TaxTMI 
TaxTMI 
2024 (1) TMI 1450
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....ata Port; Accordingly, two separate applications have been filed before CAAR. 2. The applicant is currently engaged in the local trading of paan shop related spices & betel nuts items. The applicant intends to import Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) and sought ruling of the Authority in the matter of classification of the goods which in the opinion of the applicant, are classifiable under chapter Sub-heading 20081920. The submission of the applicant are as under: 2.1 The process of "roasting" is neither defined in the Customs Tariff nor in the HSN Explanatory/Sections/Chapter Note. 2.2 The process for roasting involved in the manufacture of the above said goods is as under: - 2.3 Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut): Following processes are conducted on raw betel nut-: a) De-husking the raw betel/areca nut and drying the same before being fed into the roasting oven. b) Feeding the fresh areca nut into a seed roasting oven, heating up to 130-150 deg. C and roasting the fresh areca nuts in an oven of the seed roasting machine. c) Take the areca nuts out of the oven, cooling at room t....
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....and physical characteristics of the areca nut by reducing arecoline and tannin as well moisture. 2.8 In respect of alternate CTH 2106, the applicant draw attention to Chapter Note 2 and Explanatory Note (A) to Chapter 21, which is as under: "Betel Nut product known as Supari" means any preparation containing betel nuts but not containing any one or more of following ingredients, namely lime. katha (Catechu) and tobacco whether or not containing any other ingredients such as cardamom, copra or menthol. 2.9 As per the Explanatory note, the heading covers preparations for use, either directly or after processing (such as cooking, dissolving or boiling in 2.9 water, milk or other liquids), for human consumption. 2.10 The goods have undergone roasting, but they don't contain lime, Katha (catechu) and tobacco. Further, roasted betel nut can be consumed directly by merely cutting them into pieces. Therefore, the goods are equally classifiable under Chapter 21 of the Customs Tariff Act, 1975. 2.11 The applicant also referred to and discuss the case law of M/s Crane Betel nut Powder Works reported in 2007 (210) E.L.T 171 (S.C) stating that in this case, the Hon'ble Supreme Cour....
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....Roasting is not aimed at additional preservation or stabilization or to improve or maintain their appearance. 2.17 The applicant has further submitted that as per their best knowledge and belief the items are classified under Custom Tariff heading 20081920. The said entry in Customs tariff Act 1975 reads as under: Tariff Item Description of Goods Unit 2008 Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included 2008 19 - Other, including mixtures: 2008 19 20 - Other roasted nuts and seeds Kg's (Kilo grams) 2.18 The applicant has relied upon the following judgments-: a. Ruling No. CAARMunn/ARC/39,40&41/2023 dated 07.12.2022 passed in the matter of M/s. Universal Impex, Mumbai Vs. The Commissioner of Customs II, Chennai, The Commissioner of Customs, Nhavasheva & the Commissioner of Customs (Krishnapatnam), Andhra Pradesh in Application No. CAAR/CUS/APPL/19, 21, 22/2023-O/o Commr.-CAAR-MUMBAI, where identical goods are held classifiable under 20081920. b. The Customs Department had challenged the Advance Ruling of the CAAR,....
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....s to M/s Perfect Trading Co. 4.1.2 As per records available in this office, no such matter is pending before any officer in this office. Further, this office is not a party in any appeal on such matter pending before any Appellate Tribunal or court. 4.1.3 As per the applicant, they are planning to import and trade, Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) & Roasted Areca Nut (Cut) under ITC HS Code 2008. 4.1.4 The question in the application is "Whether the Goods being "Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) & Roasted Areca Nut (Cut)" imported by the applicant from Countries Myanmar., Thailand, Indonesia, Vietnam, Cambodia, Sri Lanka, Laos & Singapore is classifiable under Chapter Sub-Heading 20081920 of the first schedule to the Customs Tariff Act, 1975?" a. The applicant's claim that roasting is not defined in the Customs Tariff Act 1975 does not appear to be correct. Though roasting as a process is not defined, it appears to fall under 'moderate heat treatment' mentioned in Chapter Note 3 of Chapter 8, which is reproduced below- "3. Dried fruits and dried nuts of this Chapter may be partially rehydrated, or treated for the followi....
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....tted by the applicant is squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Notes. Hence at the end of the said processes, the areca nuts retain the character of areca nut and do not qualify to be considered as "preparations" of areca nut, which is sine qua non for the goods to be classifiable under Chapter 20. e. To be classified under Chapter 20 there should be some preparation as the Chapter heading reads as "Preparations of vegetables, fruit, nuts or other parts of plants", mere roasting of areca nut does not render the product to be distinctive as claimed by the applicant or does not alter the character of the original good. Hence, it remains the areca nut and rightly classifiable under Chapter 08. According to Cambridge dictionary, "Preparation is a mixture of substances, often for use as a medicine". According to Collins Dictionary, "A preparation is a mixture that has been prepared for use as food, medicine, or a cosmetic." However, in the process flow it is evident that there is neither any mixture of products nor any change in the original good. Hence, the impugned goods are rightly classified under Chapter 08. f. The applicant ....
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....applicant during the course of personal hearing. I have gone through the response from the Customs Port Commissionerate of Kolkata and Patparganj, New Delhi. However, as the matter and questions before the Authority being the same, I therefore proceed to decide the present application regarding classification of roasted Areca nut on the basis of the information on record as well as the existing legal framework having bearing on the classification of the roasted areca nut under the first schedule of the Customs Tariff Act, 1975. 7.1 I note that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting, Here, it is important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat-roasting referred in chapter 20. The terms dry roasting, oil roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the case of Alladi Venkateswarlu v. ....
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.... processes mentioned above. Roasting, as submitted by the applicant, is carried out using roasting ovens due to which betel nuts are roasted in the range of 150 degrees Celsius then cooled in room temperature and the cycle is repeated until the moisture content is less than 6 %. This clearly indicates that the roasting is much more than mild heat treatment. Even in the generally understood meaning of the terms, it is understood that roasting involves severe heat treatment and is different from moderate heat treatment as well as dehydration. Therefore, the impugned goods do not satisfy Note 3 to Chapter 8. 7.4 While examining the scope of CTH 2008, I find that as per HSN Explanatory Notes, heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, ....
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....s corresponding HSN Explanatory Note. It is important to pay attention to the fact that, in the above referred HSN explanatory note, a process of roasting is not specifically mentioned as a process of preservation or stabilization or a process to improve or maintain the appearance. Specific attention is invited to the paras 10 & 11 of the SC judgment (M/s Phil Corporation) in which paras 6 & 7 of the Supreme Court judgment in case of Ms Amrit Agro are relied upon. Para 6 inter alia reads as follows: "roasted peanuts are covered by Chapter 20. Even according to the Explanatory notes of HSN under Heading 20.08 ground- nuts, almonds, peanuts etc. which are dry- roasted, fat-roasted whether or not containing vegetable oil are the items which all would stand covered by the said Heading 20.08." Honourable Apex Court's conclusions corroborate the finding that the process of roasting is not covered by Note 3 to Chapter 8 and hence these products, roasted betel nuts are not classifiable under chapter 8 of the Tariff. 8.1 Further, in the CAAR, Mumbai Ruling No, CAAR Mumbai/ARC/39,40,41/2023 in the case of M/s. Universal Impex, the Authority has stated his findings and has ruled accordin....