GHN Ltd. imported certain items on 14th October 2023. According to GHN Ltd, these items should be classified under chapter heading no. XXXX.AB of…
CA Final · Indirect Tax Laws · PYQS · May 2024
GHN Ltd. imported certain items on 14th October 2023. According to GHN Ltd, these items should be classified under chapter heading no. XXXX.AB of the Customs Tariff schedule whereas the Department's view was that these items should be classified under different chapter heading number XXXX.AC. So, there was a dispute going on between GHN Ltd. and the Department regarding the classification of product. Meanwhile, an exemption notification was issued on 26th October 2023 which exempted the disputed goods by classifying it under chapter heading number XXXX.AB for the future imports from 30th October 2023 onwards. Now, GHN Ltd. claimed that since the Department exempted product under chapter heading XXXX.AB. Hence, its items are also to be classified under the same heading even though it imported goods earlier. Discuss with the help of decided case law if any, whether the contention of GHN Ltd. is correct as per law? Note: Chapter headings given above are just an example and not the real one.
Suggested Answer and Working Notes:
The contention of GHN Limited is correct as per law. As per judicial ruling, if an exemption notification classifies a product under a specified Chapter heading from a specific date, the said classification can be accepted for the period prior to it being beneficial to the applicant.
Topics: Customs: Classification of Imported and Export Goods
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