Case Note & Summary
The litigation arose from a customs classification dispute concerning Apple Watch Bands imported by the petitioner, a company incorporated in India. The petitioner had obtained an advance ruling dated 18 March 2016 from the Customs Authority for Advance Rulings (CAAR) classifying the bands under Customs Tariff Heading (CTH) 8517 7090. The ruling was issued after the Commissioner of Customs (Import), Mumbai, had commented that the bands were classifiable under that heading. The law was amended effective 30 March 2022 to provide that advance rulings would be valid and binding for three years, making the 2016 ruling binding until 30 March 2025. On 14 November 2024, the petitioner filed an application for renewal of the advance ruling. While that application was pending, on 27 December 2024, the Additional Commissioner of Customs issued a show cause notice for the period 1 April 2021 to 22 December 2021 proposing to reclassify the non-leather Apple Watch Bands under CTH 9113 2010. The CAAR by order dated 10 March 2025 declined to entertain the renewal application, citing that a matter was pending before the adjudicating authority, relying on Section 28-I(2)(a) of the Customs Act, 1962. Subsequently, the adjudicating authority passed an order dated 25 March 2025 disposing of the show cause notice, reclassifying the bands. The petitioner challenged both orders in the Bombay High Court, contending that under Section 28-I(2)(a), only proceedings pending as on the date of the application for advance ruling or renewal were relevant, and the show cause notice issued later could not justify rejection. The petitioner also argued that the 2016 advance ruling remained binding for the show cause notice period and therefore the adjudication order was without jurisdiction. The petitioner relied on Isha Exim and other decisions. The respondents argued that on 10 March 2025 the show cause notice was pending, so the CAAR had no jurisdiction to consider the renewal application. They further contended that an audit report constituted a change of facts, and that after the CAAR rejected the renewal, the 2016 ruling was no longer binding when the adjudication order was passed. The court framed the first question as whether the CAAR was justified in rejecting the renewal application based on the subsequent show cause notice. The judgment text provided ends before the court's final operative order; therefore, the final decision is not available from the extracted material.
Headnote
A) Customs - Advance Ruling Renewal - Pendency of Proceedings Under Section 28-I(2)(a) Customs Act, 1962 - The Customs Authority for Advance Rulings rejected the renewal application filed on 14 November 2024 because a show cause notice was pending before the adjudicating authority on 10 March 2025 - The petitioner argued that only proceedings pending as on the date of the application were relevant, and the show cause notice was issued later on 27 December 2024 - The court examined the scope of Section 28-I and the timing of pendency (Paras 7, 12, 18-19).
B) Customs - Classification of Apple Watch Bands - CTH 8517 7090 versus CTH 9113 2010 - Customs Act, 1962, Sections 28-I and 28-I(2)(a) - The advance ruling dated 18 March 2016 classified Apple Watch Bands under CTH 8517 7090 and remained binding until 30 March 2025 - The show cause notice dated 27 December 2024 sought reclassification under CTH 9113 2010 for the period 1 April 2021 to 22 December 2021 - The petitioner contended the notice was without jurisdiction due to the binding ruling (Paras 5, 8).
C) Customs - Adjudication Order - Failure to Consider Jurisdictional Objection - Customs Act, 1962, Section 28-I - The petitioner argued that the adjudicating authority did not decide the specific objection based on the binding advance ruling and the decision in Isha Exim - The respondents contended that after CAAR rejected the renewal on 10 March 2025, the ruling was no longer binding when the adjudication order was passed on 25 March 2025 - The court was to determine the validity of the adjudication order considering the CAAR order (Paras 9, 14-15, 18).
Issue of Consideration
Whether the Customs Authority for Advance Rulings was justified in declining to entertain the renewal application dated 14 November 2024 on the ground of a show cause notice issued on 27 December 2024; whether the adjudication order dated 25 March 2025 was without jurisdiction due to the binding advance ruling for the show cause notice period.
Law Points
- Advance ruling validity period three years from 30 March 2022
- Section 28-I procedure
- pendency must exist on date of application
- binding nature of advance ruling
- show cause notice cannot override advance ruling for covered period
Case Details
2025 LawText (BOM) (09) 131
Writ Petition (L) No. 13340 of 2025
M. S. Sonak, Advait M. Sethna
Rohan Shah, Vidhushi Maheshwari, Chandni Tanna, Prathamesh Chavan, Maya Majumdar, Niyati Mankad, Priyanka Singh
1. Customs Authority for Advance Rulings, New Customs House, Ballard Estate, Mumbai; 2. Additional Commissioner of Customs, Adjudication Cell, ACC, Mumbai Zone-III, Mumbai; 3. Union of India, Ministry of Finance, Department of Revenue through Secretary (Revenue), North Block, New Delhi
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Nature of Litigation
Writ petition under ordinary original civil jurisdiction challenging CAAR order rejecting renewal application and adjudication order reclassifying goods.
Remedy Sought
Petitioner sought to quash and set aside CAAR order dated 10 March 2025 (to the extent it concerned Apple Watch Bands) and adjudication order dated 25 March 2025; sought rule absolute.
Filing Reason
CAAR declined to entertain renewal application for advance ruling dated 18 March 2016 on ground that show cause notice was pending; adjudication order confirmed reclassification of Apple Watch Bands from CTH 8517 7090 to CTH 9113 2010 for period 1 April 2021 to 22 December 2021.
Previous Decisions
Advance Ruling dated 18 March 2016 classified Apple Watch Bands under CTH 8517 7090; CAAR order dated 10 March 2025 rejected renewal; Additional Commissioner order dated 25 March 2025 disposed of show cause notice.
Issues
Whether the Customs Authority for Advance Rulings was justified in declining to entertain the renewal application dated 14 November 2024 on the ground of issuance and pendency of the show cause notice dated 27 December 2024 before the Adjudicating Authority, considering Section 28-I(2)(a) of the Customs Act, 1962.
Whether the adjudication order dated 25 March 2025 was without jurisdiction insofar as it ignored the binding effect of the 2016 advance ruling for the show cause notice period 1 April 2021 to 22 December 2021.
Whether the adjudicating authority failed to consider the specific jurisdictional objection raised by the petitioner based on the binding advance ruling and the decision in Isha Exim.
Submissions/Arguments
Petitioner argued that under Section 28-I(2)(a) of the Customs Act, only proceedings pending as on the date of the application for advance ruling or renewal are relevant, and since the show cause notice was issued on 27 December 2024 after the renewal application filed on 14 November 2024, the CAAR could not reject the application on that ground.
Petitioner contended that the 2016 advance ruling remained valid and binding for the show cause notice period 1 April 2021 to 22 December 2021, and therefore the show cause notice dated 27 December 2024 was ex facie without jurisdiction.
Petitioner submitted that the adjudication order dated 25 March 2025 did not consider the specific objection regarding jurisdiction based on the binding advance ruling and Isha Exim decision.
Respondents argued that as of 10 March 2025, the show cause notice was pending adjudication, so the CAAR lacked jurisdiction to consider the renewal application under Section 28-I of the Customs Act.
Respondents contended that an audit report constituted a change in facts, so the 2016 advance ruling could not continue to remain valid or bind the authorities.
Respondents submitted that after the CAAR rejected the renewal application on 10 March 2025, the 2016 advance ruling was no longer valid or binding, and the adjudication order dated 25 March 2025 was therefore proper.
Judgment Excerpts
The CAAR, as noted earlier, declined to entertain the Petitioner's Renewal Application by observing that “matter is currently pending before the adjudicating authority in the applicant’s matter”.
Section 28-I of the Customs Act which deals with the procedure on receiving an application seeking an Advance Ruling, and which would include an application seeking renewal of such Advance Ruling, reads as follows:-
The first question to be determined is whether the CAAR was justified in declining to entertain Petitioner’s Renewal Application dated 14 November 2024 on the grounds of issuance and pendency of the show cause notice dated 27 December 2024 before the Adjudicating Authority (R2).
Procedural History
Advance Ruling dated 18 March 2016 classified Apple Watch Bands under CTH 8517 7090, with corrigendum dated 6 April 2016. Renewal application filed by petitioner on 14 November 2024 (filed on 18 November 2024). CAAR sought comments from jurisdictional customs officers on 28 November 2024. Show cause notice issued by Additional Commissioner of Customs on 27 December 2024 for period 1 April 2021 to 22 December 2021 proposing reclassification under CTH 9113 2010. Petitioner filed additional submissions on 8 January 2025 before CAAR. CAAR issued order dated 10 March 2025 declining to entertain renewal application. Adjudication order dated 25 March 2025 disposed of show cause notice. Petitioner filed writ petition challenging both orders. By order dated 21 July 2025, the High Court directed that the matter would be disposed of finally at the admission stage. Rule made returnable immediately, and final hearing held on 16 September 2025.
Acts & Sections
- Customs Act, 1962: 28-I, 28-I(2)(a)
