Bombay High Court Sets Aside CAAR and Adjudication Orders in Apple Watch Bands Classification Dispute

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 06.02.2026

Bombay High Court Sets Aside CAAR and Adjudication Orders in Apple Watch Bands Classification Dispute

Case Title: Apple India Pvt Ltd vs. Customs Authority for Advance Rulings & Ors.

Case Number: Writ Petition (L) No. 13340 of 2025

Case Summary:

The case revolves around the classification of Apple Watch Bands imported by Apple India Pvt Ltd. The petitioner challenged two orders:

1. CAAR Order (10 March 2025): Declined to entertain the renewal application for the Advance Ruling of 2016, which classified Apple Watch Bands under CTH 8517 7090, citing the pendency of a show cause notice issued by the 2nd Respondent on 27 December 2024.
2. Adjudication Order (25 March 2025): Issued by the Additional Commissioner of Customs, reclassifying the Apple Watch Bands under CTH 9113 2010 for the period 1 April 2021 to 22 December 2021, contrary to the 2016 Advance Ruling.

The petitioner argued that the 2016 Advance Ruling was valid and binding until 30 March 2025, and the show cause notice issued on 27 December 2024 was without jurisdiction. The petitioner also contended that the CAAR’s refusal to entertain the renewal application was based on an incorrect interpretation of Section 28-I(2)(a) of the Customs Act, 1962.

Legal Principles Considered:

1. Binding Nature of Advance Rulings: The court emphasized that an Advance Ruling remains valid and binding for the specified period unless explicitly revoked or modified.
2. Jurisdictional Challenges: The court examined whether the CAAR could decline to entertain a renewal application based on proceedings initiated after the application was filed.
3. Principles of Natural Justice: The court reiterated the importance of considering all contentions raised by the parties and providing a reasoned order.

Statutory Provisions Considered:

1. Section 28-I of the Customs Act, 1962: Governs the procedure for receiving and deciding applications for Advance Rulings, including renewal applications.
2. Section 28-I(2)(a): Specifies that the CAAR shall not allow an application where the question raised is already pending before any officer of customs, the Appellate Tribunal, or any court.

Case Citations Referred:

1. Hyosung Corporation vs. Authority for Advance Rulings (2016) 382 ITR 371: The Delhi High Court held that the question raised in an application for Advance Ruling must be pending before the relevant authority as of the date of filing the application, not the date of its consideration.
2. SRICO Projects Pvt Ltd vs. Telangana State Authority for Advance Ruling (2022) 106 G.S.T.R. 247 (Tel): The Telangana High Court ruled that proceedings initiated after the filing of an application for Advance Ruling cannot bar the authority from considering the application.
3. General Motors India Private Limited vs. State of Maharashtra (2024) 12 TMI 728 BHC: This Court held that the pendency of proceedings must be determined as of the date of filing the application for Advance Ruling.
4. Mohinder Singh Gill & Anr vs. The Chief Election Commissioner, New Delhi & Ors (1978) 1 SCC 405: The Supreme Court held that the validity of a statutory order must be judged based on the reasons mentioned in the order itself and cannot be supplemented by fresh reasons later.

Order Passed:

1. The CAAR’s order dated 10 March 2025, concerning the Apple Watch Bands, was quashed and set aside. The CAAR was directed to decide the petitioner’s renewal application dated 14 November 2024 afresh on its merits and in accordance with the law, ensuring compliance with the principles of natural justice.
2. The adjudication order dated 25 March 2025 was quashed and set aside. The matter was remanded to the 2nd Respondent for fresh disposal of the show cause notice dated 27 December 2024. The adjudicating authority was directed to consider all contentions raised by the petitioner, including the binding effect of the 2016 Advance Ruling and the impact of the decision in Isha Exim (2023 SCC OnLine Bom 2700).
3. All contentions of all parties were left open for consideration by the CAAR and the 2nd Respondent.

This case highlights the importance of adhering to statutory provisions governing Advance Rulings and the necessity of considering all contentions raised by parties in adjudication proceedings. It also underscores the principle that statutory orders must be judged based on the reasons explicitly stated within the order itself.

Source: Bombay High Court

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