Customs Act, 1962 Section 28e — Definitions
Customs Act, 1962 · Definitions
Plain-English Explanation
Overview
Section 28E of the Customs Act, 1962, is a crucial definitional section. It clarifies the meaning of several terms used within Chapter V B of the Act, which deals with Advance Rulings. Understanding these definitions is essential for anyone seeking or involved in the process of obtaining an advance ruling on customs matters.
Who Does This Apply To?
This section primarily applies to:
- Importers and Exporters dealing with goods whose customs classification, valuation, or applicability of notifications are uncertain.
- Applicants seeking an advance ruling from the Customs Authority for Advance Rulings (Authority).
- The Customs Authority for Advance Rulings (Authority) responsible for issuing advance rulings.
How It Works
This section defines key terms used in the context of advance rulings:
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Advance Ruling: This means a written decision on questions raised by an applicant prior to the importation or exportation of goods, relating to matters specified in Section 28H such as classification of goods, valuation of goods, applicability of notifications, etc. It provides clarity before the transaction occurs. Think of it as pre-clearance on specific tax issues.
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Applicant: Defines who can apply for an advance ruling. Specifically:
- Any person holding a valid Importer-Exporter Code (IEC) Number under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992.
- Any person exporting goods to India (foreign exporters).
- Any person with a justifiable cause, as determined by the Authority. This allows for flexibility where neither an IEC is held nor goods are exported to India, but a legitimate reason for seeking an advance ruling exists.
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Application: This refers to the formal request made to the Authority as per Section 28H(1), seeking an advance ruling. The application must contain the prescribed information and be filed in the prescribed manner.
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Authority: This is the Customs Authority for Advance Rulings, established under Section 28EA of the Act. This is the body responsible for actually issuing the advance rulings.
Important Conditions & Exceptions
- Condition 1: The applicant must genuinely have a question related to the goods intended for import or export. The ruling cannot be for academic purposes or hypothetical scenarios.
- Condition 2: An advance ruling is binding only on the applicant and the customs officers concerned with the specific goods.
- Exception: If the facts presented by the applicant are found to be incorrect or suppressed, the advance ruling can be revoked.
Practical Example
ABC Importers Pvt. Ltd. plans to import a specialized type of machinery. They are unsure about its correct customs classification, which could affect the applicable duty rate. ABC Importers holds a valid IEC number. They file an application with the Authority, detailing the machinery's specifications and their interpretation of the relevant tariff headings. The Authority examines the application and issues an advance ruling clarifying the appropriate classification. ABC Importers can now import the machinery with certainty about the applicable duty.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
Who qualifies as an 'applicant' for seeking an advance ruling under Section 28E of the Customs Act, 1962?
An 'applicant' under Section 28E(c) is a person holding a valid Importer-exporter Code Number, or exporting goods to India. A person with a justifiable cause, as determined by the Authority, may also apply. All applicants must apply under Section 28H for an advance ruling.
What constitutes an 'advance ruling' as defined in Section 28E of the Customs Act, 1962?
An 'advance ruling' as per Section 28E(b) is a written decision provided by the Authority on specific questions raised by an applicant regarding goods prior to their import or export. This ruling addresses matters outlined in Section 28H and aims to provide clarity on customs-related issues before transactions occur.
Where can I find the procedures for making an 'application' for advance ruling according to the Customs Act, 1962?
The procedure for submitting an 'application' is specified in sub-section (1) of Section 28H of the Customs Act, 1962, as indicated in Section 28E(d). This section details the format, content, and process for submitting your request to the Authority.
Who is the 'Authority' referred to in Section 28E(e) of the Customs Act, 1962, and what are its responsibilities?
The 'Authority', as defined in Section 28E(e), is the Customs Authority for Advance Rulings appointed under Section 28EA. This Authority is responsible for issuing advance rulings on questions related to customs duties and related matters, providing clarity and predictability to importers and exporters.
What types of questions can be raised in an application for advance ruling under Section 28E and 28H of the Customs Act, 1962?
Section 28E defines 'advance ruling' with reference to questions raised under Section 28H. The questions must pertain to the classification of goods, valuation, applicability of notifications, determination of origin, or any other matter notified by the government. The key aspect is that the query must relate to goods that are intended for import or export.
Are there any restrictions on who can apply for an advance ruling based on recent amendments to Section 28E of the Customs Act, 1962?
Section 28E(c) specifies the eligibility criteria for applicants, requiring a valid Importer-exporter Code Number, or exporting goods to India. The Authority can also accept applications from parties with a justifiable cause. Examine the most recent notifications to ensure compliance with any recent legislative or procedural changes.
How does understanding the definitions in Section 28E impact my customs compliance?
A clear understanding of definitions in Section 28E, particularly 'applicant', 'advance ruling' and 'Authority', is crucial for effective customs compliance. Accurately determining your eligibility to apply for an advance ruling, knowing what constitutes a valid ruling, and understanding the Authority's role can help you navigate customs procedures efficiently and avoid potential disputes.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Advance Ruling Definition | A written decision on questions in Section 28H concerning goods prior to import/export. |
| Applicant Eligibility - IEC Holder | A person holding a valid Importer-Exporter Code Number can apply for an advance ruling. |
| Applicant Eligibility - Exporter to India | A person exporting goods to India can apply for an advance ruling. |
| Applicant Eligibility - Justifiable Cause | A person with a justifiable cause, satisfactory to the Authority, can apply. |
| Application Definition | Application means an application made to the Authority under sub-section (1) of section 28H. |
| Authority Definition | The Customs Authority for Advance Rulings appointed under Section 28EA. |
Amendment History
Omitted by section 64 of the Finance Act, 2018( 13 of 2018). Before omission clause (a) of section 28E stood as under: (a) "activity" means import or export and includes any new business of import or export proposed to be undertaken by the existing importer or exporter, as the case may be; as substituted by section 68 of Act 17 of 2013, for clause (a) (w.e.f. 10-5-2013). Clause (a), before substitution, stood as under: '(a) "activity" means import or export:'
Substituted by Finance Act, 2018( 13 of 2018), section 64 (w.e.f. 29.03.2018). Clause (b), before substitution by Act 13 of 2018, stood as under: (b) "advance ruling" means the determination, by the Authority, of a question of law or fact specified in the application regarding the liability to pay duty in relation to an activity which is proposed to be undertaken, by the applicant;"
Omitted (w.e.f. 4-4-2021) s. 5 (a) of The Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 (2 of 2021)
Substituted by Finance Act, 2018( 13 of 2018), section 64 (w.e.f. 29.03.2018). Earlier clause (c) as substituted by section 65(a) of Act 18 of 2005, (w.e.f. 13-5.2005) stood as under: (c) "applicant" means - (i) (a) a non-resident setting up a joint venture in India in collaboration with a non-resident or resident; or (b) a resident setting up a joint venture in India in collaboration with a non-resident; or (c) a wholly owned subsidiary Indian company, of which the holding company is a foreign company, who or which, as the case may be, proposes to undertake any business activity in India; (ii) a joint venture in India; or (iii) a resident falling within any such class or category of persons, as the Central Government may, by notification in the Official Gazette, specify in this behalf, and which or who, as the case may be, makes application for advance ruling under sub-section (1) of section 28H; Explanation. - For the purposes of this clause,"joint venture in India" means a contractual arrangement whereby two or more persons undertake an economic activity which is subject to joint control and one or more of the participants or partners or equity holders is a non-resident having substantial interest in such arrangement.' Prior to this, clause (c) was substituted by Act 32 of 2003, section 110(a) (w.e.f. 14-5-2003). Clause (c), before substitution by Act 18 of 2005, stood as under: '(c) "applicant" means- (i) a non-resident setting up a joint venture in India in collaboration with a non-resident or a resident; or (ii) a resident setting up a joint venture in India in collaboration with a non-resident; or (iii) a wholly owned subsidiary Indian company, of which the holding company is a foreign company , who proposes to undertake any business activity in India and makes application for advance ruling under sub-section (1) of section 28H:'
Omitted by s. 90 of Finance Act 2022 (6 of 2022).
Substituted by Finance Act, 2018 (13 of 2018), section 64( w.e.f. 29.03.2018). Earlier clause (e) stood as under: (e) "Authority" means the Authority for Advance Rulings constituted under section 245-O of the Income-tax Act, 1961 as substituted by section 93 of the Finance Act, 2017, for clause (e). Earlier clause (e) was amended by Act 18 of 2005, sec. 65(b) (w.e.f. 13-5-2005). Clause (e), before substitution, stood as under: '(e) "Authority" means the Authority for Advance Ruling (Central Excise, Customs and Service Tax) constituted under section 28F:'.
Omitted (w.e.f. 4-4-2021) s. 5 (a) of The Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 (2 of 2021)
Omitted by s. 90 of Finance Act 2022 (6 of 2022).