Once AAR Ruling is Upheld by Courts, Dept Cannot Reopen Classification Dispute via Review Petition: Madras HC [Read Order]
The Madras High Court rules that the department cannot reopen the settled classification via a review petition to reargue the same points.
![Once AAR Ruling is Upheld by Courts, Dept Cannot Reopen Classification Dispute via Review Petition: Madras HC [Read Order]](https://images.taxscan.in/h-upload/2025/06/13/2043707-aar-ruling-madras-high-court-taxscan.webp "Once AAR Ruling is Upheld by Courts, Dept Cannot Reopen Classification Dispute via Review Petition: Madras HC [Read Order]")
In a recent decision, the Madras High Court dismissed review petitions filed by the Commissioner of Customs, ruling that once an Advance Ruling (AAR) has been upheld by courts, the classification dispute cannot be reopened by the department through a review petition. The case arose when Isha Exim, an importer of processed areca nuts, obtained an Advance Ruling in March 2017 that...
In a recent decision, the Madras High Court dismissed review petitions filed by the Commissioner of Customs, ruling that once an Advance Ruling (AAR) has been upheld by courts, the classification dispute cannot be reopened by the department through a review petition.
The case arose when Isha Exim, an importer of processed areca nuts, obtained an Advance Ruling in March 2017 that classified its goods under Chapter 21 (CTH 2106) as food preparations, rather than under Chapter 8 (CTH 0802), which deals with raw nuts. The ruling was binding under Section 28J of the Customs Act, 1962. Despite this, the Customs Department continued to raise classification disputes, arguing that the goods were misclassified and should be treated as raw areca nuts.
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The classification dispute was earlier settled by both the Madras and Bombay High Courts, with the Bombay High Court ruling in December 2023 in favour of the assessee. The department’s Special Leave Petition (SLP) against that ruling was dismissed by the Supreme Court in November 2024. Following this, the Madras High Court also upheld the AAR and dismissed the department’s writ appeals in December 2024.
Despite the repeated rulings, the Customs Department filed review petitions before the Madras High Court in early 2025, seeking to reopen the matter. The department’s counsel argued that the goods imported in recent consignments differed from those originally assessed in the Advance Ruling. They claimed this justified a fresh review.
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Senior advocate Vijay Narayanan, the counsel for the petitioner, argued that the matter had already been fully adjudicated and had attained finality. He pointed out that the same department had accepted the classification under Chapter 21 in earlier imports and that both the Madras and Bombay High Courts had ruled in the importer’s favour. He also explained that the Supreme Court had declined to interfere with the High Court decisions, reinforcing that the issue could not now be re-litigated.
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