ruling pronounced by it before such ruling has been given effect to.   Such amendment may be made suo motu or when the mistake is brought to the notice of the Authority by the applicant or the Principal Commissioner or Commissioner, but only after allowing the applicant and the Principal Commissioner or Commissioner a reasonable opportunity of being heard.

Advance ruling void

Where it is brought to the notice of the Authority on a representation made by the Principal Commissioner or Commissioner concerned or otherwise that an advance ruling pronounced by it has been obtained by the applicant by fraud or misrepresentation of facts, the matter shall be examined by the Authority and any such representation shall be supported by an affidavit duly attested and accompanied with attested copies of documents relied upon.    If the Authority after examining the representation is prima facie of the view that the advance ruling appears to have been obtained by the applicant by fraud or misrepresentation of facts, the applicant shall be given a notice to explain as to why the ruling should not be declared void ab initio.

Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.