Customs AAR Declines Samsung’s 5% Preferential Duty Claim on Split AC Imported without PCBA & Refrigerant due to Appeal Pendency [Read Order]

The Customs Authority for Advance Rulings (CAAR), Mumbai recently declined to issue an advance ruling on an application filed by Samsung India Electronics Private Limited, regarding preferential customs duty on split air-conditioner units imported without Printed Circuit Board Assembly (PCBA) and Refrigerant, noting that a similar case was awaiting finality before the Customs, Excise And Service Tax Appellate Tribunal (CESTAT).

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The Indian subsidiary of the Korean electronics giant explained that it planned to import two configurations of split air conditioners identified as Model A and Model B. Under Model A, the company proposed to import indoor units (IDUs) without the Printed Circuit Board Assembly (PCBA) and refrigerant, while in Model B, both the indoor (IDU) and outdoor units (ODUs) were to be imported without PCBA and refrigerant.

Samsung contended that these components, though arriving in separate consignments, would together constitute complete split air conditioner units after local assembly in India, and thus queried whether such imports would qualify for preferential duty at 5% under Notification No.152/2009-Customs dated 31.12.2009, subject to the applicable Rules of Origin under Notification No.187/2009-Customs (NT).

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The Jurisdictional Commissioner of Customs, Chennai-II (Import) informed CAAR that a similar classification issue concerning split AC imports without PCBA and refrigerant was already under appeal before the CESTAT. Citing this pendency, the Department contended that the Authority was statutorily precluded from ruling on the same question.

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After examining the submissions, Prabhat K. Rameshwaram, Member, concurred with the Department, noting that the question raised by Samsung India was identical to the one pending before the Appellate Tribunal. Referring to the statutory bar under Section 28-I(2) of Customs Act, 1962, the Member observed that since the question raised in this application was similar/identical to a matter pending before the Appellate Tribunal, it would refrain from passing any ruling in the instant case.

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Accordingly, CAAR declined to entertain Samsung India’s application and disposed of it without examining the merits of the preferential duty claim.

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