TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 807
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....ari', and 'Boiled Supari' packed in consumer packing and bulk packing, and the applicant has sought ruling on the classification under the Customs Tariff Act, 1975, of goods which are proposed to be imported. 3.1 The applicant has stated that, the principal raw material used by the foreign manufacturer for the proposed goods for import, will be raw betel nuts covered under Heading 0802 80 of the First Schedule to the Customs Tariff Act, 1975, however, goods to be imported by the applicant would not contain lime, katha or tobacco but may contain other ingredients such as cardamom, copra, menthol, spices, sweetening agents. Further, the applicant has also described the process of preparation of the import items as under :- (A) 'API Supari' - Following processes are conducted on raw green fresh betel nut : removing of large impurities by manual labour, boiling in water for 6 hours, mixing food starch, drying, polishing and packaging. (B) 'Chikni Supari' - Following processes are conducted on raw green fresh betel nut : removing of large impurities by manual labour, slicing in small pieces, boiling in water for 6 hours, mixing food starch, dryin....
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....d that, processed betel nut, which is a food preparation of betel nut product known as 'Supari', falls under Chapter Heading 2106 90 30 of the Customs Tariff; the above-mentioned items are subjected to certain processes and added with certain materials, resulting as "preparation of betel nut"; that, Note 2 of Chapter 21 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, copra or menthol"; products intended to be imported do not contain any of the such product namely katha (catechu) or tobacco. 3.4 Further, the applicant rely on the findings dated 20-5-2021 of Hon'ble Authority of Advance Ruling, Delhi in the case of M/s. Great Nuts Impex Private Ltd. [2021 (378) E.L.T. 692 (A.A.R. - Cus. - Del.)] wherein ruling covers all the various preparations of betel nut, which are subjected to various processes of cleaning, enhancing preservation, enhancing appearance or presentation and certain materials added. At the end of processes, betel nuts retain the charac....
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....ected to, do not change its basic classification under 0802 80 10 of the Customs Tariff Act, 1975. * Hon'ble Apex Court in the case of Crane Betel Nut Powder Works [2007 (210) E.L.T. 171 (S.C.)] wherein inapplicability of Note 2 of Chapter 21 has been squarely ruled. * Hon'ble CESTAT, Chennai in the matter of S.T. Enterprises v. Commissioner of Customs (Chennai VII) - 2021 (378) E.L.T. 514 (Tri. - Chennai) in which a similar view was held that betel nut (Arecanuts) subjected to processes like dehusking, cleaning, boiling, drying etc. do not change its character and would continue to merit assessment under Chapter Heading 08.02 of Customs Tariff Act, 1975. 4. Comments in the matter have been received from the concerned Commissionerate wherein, it is inter alia stated that, there are two headings in the Customs Tariff which are applicable to areca nuts/betel nut and betel nuts product known as Supari; on plain reading of the supplementary Note 2 of Chapter 21, it is unambiguously clear that only the preparation of betel nuts falls under Chapter 21 and not the processed betel nuts; there is difference between preparation and processing; processing of betel nuts is a series of eve....
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....such processes do not amount to manufacturing and hence such goods fall under the Chapter Head 0802. The AR also cited other Rulings of AAR, Delhi in the matter of M/s. Great Nuts Impex Pvt. Ltd.; ruling of CAAR Mumbai in the matters of M/s. Rose Marry International and Samreen International Pvt. Ltd. and M/s. Zaveri Enterprises in support of their claim that the goods in question are classifiable under Chapter 0802. The Authority asked the AR as the similar matter has already been settled down by the Hon'ble High Court of Delhi confirming the view taken by CAAR, New Delhi, do they have any additional facts to be submitted apart from the facts already settled down by the Hon'ble High Court of Delhi? The AR replied that they do not have any such additional submissions to give. 6. Finding that the application is valid in terms of the provisions of the Customs Act, 1962 and the Customs Authority for Advance Rulings Regulations, 2021, having gone through submissions of the applicant, comments of the concerned Commissionerate and having heard the applicant, I proceed to examine the question on merits. 7. Since the question under the application for advance ruling relates to classifica....
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....e to the Customs Tariff Act, HSN and plethora of judgments, besides common understanding and parlance, every irreversible process does not result in obtaining a new product with a distinct classification even at the eight or ten-digit level; and every irreversible process does not result in coming into being of a "preparation of the raw material". Therefore, I conclude that the processes to which raw betel nuts have been subjected to obtain API Supari: Chikni Supari, Unflavoured Supari, Flavoured Supari and Boiled Supari are squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as "preparations" of betel nut, which is sine qua non for a goods to be classifiable under Chapter 21. 8.4 In the case of flavoured supari, the question to be answered is whether the addition of special flavouring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21. In this regard, the judgment of the Hon'ble Supreme Court of India in the case of M/s. Crane Betel Nut Powder Works and of the CESTAT....