TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Processed betel nut products classified under Chapter 8, not 2106, based on essential character.</h1> <h3>IN RE : DRY NUT ENTERPRISES</h3> IN RE : DRY NUT ENTERPRISES - 2022 (379) E.L.T. 139 (A. A. R. - Cus. - Del.) Issues Involved:1. Classification of processed betel nut products (API supari, Chikni supari, Unflavoured supari, Flavoured supari).2. Determination of whether the processes applied to betel nuts change their classification under the Customs Tariff Act.Issue-wise Detailed Analysis:1. Classification of Processed Betel Nut Products:The applicant, a partnership firm, sought an advance ruling on the classification of four types of processed betel nut products: API supari, Chikni supari, Unflavoured supari, and Flavoured supari. The question posed was whether these products, which do not contain lime, katha, or tobacco but may contain other ingredients like cardamom, copra, or menthol, fall under CTH 2106 90 30.The applicant argued that these products should be classified under Chapter 21, citing previous rulings by the AAR for similar products and a High Court judgment. The Principal Commissioner of Customs, however, suggested that API supari, Chikni supari, and Unflavoured supari fall under CTH 0802, while Flavoured supari falls under CTH 2106.2. Determination of Processes and Classification:The processes involved for each product were detailed:- API supari: Removal of impurities, boiling, mixing with food starch, drying, polishing, and packaging.- Chikni supari: Same as API supari, with additional slicing.- Unflavoured supari: Removal of impurities, metal detection, polishing, cutting, blowing, gravity separation, roasting, and packaging.- Flavoured supari: Same as Unflavoured supari, with sterilizing and flavouring.The Authority examined whether these processes and the addition of ingredients were substantial enough to classify the products as 'preparations of betel nut' under Chapter 21. The Authority referred to Chapter 8, which covers edible fruits and nuts, including betel nuts, and Chapter 21, which includes miscellaneous edible preparations.Legal References and Judgments:The Authority considered previous AAR rulings and judgments, including:- M/s. Excellent Betelnut Products Pvt. Ltd. and M/s. Oliya Steel Pvt. Ltd., which classified similar products under CTH 2106 90 30.- M/s. Crane Betel Nut Powder Works (Supreme Court), which held that processing betel nuts without changing their essential character does not constitute manufacturing a new product.- Azam Laminators Pvt. Ltd. (CESTAT, Chennai), which classified scented betel nuts under CTH 0802 90 19, not CTH 2106 90 30.Conclusion:The Authority concluded that the processes applied to API supari, Chikni supari, and Unflavoured supari were primarily for cleaning, preservation, and appearance enhancement, which are covered by Chapter Note 3 to Chapter 8. These processes did not change the essential character of the betel nuts. Therefore, these products should be classified under Chapter 8, specifically under Heading 0802.For Flavoured supari, the addition of flavouring agents did not change the essential character of the betel nuts, as supported by the Supreme Court and CESTAT judgments. Thus, Flavoured supari also falls under Chapter 8, Heading 0802.Ruling:All four products—API supari, Chikni supari, Unflavoured supari, and Flavoured supari—are classified under Chapter 8, Heading 0802, and not under sub-heading 2106 90 30.
TaxTMI 