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of <h1>AAR allows application despite time-bar, classifies imported betel nut products under specific heading</h1> <h3>IN RE : GLOBE IMPEX</h3> IN RE : GLOBE IMPEX - 2021 (378) E.L.T. 383 (A. A. R. - Cus. - Del.) Issues Involved:1. Time Barred Application2. Classification of Processed Betel Nut Products3. Interpretation of Supplementary Note 2 of Chapter 214. Consideration of Previous Rulings and Legal PrecedentsDetailed Analysis:1. Time Barred ApplicationThe application by M/s. Globe Impex was initially deemed time-barred as it was received on 10-12-2019, and the three-month limit for pronouncing advance rulings had lapsed. However, the Authority for Advance Rulings (AAR) provided an opportunity for the applicant to confirm their interest in obtaining a ruling or resubmit their application under the new Customs Authority for Advance Rulings (CAAR) Regulations, 2021. The applicant affirmed the validity of their earlier declarations, allowing the process to continue.2. Classification of Processed Betel Nut ProductsThe primary issue was whether the processed betel nut products (API Supari, Chikni Supari, Unflavoured Supari, and Flavoured Supari) imported by the applicant should be classified under Customs Tariff Heading 2106 90 30 as 'preparations of betel nut' or under Heading 0802 80 as 'areca nut (betel nut).'- API Supari and Chikni Supari: The processes involved boiling raw betel nuts, adding food starch, and drying and polishing. These processes were deemed to fall under the preservation and stabilization methods listed in Chapter Note 3 to Chapter 8, indicating they retain the character of betel nuts.- Unflavoured Supari: Similar processes were involved, including sterilization and cutting, which also fell under the preservation and stabilization methods of Chapter Note 3 to Chapter 8.- Flavoured Supari: Involved additional processes like flavouring with spices, menthol, and other compounds. Despite these additions, the product was still considered to retain the character of betel nuts based on legal precedents.3. Interpretation of Supplementary Note 2 of Chapter 21The applicant argued that their products should be classified under Chapter 21 based on Supplementary Note 2, which defines 'betel nut product known as Supari' as any preparation containing betel nuts but not lime, katha, or tobacco. The Authority found that the processes applied did not significantly alter the character of the betel nuts to classify them as preparations under Chapter 21.4. Consideration of Previous Rulings and Legal PrecedentsThe applicant cited previous rulings from the AAR and legal precedents to support their classification under Chapter 21. However, the Authority noted that these previous rulings did not consider Chapter Note 3 to Chapter 8 and were thus not binding precedents. The Authority relied on the Supreme Court's judgment in the case of 'M/s. Crane Betel Nut Powder Works,' which held that processes like cutting and adding flavours do not result in a new product distinct from betel nuts.Conclusion:The Authority concluded that all four products (API Supari, Chikni Supari, Unflavoured Supari, and Flavoured Supari) should be classified under Chapter 8, Heading 0802, as they did not attain the character of 'preparations of betel nut' despite the processes and additions. The ruling emphasized that the processes involved were for preservation and stabilization, which did not change the essential character of the betel nuts.
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