AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 673
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....the application was accordingly registered under Serial No. 05/2022, dated 8-2-2022. 2. The applicant, vide the aforesaid application, has sought ruling by CAAR, New Delhi on the question of classification of "preparation of Scented & Flavoured and/or Sweetened Betel Nut imported from Vietnam, Thailand or any other country having the description as given in the body of application". Whereas, on scrutiny of the application it was found that the applicant has not sought ruling on the determination of origin of goods in terms of regulations notified under the Customs Tariff Act, 1975 and matters relating thereto. Therefore, the scope of this application is limited to the classification of goods described by the applicant as "preparation of Scented & Flavoured and/or Sweetened Betel Nut". 3. The applicant in his application, has discussed the process of preparation and value addition of areca nut to obtain the goods proposed to be imported as under :- 3.1 There are many varieties of scented suparis. Dried areca nuts are broken into bits, blended with flavour mixture and packed. The favouring of supari varies with region and is a closely guarded secret. In South ....
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....ion of meats, fish, Chapter 17 covers sugar or sugar confectionary, Chapter 18 covers cocoa products and 19 covers preparations of cereals, flour starch or milk. According to the applicant, the products under reference are, therefore, not classifiable under any of the chapters from 1 to 19 of the HSN and corresponding headings in the Customs Tariff Schedule. Chapter 20 covers preparation of vegetables, fruits, nuts or other parts of plants and Chapter 21 covers miscellaneous edible preparations. 4.3 Also, Heading 20.01 of the Customs Tariff covers vegetable, fruit, nut etc. which are prepared or preserved by vinegar or acetic acid, Heading 20.02 covers tomatoes, 20.03 covers mushrooms and truffles, 20.04 & 20.05 covers other vegetables and Heading 20.06 covers vegetables, fruits, nuts, fruit peels and other parts of plants preserved by sugar. Heading 20.07 covers products like jam/jelly/marmalade etc. and 20.08 covers inter alia nuts which are otherwise prepared or preserved. 4.4 However, Chapter 21 covers miscellaneous edible preparations. Supplementary Notes in this Chapter are in addition to what the HSN has. As these supplementary notes are specific to the Custo....
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....any form; hence the items API Supari, Chikni Supari and Unflavoured supari shall be covered under CTH 0802. 5.2 Further, the 'preparations based upon betel nut' are the goods obtained after adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients other than lime, katha or tobacco to betel nut, in any form, and such products shall only be covered under CTH 2106. The item 'flavoured supari' which contains flavoring material like spices or mulethi would alone be appropriately classified under CTH 2106. 5.3 The GST Council in its 45th meeting held on 17-9-2021 at Lucknow made some clarifications regarding GST rates and classification of goods. Based on the recommendations of the GST Council and the said meeting it was held that 'scented sweet supari' falls under Tariff Item 2106 90 30 as 'Betel nut product" known as "supari" and attracts GST rates of 18% vide entry at Sr. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. 6. Following the due procedure, a personal hearing in this matter was fixed on 11-5-2022. The authorized representative for the applicant, Shri B.K. Singh, attended the per....
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....sified under Heading 08 of the Central Excise tariff, which was identical to Customs Tariff, as the processes used by them did not amount to "PREPARATION", which was required to be proven for classification of such products under Heading 2106. Needless to say that the rate of duty was much higher under Heading 2106 for the reason that while Heading 08 of the CE Tariff included only agricultural products, Heading 2106 covered preparation of certain agricultural products. Para 30 of the said order of the Hon'ble Supreme Court is reproduced below" "30. In our view, the process of manufacture employed by the appellant-company did not change the nature of the end product, which in the words of the Tribunal, was 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 treatme....
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....ntention of the Parliament in enacting these provisions and once the legislative intention is properly gathered, then the bounden duty and obligation of the courts is to decide the cases in consonance with the legislative intention of the Parliament." 7.5 In the instant case, the intention of the Parliament is obvious when they inserted Supplementary Note 2 in the Customs Tariff in the year 2008. The Authority has to ascertain whether the product intended to be imported is covered by the said Supplementary Note of Chapter 21. 7.6 The first requirement is that the imported product should be known as Supari in the Indian market. This was made clear by the Authority for Advance Ruling in the case of Excellent Betel Nut and subsequent rulings in Oliya Steel and Isha Exim. The second requirement is that it should be a preparation of betel nut. What would be called a preparation is also mentioned in the Supplementary Note 2 of Chapter 21. The Note explains that the preparation may or may not include certain condiments, such as cardamom, copra or menthol. 7.7 The applicant in this case has explained in great detail as to what will be added to the betel nut after cu....
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.... nuts.' In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are accommodated under 0802 80 10, 20, 30, 90, and 0802 90 00, respectively. 8.2 On the other hand, Chapter 21 covers miscellaneous edible preparations. The relevant Supplementary Note 2 to the said Chapter lays down 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, copra, menthol.' In this Chapter, the related entry, with respect to betel nuts, is the sub-heading 2106 90 30, i.e., betel nut products known as supari. 9. Further, since the question relates to classification of goods proposed to be imported, guidance of the Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would be useful. It is seen that with respect to Chapter 8, the HSN prescribes the following as general guidelines :- 'Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, ston....
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....ted & Flavoured and/or Sweetened Betel Nut" covered by the present application, are classifiable under Chapter 8, more specifically sub-heading 0802 80. 12. In the present application, an effort has been made to distinguish the other betel nut items, such as 'API Supari, Boiled Supari, Chikni Supari, and Unflavoured Supari' from 'Scented & Flavoured and/or Sweetened Betel Nut'. The Learned Advocate has specifically referred to the views of the concerned Principal Commissioner of Customs, ICD, Tughlakabad advising that the scented sweet supari would fall under Chapter 21, Heading 2106. Both the applicant and the concerned Principal Commissioner of Customs have referred to the clarification pursuant to 45th meeting of the GST Council held on 17-9-2021, wherein it was held that 'Scented Sweet Supari' would fall under GST Tariff Item 2106 90 30. The concerned Principal Commissioner of Customs has specifically opined that "since, the betel nut which has undergone the processes where it does not lose its original character of supari, it does not amount to manufacture or a new product and there is no process of adding or mixing cardamom, copra, menthol, spices, sweetening agents o....