2021 (7) TMI 1114 - Commissioner - Customs

Appeals Denied for Incorrect Classification of Betel Nuts under CTH 0802 80 10

IN RE : S.T. ENTERPRISES

IN RE : S.T. ENTERPRISES - 2021 (377) E.L.T. 127 (Commr. Appl.) Issues Involved:1. Whether the opinion of the FSSAI notified laboratory can be relied upon for classification of the imported goodsRs.2. Whether the test report given by the CRCL (Central Revenues Control Laboratory), Chennai is complete and reliableRs.3. Whether the impugned speaking Orders No. 2 & 3/2020-21, dated 9-12-2020 issued by the Authorised Officer, J. Matadee FTWZ, Kancheepuram, TN are legally correct or not in the case of the imported goodsRs.4. Whether the citation of the advance rulings in the case of M/s. Excellent Betelnut Products Pvt. Ltd., Nagpur is applicable to both the appellants i.e. M/s. S.T. Enterprises, New Delhi. and M/s. Ayush Business Overseas, New DelhiRs.5. Whether the SIIB letter in F. No. 348/2020-SIIB, dated 19-4-2020 cited by the consultant has any bearing on the issue at handRs.6. Whether both the appeals have any meritRs.Detailed Analysis:Issue 1: Reliance on FSSAI Notified Laboratory for ClassificationThe FSSAI notified laboratory report stated that the physical appearance of the betel nuts was 'Brown Colour Whole Nuts' and confirmed to BETEL NUTS (BOILED SUPARI). However, the FSSAI lab report is only for determining the fitness for human consumption and cannot be considered for the classification of goods under the Customs Tariff Act. Therefore, the reliance by the appellants on this report for classification purposes is incorrect and misconceived.Issue 2: Reliability of CRCL Test ReportThe Authorised Officer sent samples to the Chemical Examiner at the Custom House, Chennai, with specific queries about the classification of the goods. The test report confirmed that the samples did not contain cardamom or food starch and were in the form of whole betel nuts. The Chemical Examiner further clarified that the goods do not fall under CTH 2106 90 30 as they are not a preparation but fall under CTH 8. Thus, the CRCL test report is complete and reliable for classifying the goods as whole betel nuts under CTH 0802.Issue 3: Legality of the Speaking OrdersThe speaking orders issued by the Authorised Officer classified the goods as whole betel nuts under CTH 0802 80 10. The appellants argued that the goods should be classified under CTH 2106 90 30 based on the processes they underwent. However, the Chemical Examiner's report and the lack of evidence supporting the appellants' claims led to the conclusion that the goods are correctly classified under CTH 0802 80 10. The speaking orders are legally correct.Issue 4: Applicability of Advance RulingsThe appellants relied on advance rulings in the cases of M/s. Excellent Betelnut Products Pvt. Ltd. and M/s. Isha Exim. However, as per Sec. 28J of the Customs Act, 1962, advance rulings are binding only on the applicant who sought them and the authorities in respect of that applicant. Therefore, these rulings are not applicable to the appellants in this case.Issue 5: Relevance of SIIB LetterThe consultant cited a letter from the D.C., SIIB, which recommended the movement of containers for further procedures. However, the D.C., SIIB is not the final authority on classification matters. The letter does not have any bearing on the classification of the goods.Issue 6: Merit of the AppealsThe appellants' arguments were based on incorrect reliance on FSSAI reports, misinterpretation of advance rulings, and unsupported claims about the processing of the betel nuts. The classification of the goods as whole betel nuts under CTH 0802 80 10 is supported by the Chemical Examiner's report and HSN explanatory notes. Therefore, both appeals lack merit and are rejected.Conclusion:The appeals filed by M/s. S.T. Enterprises and M/s. Ayush Business Overseas are rejected. The goods are correctly classified under CTH 0802 80 10 as whole betel nuts. The speaking orders issued by the Authorised Officer are upheld.