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CBIC issues Instruction in view of dismissal of review petition by SC
This Tax Alert summarizes a recent instruction[1] issued by Central Board of Indirect Taxes and Customs (CBIC), clarifying the implications of dismissal of review petition by Supreme Court (SC) in Westinghouse Saxby Farmer Limited.
Earlier, CBIC had issued an instruction[2] regarding the applicability of the said ruling for classification of automobile parts. It was advised that classification of various parts of Section XVII of Customs Tariff is to be decided by considering the facts and details of individual cases and all other available material on the subject matter.
Further, the said instruction highlighted that Revenue had filed a review petition against the Westinghouse judgment. In this regard, reference is invited to our tax alert dated 7 January 2022 titled “CBIC issues Instruction on classification of automobile parts under Customs”.
SC has dismissed the review petition[3] filed by the Revenue and accordingly, concerns have been raised regarding the validity of the previous instruction issued by CBIC.
CBIC has now clarified that earlier instruction brought out distinctive reasons as to why the SC ruling would apply to the goods in the relevant facts and circumstances and not in all situations. Since there is no change in law, the earlier instruction remains valid.
Comments
The present instruction intends to continue the relief already provided to the industry. However, one may expect a suitable amendment in law to address the issue.