TaxTMI 
TaxTMI 
2023 (10) TMI 436
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....utting 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. 3. In the course of enquiry the state....
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....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 sought to distinguish the decision of the Apex Court ....
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....ially 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). On Advance Ruling obtained in respect of '....
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....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 as these are only basic processes of enhancing the presentation and addition of flavour or sweetening of betel nuts with essential or non-essential oils, menthol, sweetening agents and do not result in ....
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....e, 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.) decided the issue of classification of betel nut (areca nut) 'whole' under Tariff Item 08028010 of CTA, 1975, referring to the Chapter Notes, it was observed as : "14. From above Note 3, it c....
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....ll 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 dated 6.10.2021 to say that IGST is payable on the imported goods in terms of section 3 (7) of Customs Tariff Act, 1975. On the face of it, the said Circular provides for, " Applicability of GST on scented sweet Supari and flavoured and ....
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.... 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 relevant date, serve notice on the person chargeable with duty or interest which has not been so levied or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice." ....