Flavoured supari classification affirmed as food preparation CTI 21069030, entitling imports to exemption under Notification No. 68/2012.

Classification of imported flavoured supari is governed by tariff interpretation using GIR and essential character analysis and reliance on HSN Explanatory Notes; accordingly the product is classifiable under CTI 21069030 and qualifies for the customs duty concession under Serial No. 39 of Notification No. 68/2012. The CBIC circular clarifying classification of scented/flavoured supari and flavoured coated ellaichi is held applicable to the imports and informs the tax treatment. Prior advance rulings do not preclude a different classification where later binding judicial pronouncements and applicable circulars support reclassification, and the applicant is entitled to the stated exemption on that basis.

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Issues: (i) Whether the product "Flavoured Supari" is classifiable under Heading 2106, Sub-heading 210690 and Tariff Item No. 21069030 of the First Schedule to the Customs Tariff Act, 1975; (ii) If so, whether the goods are eligible for concession of basic customs duty under Sr. No. 39 of Table 1 of Notification No. 68/2012-Customs dated 31.12.2012.

Issue (i): Whether "Flavoured Supari" merits classification under Tariff Item 21069030 (betel nut product known as "Supari").

Analysis: Application of the General Rules for Interpretation (GIR) of the First Schedule, read with relevant Chapter and Supplementary Notes, is determinative. Supplementary Note 2 to Chapter 21 expressly defines "betel nut product known as Supari" as any preparation containing betel nuts not containing lime, katha (catechu) or tobacco and may contain ingredients such as menthol. Where goods are prima facie classifiable under more than one heading, GIR 3(a) requires preference to the most specific description. The CBIC Circular No.163/19/2021-GST and the explanations to the IGST/CGST rate notifications are applicable for import classification by virtue of Section 3(7) of the Customs Tariff Act, 1975. Binding judicial authority of the jurisdictional High Court (Madras) has upheld classification of menthol/scented supari under 21069030. Prior AAR rulings and CAAR decisions were considered; a judicial stay in another specific matter does not preclude deciding this applicant's question on its merits. The factual processes described (cutting, flavoring, blending without lime/katha/tobacco) fall within the notion of a preparation as captured by Supplementary Note 2 and distinguish the product from a mere areca nut under Chapter 8.

Conclusion: The product "Flavoured Supari" is classifiable under Tariff Item 21069030 (Chapter 21).

Issue (ii): Whether goods classifiable under 21069030 are eligible for concession under Sr. No. 39 of Table 1 of Notification No. 68/2012-Customs dated 31.12.2012.

Analysis: Sr. No. 39 of Table 1 to Notification No. 68/2012-Customs extends concession of basic customs duty to goods classified under Chapter 21, except specified alcoholic compounds under 2106 90. Given the affirmative classification under 21069030 and absence of the excluded alcoholic compound description, the product falls within the scope of the exemption entry.

Conclusion: The goods classifiable under 21069030 are eligible for the concession of basic customs duty under Sr. No. 39 of Table 1 of Notification No. 68/2012-Customs dated 31.12.2012.

Final Conclusion: The advance ruling application is allowed: "Flavoured Supari" is held classifiable under Heading 2106, Sub-heading 210690, Tariff Item 21069030 and is eligible for concession under Sr. No. 39 of Table 1 of Notification No. 68/2012-Customs dated 31.12.2012.

Ratio Decidendi: Where a specific tariff entry and accompanying supplementary note (Supplementary Note 2 to Chapter 21) expressly covers a product description, that specific entry prevails over a more general heading; applied to the facts, the Supplementary Note 2 description of "Supari" controls classification and, read with CBIC Circular No.163/19/2021-GST and Section 3(7) of the Customs Tariff Act, results in classification under Tariff Item 21069030 and entitlement to the exemption at Sr. No. 39 of Notification No. 68/2012-Customs.

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