TaxTMI 
TaxTMI 
2021 (5) TMI 1036
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.... received in the Secretariat of CAAR, Mumbai. However, on a constructive interpretation of law and also as a trade facilitation measure, the applicants, Ms. BMG Corporation and M/s. Bhagwan Corporation were requested to revalidate their applications if they continue to be desirous of obtaining advance rulings sought earlier. The applicants have submitted their applications in the prescribed form, CAAR-1 on 17-3-2021. 2. Both the applications seek rulings on the identical subject matter, i.e., classification of API/boiled supari, chikni supari, unflavoured supari and flavoured supari. According to both the applicants, all the above-mentioned products merit classification under sub-heading 2106 90 30 of the First Schedule to the Customs Tariff Act, 1975. Both the applicants base their contention on the supplementary Note 2 to the Chapter 21 of the First Schedule to the Customs Tariff. Considering that these applications seek rulings on a common subject, they are being taken up together for a common ruling. The applicants have also referred to the decision of the erstwhile AAR in the case of M/s. Excellent Betelnut Products rendered vide ruling number AAR/Cus/08/2015 [2015 (32....
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.... such these rulings are sub silentio and therefore, not binding precedents. After the two advance rulings applications were transferred to the CAAR, Mumbai; the Principal Commissioner, Nhava Sheva-I has once again been requested to offer his comments or reaffirm his earlier comments. However, no further communications has been received. The aforementioned comments have also been shared with M/s. BMG Corporation. 4. Both the applications were listed for personal hearing on 10-5-2021 in virtual mode at different times. Sri Shivam Mishra, Advocate, representing the firm M/s. Amar Legal appeared for both the applicants. The Learned Counsel argued that since the products intended to be imported by them are roasted and boiled for 6 to 12 hours, it would incorrect to hold them classifiable under Chapter 8 as dried nuts. He also emphasised the Supplementary Note 2 to Chapter 21 of the tariff which states that, 'In this Chapter "betel nut product known as supari" means any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copr....
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....ion before me. In the Ruling No. CAAR/Mum/ARC/3/2021, dated 15-3-2021 [2021 (378) E.L.T. 680 (A.A.R. - Cus. - Mum.)], I had the occasion to examine in detail the contentions of the applicant, the contending tariff entries, the relevant chapter and section notes, as well as the explanatory notes to the Harmonised Commodity Classification System of the World Customs Organisation. The relevant portions of my findings in that case are reproduced below :- "9. In the aforementioned backdrop, it is necessary to examine the contending chapters of the tariff. The relevant notes to Chapter 8 lay down the following :- '3. Dried fruits or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes : (a) For additional preservation or stabilization (for example, by moderate heat treatment, sulphuring, the addition of sorbic acid or potassium sorbate); (b) To improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts.' In....
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....rocesses, the resultant products still substantially retain the original character of the raw material, i.e., areca or betel nuts. Examination of the processes undertaken on the raw betel nuts, as submitted by the applicant, reveal that some of the processes are nothing but mere cleaning or removal of impurities, e.g., removal of small/large impurities, blowing of weightless particles, gravity/magnetic separation, etc. It is nobody's case that undertaking of such activities would result in a substantially different commodity than the starting raw material, so as to be called as a preparation. The same would be the conclusion with respect to garbling, which refers to the separation of the unwanted portions from the desired end products or sterilization to remove/kill bacteria. Some of the products, namely, chikni/unflavoured/flavoured supari are subject to cutting or slicing. The relevant portion of the HSN as reproduced above makes it clear that even after cutting/slicing, the resultant products remain classified under Chapter 8. Similarly, processes like drying, sorting, polishing, packaging etc. do not alter the nature of the product in any significant manner to necessitate a cha....
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.... that in the end product the 'betel nut remains a betel nut'. The said observation of the Tribunal depicts the status of the product prior to manufacture and thereafter. In those circumstances, the views expressed in the D.C.M. General Mills Ltd. (supra) and the passage from the American Judgment (supra) become meaningful. The observation that manufacture implies a change, but every change of not manufacture and yet every change of an article is the result of treatment, labour and manipulation is apposite to the situation at hand. The process involved in the manufacture of sweetened betel nut pieces does not result in the manufacture of a new product as the end product continues to retain its original character though in a modified form." (emphasis supplied) 14. In the case of Azam Laminators Pvt. Ltd., reported at 2019 (367) E.L.T. A22 (Tri. - Chennai), where scented betel nut was being manufactured by cracking of dried betel nut into small pieces, and thereafter, gently heating it with addition of vanaspati oil, sweetening and flavouring agents and marketed in small pouches as Nizam Pakku (in Tamil)/Betel Nut (in English), the Chennai Bench of the Hon'ble CESTAT hel....
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..... No. 103 of the Notification No. 50/2017-Cus., dated 30-6-2017 would not be available to the products, namely, API supari, chikni supari, unflavoured supari, flavoured supari, and boiled supari." 8. My conclusions in the said proceedings remain equally valid in the present proceedings considering the fact that the products in question are identical. The arguments of the Learned Counsel for the applicants that the products intended for import by them undergo roasting and boiling and therefore do not merit classification under Chapter 8 of the Customs Tariff need to be rejected when the notes to Chapter 8 are read together with the relevant HSN Explanatory Notes. In view of the relevant Chapter Notes and HSN Explanatory Notes, the processes of roasting and boiling alone are not sufficient to take the products under consideration here out of the purview of Chapter 8. So far as the argument that Supplementary Note 2 to Chapter 21 shouldn't be made redundant is concerned, it is very clear that so far as chikni supari and unflavoured supari are concerned, there is no doubt regarding inapplicability of the said note to these products as has been discussed in detail in my earlier ....