TaxTMI 
TaxTMI 
2021 (7) TMI 1114
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....boiled Supari)"; the impugned goods have been stored at M/s. V. Unit, a unit of FTZ on behalf of M/s. ST Enterprises & M/s. Ayush; that the impugned goods were classified U/CTH 2106 90 30 with a write up given by their supplier/exporter M/s. Nadaraj International Company Ltd., Yangon, Myanmar explaining various stages of process and last part of the process that was roasting, adding cardamom and any other relevant spices, at that stage any metal, if detected, is removed by magnetic metal detectors and the product was then packed; that the impugned goods have been examined by the officers of the FTZ and as the Betel-nuts (Areca-nuts) are "whole" nuts and classifiable U/CTH 0802 80 10 and a prohibited item for import if the CIF value of the impugned goods is lesser than Rs. 251/- per kg.; that on a reasonable doubt samples were drawn and forwarded to the Chemical Examiner, Customs Laboratory, Custom House, Chennai-600001 with the certain queries. 3. After test, the Chemical Examiner, CRCL had reported that "the sample is in the form of Whole Betel-nut. Whether it is Boiled/Roasted "Betel-nut" could not be ascertained here for want of specification for the same. It is free of ....
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..../CTH 2106 90 30. The Pr. Commissioner of Customs, Chennai-II and Commissioner of Customs (Nhava Sheva-II) agreed with the applicant that the impugned items are classifiable U/CTH 2106 90 30 as "Betel-nut" products as "Supari". • they also placed reliance on the following case law : (i) Columbia Sportswear Co. v. Director of Income Tax, Bangalore [2012 (283) E.L.T. 321 (S.C.)] • And praying to set aside both the speaking orders and allow the appeals. 5. The consultant for both the appellants Mr. Chandrabose (Formerly I.R.S.), has filed additional written submissions on the day of PH (22-12-2020) inter alia stating that the imported goods namely boiled betel nuts (commonly known as API supari in trade parlance). The matured raw betel nuts harvested from the trees were dried in open space and grade wise charting done in grading machine, the prime quality nuts obtained at the time of grading is mostly sold in the market as betel nut whole. The other grade nuts received are commonly used for preparation of suparis by various process. In the preparation of the API supari (boiled betel nuts the various process involved namely removing of large im....
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....sed during boiling of nuts generally the process of addition of food starch not recommended. It is submitted that only for preparation of flavoured supari, spices like cardamom, copra or menthol used. For "API supari" the spices are not added. 5.5 Reference is invited to the supplementary Notes 4 to Chapter 21 of the customs tariff; "In this chapter 'betel nut product known as supari' means any preparations containing betel nuts, but not containing any one or more of the following ingredients, such as cardamom, copra or menthol." From the above, it is evident that to qualify as 'supari', it should be a product of betel nut which does not contain lime, katha (catechu) and tobacco. However, flavouring/conditioning agents like cardamom, copra, menthol and foods starch can be present or absent. Similarly, shape of the product does not alter the classification as the product has undergone process like cleaning for removing the impurities and boiled in water for 6 hours, dried in sunlight in the open yard, polished (optional) and packed. This product is known as "API supari (Boiled betel nut)" in common trade parlance. Further reference is invited to the Chapter note ....
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....ppellants as stated in the earlier paras he filed written submissions in both the appeals. While reiterating the submissions made vide both the appeals, it was stated by him that the goods are imported through sea port but due to the delay it was moved to J. Matadee Free Trade Warehousing Zone, Mannur for warehousing purpose and that's why it comes under the jurisdiction of the Commissioner (Appeals-I). The consultant explained the processes undergone by the betel nut and how it will be converted into an edible product by pressing, boiling with lemon peel and so that it become sponge and edible and because of that's how it also shining and free from fungus. In market the product is known as API supari. He also stated that there are existing advance rulings classifying the goods under CTH 21 and they are applicable to them also. He also relied upon the SIIB clearance in this matter vide F. No. 348/2020-SIIB, dated 19-11-2020, wherein they have clearly noted the advance rulings in this matter. Vide HSN (general notes) CTH 8 also it is clear that betel nut gets covered only if not suitable for immediate consumption in that state. He also referred to FSSAI certificate dated 23-11-2020 ....
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....l Commissioner of Customs or Commissioner of Customs, and the Customs authorities subordinate to him, in respect of the applicant In view of that the advance ruling is not binding in the case of different importer. 7.2 The appellant's averment that the product imported do not contain lime, katha or tobacco and hence merits classification under Chapter Heading 2106 90 30 in view of supplementary Note 2 to Chapter 21 appears to be untenable as the overseas supplier's claim that the roasting and addition of cardamom or any other spices have been answered in negative as per the test report of the Chemical Examiner in response to the specific queries raised in the test memo. 7.3 The observation of the Hon'ble HC of Madras in W.P. No. 765 & 11144/2018 [2018 (13) G.S.T.L. 273 (Mad.)] is in relation to the stand taken by the DRI authorities contradicting the stand of the Commissioner of Customs before the advance ruling authority and after the advance ruling authority has ruled in favour of the applicant in that case. The Hon'ble HC has only stated the applicability and binding nature of the ruling advance ruling authority in paras 9 & 10 of the judgment in the above wri....
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....t the time of filing these appeals and that's why both the appeals fall under the jurisdiction of Commissioner (Appeals-I), Chennai Customs Zone. As both the appeals are on the classification of whole betel nuts they are taken up together for decision. 9. I have carefully gone through the facts, grounds of the appeal, the counter submitted by the department, the additional written submissions filed during the PH and the arguments made during the PH. The issues to be decided are (i) Whether the opinion of the FSSAI notified laboratory can be relied upon for classification of the imported goods? (ii) Whether the test report given by the CRCL (Central Revenues Control Laboratory), Chennai is complete and reliable? (iii) 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 goods? (iv) 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. Ans. M/s. Ay....
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....et a clarification from the Chemical Examiner. Accordingly, a reply was received from the Chemical Examiner vide their letter dated 21-12-2020, which was placed before this forum. The Chemical Examiner further clarified that the goods doesn't fall under CTH 2106 90 30 as it is not a preparation but will fall under CTH 8 in view of the chapter notes. The Chemical Examiner report can be relied upon for the classification of impugned "betel nuts" whole which is free from cardamom & starch and liable to be classified U/CTH 0802. 12. The consultant has stressed upon the point it is preparation of API Supari as the betel nut was boiled in the water for 6 to 8 hrs. with lemon peelings, drying in the sunlight and after that it was packed. The chemical test report doesn't indicate whether it was treated with lemon peelings while it was boiled. Therefore, the claim that the lemon peelings was used for boiling is not correct and it is rejected. 13. I also gone through the exporter's letter/certificate, M/s. Nadaraj International Company Ltd., Yangon issued with respect of the consignments vide Bill of lading - BLPLRGM/2002/348, dated 4-11-2020 in the case of M/s. Ayush Busi....
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....t), Raigad and Pr. Commissioner of Customs, Chennai-II. Therefore, those rulings are not of any help to them to claim the classification of the impugned goods "whole betel nut" under CTH 21. 14.2 Secondly, I also find from the advance rulings cited by them that the item Betel nut was mixed with starch. Para 6 of the cited ruling vide M/s. Excellent International Ltd., AAR/Cus 08, 2015 is reproduced; "From the preparation process of the four products, it is clearly seen that the original betel nut which is a main ingredient in all these four preparations is mixed with food starch after it undergoes the process of boiling. The addition of food starch is common in first two of products namely API Supari and chikni Supari" It would be appropriate to refer to the test report issued by CRCL, Custom House, Chennai dated 8-12-2020 even at the cost of repetition; IMAGE NOT REPRODUCED The above report very clearly says that the imported goods are free of starch. As discussed earlier in paras 13 & 14 of this order, the impugned goods are different from the goods i.e. API Supari & Chikni Supari discussed in the advance ruling order and therefore, they cannot seek the ....
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....Advance Ruling has been pronounced. Hon'ble Madras High Court has reconfirmed that the advance ruling is only binding on the applicant in respect of question raised in the application and on the Commissioner of Customs, in respect of the applicant. Evidently, the appellants cannot rely upon the Hon'ble Madras High Court's order, which is in fact of in favour of the department. Thus Q. No. 4 is answered absolutely negating the appellants' view point. 17. Coming to the Q. No. 5 (ref. Para No. 9 of this order) the reliance upon the D.C., SIIB's letter to the Authorised Officer., it must be stated it doesn't have any bearing upon the impugned goods classification as the D.C. SIIB is not the final authority on the matter of classification. I also find that he has given no objection to move the Container Nos. [TCNU6070660, TGHU6614739, TEMU6308676 & TEMU6783249 from Kattupalli Port to J. Matadee FTWZ, Mannur and therefore, it cannot be the reason for seeking a classification unduly benefitting the appellants' goods. 18. For classification of goods the only and right option available is to refer to the HSN explanatory notes. Reliance is also placed on the following case....
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.... dried (including dehydrated, evaporated or freeze-dried); provided they are unsuitable for immediate consumption in that state, they may be provisionally preserved (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions). The term "chilled'' means that the temperature of a product has been reduced, generally to around 0°C. without the product being frozen. However, some products, such as melons and certain citrus fruit, may be considered to be chilled when their temperature has been reduced to and maintained at + 10°C. The expression "frozen" means that the product has been cooled to below the product's freezing point until it is frozen throughout. Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. It should be noted that homogenisation, by itself, does not qualify a product of this Chapter for classification as a preparation of Chapter 20. The addition of small quantities of sugar does not affect the classification of fruit in this Chapter. The Chapter also includes dried fruit (e.g., dates and prunes), the exterior of which may be cover....
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....ted coffee substitutes containing coffee in any proportion (heading 0901); (c) flavoured tea (heading 0902); (d) spices or other products of headings 0904 to 0910; (e) food preparations, other than the products described in heading 2103 or 2104, containing more than 20% by weight of sausage, meat, meal offal, blood, fish or crustaceans, molluscs or other aquatic invertebrates, or any combination thereof (Chapter 16); (f) yeast put up as a medicament or other products of heading 3003 or 3004; or (g) prepared enzymes of heading 3507. 2. Extracts of the substitutes referred to in Note 1(b) above are to be classified in heading 2101. 3. For the purposes of heading 2104, the expression "homogenised composite food preparations" means preparations consisting of a finely homogenised mixture of two or more basic ingredients such as meat, fish, vegetables, fruit or nuts, put up for retail sale as food suitable for infants or young children or for dietetic purposes, in containers of a net weight content not exceeding 250g. For the application of this definition, no account is to be taken of ....
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....asted. And therefore, the "betel nut whole" cannot be classified under CTH 2106 90 30. In view of the above detailed discussions, it is held that both the appeals don't have any merits and are liable to be rejected. Thus Q. No. 6 (ref. para No. 9) of this order is answered. 22. Consequently, Q. No. 3 (ref. para No. 9) is answered in affirmative and I uphold the speaking Order No. 2/2020, dated 9-12-2020 in the case of M/s. S.T. Enterprises, Overseas, No. 308, Kriti Deep Building, DDA Real Business Center, Nangal Raya, New Delhi-110046 (B/E. No. 1017900, dated 18-11-2020) and speaking Order No. 3/2020, dated 9-12-2020 in the case of M/s. Ayush Business Overseas, 3rd Floor, House No. 1/20, Sindhora Kalan City, New Delhi-110052 (B/E No. 1017898, dated 18-11-2020) passed by the respondent i.e. Authorised Officer, J. Matadee Free Trade Warehousing Zone (FTZ), Mannur Village, Sriperumpudur, Kanchipuram Dist.-600210 classifying the impugned goods "betel nuts - whole" under CTH 0802 80 10. 23. Both the appeals vide F. No. C3/I/230/O/2020-Air of M/s. S.T. Enterprises, New Delhi and F. No. C3/I/231/O/2020-Air of M/s. Aayush Business Overseas, New Delhi are rejected. 24.&em....
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....ai - 600040 Ph +91-44-4551 3309 +91-44-2616 2309 Fax +91-44-2616 2309 Email: info@slab com | www.shislab.com Sl. No.SFTS/NTR/ 1911773 23 Document 2 SFTS Scientific Food Testing Services (P) Ltd. NABL Accredited & FSSAI Notified Laboratory (FSSAI Reg. No.42/S/FSSA1/2016) TEST REPORT ULR No: TC5936 200 0000 3 3 3 5 P Date: 23.11.2020 CTC- Page 2 of 3 TEST RESULTS SI. Test Parameter Test Method Results No. Requirements as per 2.3.55 FSS Regulations 2011 1 Physica! Appearance Visual Examination Brown Colour Whole Nuts 2 Physical Examination for insect infestation, visible moulds, Visual Examination Absent Absent Fissures, Shrinkage & Hollow" Off flavour, odour or other 3 4 undesirable characteristics Damaged Nuts 5 insects* 6 Moisture" 7 Sulphites as SOâ‚‚" 8 9 SFTS/INS/SOP/010 10 Sorbates as Sorbic acid" SFTS/INS/SOP/008 Damaged by moulds and Synthetic colouring matter* Total Aflatoxin Organoleptic analysis IS 4333 (Part-1): 1996 IS 4333 (Part-1): 1996 IS 4684-1975 (Reaff.2010) FSSAI Lab Manual Food Additives 2016, ....
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.... TEST RESULTS Test Method Results SI Test Parameter No. 30 Thiometan" 31 Trichlorton" 32 Copper as Cu 33 Cadmium as Cd' 34 Mercury as Hg 35 Lead as Pb* 36 Zinc as Zn 37 38 39 40 41 Enterobacteriaceae* 42 Staphylococcus aureus 43 Vibrio cholerae 44 Escherichia coli Arsenic as As Tin as Sn Methyl Mercury Calculated as Element Total Plate Count SFTS/INS/SOP/018 SFTS/INS/SOP/018 SFTS/INS/SOP/024 SFTS/INS/SOP/024 SFTS/INS/SOP/024 SFTS/INS/SOP/024 SFTS/INS/SOP/024 SFTS/NS/SOP/024 SFTSANS/SOP/024 SFTS/INS/SOP/024 USFDA-BAM Chapter-3 2001 APHA Compendium, 5th Edition Chapter 9, 2015 IS 5887 (Part-8)/Sec 1-2002 (Reaff.2012) IS 5887 (Part-5): 1976 (Reaff.2013) IS 5887 (Part-1):1976 (Reaff.2013) BLQ (LOQ: 0.01 mg/kg) BLQ (LOQ: 0.01 mg/kg) 22.4 mg/kg BLC (LOQ. 0.5 mg/kg) BLQ (LOQ: 0.15 mg/kg) BLQ (LOQ: 1.0 mg/kg) 10.6 mg/kg BLQ (LOQ: 0.5 mg/kg) BLQ (LOQ: 5.0 mg/kg) BLQ (LOQ: 0.15 mg/kg) 9800 cfu/g Document 4 GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE OFFICE ....