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2023 (10) TMI 436
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....pari - Betel Nut product known as supari (cutting menthol supari)" under CTH 21069030 at USD 1.5 per kg (Rs.117.75/- per kg. approx.), whereas DGFT vide Notification No.20/2015-20 dated 25.07.2018, as amended, has fixed a Minimum Import Price of Rs.251/- per kg. for Areca Nuts. The said consignment was investigated on the ground that the importer had obtained an advance ruling from the Customs Authority for Advance Ruling, New Delhi (CAAR) regarding classification of betel nut items, whereas self-declaration in the said Bill of Entry was different from the ruling pronounced in CAAR. It was found that the appellant had claimed benefit under the Notification No.96/2008 dated 13.08.2008 providing for 100% exemption from BCD in respect of goods falling under Heading 2106, whereas the exemption benefit under the said notification in respect of the goods falling under CTH 080280 was only 60% of BCD. As M/s. Globe Impex had obtained an Advance Ruling under Section 28 H of the Customs Act, 1962 (hereinafter referred to as the "Act"), the correct classification of the goods was held to be under CTH 080280. ....
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....e present appeal has been filed by the appellant before this Tribunal. 6. We have heard the learned Counsel for the appellant and also the Authorised Representative for the Revenue and have perused the records. 7. The case of the appellant is that the goods in question are 'Scented Sweet Supari'. He relied upon the test report dated 10.10.2022 from AGSS Analytical and Research Lab Private Limited, Delhi, which shows presence of menthol and saccharine and also absence of Insect Infested Units and Mould Infestation. He also relied upon the CRCL report on the presence of sweetening agent and that the sample is a preparation of betel nut. He seriously refuted the applicability of the Advance Ruling sought by M/s Globe Impex on the ground that the same was a different entity, i.e. the proprietorship firm and it was not in respect of the product in question. The Counsel also referred to Section 28 J to say that the Advance Ruling is not applicable as there is change in law, referring to the Circular issued after the Advance Ruling that the product in question falls under Chapter 21 and also the DRI alert circular. The learned Counsel ....
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.... of Chapter 8 which provides that even if nuts are partially rehydrated or treated for preservation or stabilization and if vegetable oil or glucose syrup is added to improve or maintain its appearance and yet the goods retain the character of dried fruits and nuts, the same would be classifiable under this Chapter. In support of their contention that areca nuts in question do not fall in Chapter 21 as claimed by the appellant, they relied on Supplementary Notes to Chapter 21, which suggests that betel nut preparation resulting in new or distinct product are covered under this chapter and the addition of ingredients like cardamom, copra or menthol does not affect its classification. In so far as the test reports were concerned, the majority of them indicate absence of saccharine and do not meet the standards for betel nuts as per FSSR 2011 and, therefore, the goods are liable for absolute confiscation. The Revenue also relied on the decision of the Apex Court in Crane Betel Nut Powder Works Vs. Commissioner Customs, Tirupati - 2007 (210) ELT 171 (SC), followed by the Tribunal in M/s Azam Laminators Pvt. Vs. Commissioner - 2019 (367) ELT A-22 (Tribunal-Madras....
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....; Food preparation not elsewhere specified or included. 2106 90 30 Betel Nut product known as Supari. Supplementary Notes: 1. In this Chapter "Pan Masala" means any preparation containing betel nuts and anyone or more of the following ingredients, namely: lime, katha (catechue) and tobacco whether or not containing any other ingredient, such as cardamom, copra or menthol. 2. In this Chapter "Betel Nut product known as Supari" means any preparation containing Betal Nuts, but not containing any one or ore of the following ingredients, namely; lime, katha an tobacco whether or not containing any other ingredients, such as cardamom, copra or methanol." 11. From Note 3 of Chapter 8, it is clear that if the areca nuts are even partially rehydrated or treated for preservation or stabilization and even if vegetable oil or glucose syrup is added to improve or maintain its appearance the goods retain the character of dried fruits and nuts and hence, the same are classified under this chapter. Also the cutting / crushing / splitting of areca nuts do not change the basic character of betel nuts a....
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.... of The Tribunal, was that in the end product "the betel nut remains the betel nut". Though the said judgement of the Apex Court was rendered in the context of manufacture under the central excise, however, the principle laid down therein is still relevant for the present controversy and the same have been followed by the Tribunal in various decisions. The Tribunal in the case of Azam Laminates Pvt Ltd Vs Commissioner (supra) dealt with the issue whether scented betel nut manufactured by cracking of dried betel nut into small pieces and, thereafter, gently heating with adding vanaspati oil and flavouring agents and marketing in small pouches is classified under 8029019 of CET and not under Tariff Item 21069030 as Supari following the decision of the Apex Court in Crane Betel Nut Powder Works (supra). 15. Subsequently, the Chennai Bench in S.T. Enterprises Vs Commissioner of Customs, Chennai 2021 (378) ELT 514, following the decision of the Apex Court in the case of Crane Betel Nut Powder Works (supra), Satnam Overseas Vs Commissioner 2015 (318) ELT 538 (S.C.) and Servo-Med Industries Pvt Ltd Vs Commissioner 2015 (319) ELT 578 (S.C.....
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....the Apex Court would not have any bearing as on date on the issue of classification. The Tribunal took the view that even after such amendment the position of law settled by the Apex Court in Crane Betel Nut (supra) would still be applicable, inter-alia observing : ".....The amendment relied upon by the appellants only clarified what 'supari' would be and as such would not be of much help in deciding the classification of impugned goods. Moreover , it can be seen that the impugned products in the case of Crane Betel Nut Powder Works (supra) have undergone much more elaborate processes like cutting into different sizes; adding essential /nonessential oils, menthol, sweetening agents etc. Even when the physical appearance undergoes a change, Apex Court held that the processes undertaken do not amount to manufacture....." 17. The decision of the Tribunal in S.T Enterprises (supra) has been affirmed by the Apex Court by dismissing the appeal filed by the party, in Ayush Business Overseas Vs. Commissioner - 2021 (378) ELT A142. 18. We may now deal with the submissions made by the importer relying on the CBIC Circular No. 163/19/2021 d....
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....We do not agree with the submissions made by the learned Counsel for the appellant and we are fully supported by the decision of the Apex Court in ITC Ltd - 2019 (368) ELT 216 (SC), where it accepted the principle laid down in their earlier decision in Priya Blue Industries Ltd Vs. Commissioner of Customs (Prev), that the order of assessment can be reviewed under Section 28 and/ or modified in an appeal. Here the department has exercised this option by issuing show cause notice under Section 28 of the Customs Act. The relevant provisions of section 28 (4) of the Customs Act as well as the relevant paragraph of the judgement in I.T.C. Limited (supra) are quoted below: "Section 28 (4) -- Where any duty has not been levied or has been short-levied or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful mis-statement; or (c) suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relev....
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....hip company i.e., M/s. Globe Impex, however, the fact is that both the companies not only have the same 'name', M/s Globe Impex, where Shri Gagan Uppal is one of the partners and is responsible for the day-to-day working of the company and is, therefore, fully aware of the classification of the goods in terms of the Advance Ruling sought by him as the Proprietor of the company. The contention of the appellant is limited that the Advance Ruling had been sought by the proprietorship company and is, therefore, not binding on the partnership company, which is a distinct entity but he has nowhere stated as to how the product classified under the Advance Ruling was distinct from the present goods. Hence, in the present facts and circumstances, the classification of Flavoured Supari under CTH 0802, as held in the Advance Ruling, would equally apply in the present case. CONCLUSION 22. The goods imported by the appellant are neither product of betel nut nor preparation containing betel nut but are only betel nuts in cut pieces and are excluded from Chapter Heading 2106 and the same are classifiable under chapter Heading 080....