TaxTMI 
TaxTMI 
2023 (10) TMI 1512
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....the port of Chennai. The applicant intends to import "Roasted Areca/Betel Nuts (whole or cut)" from Burma, Indonesia, Sri Lanka. 2. Applicant has stated as follows in their statement of relevant facts having a bearing on the question(s) raised enclosed with the CAAR-1 application: 2.1 As per the present scheme of Classification of commodities under the Customs Tariff Act, 1975 reproduced below (relevant portion), Fruits, Nuts and other edible parts of plants are classified under the Chapter Heading 2008, while roasted nuts are particularly and specifically classified under the Tariff Item 20081920: 2008 FRUIT, 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 - Nuts, ground-nuts and other seeds, whether or not mixed together : 2008 11 00 -- Ground-nuts 2008 19 -- Other, including mixtures: 2008 19 10 --- Cashew nut, roasted, salted or roasted and salted 2008 19 20 --- Other roasted nuts and seeds 2008 19 30 --- Other nuts, otherwise prepared or preserved 2008 19 40 --- Other roasted and fried vegetable products 2008 19 90 ....
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....he safe and dependable guide in the matters of classification of items: i. L.M.L. Ltd. Versus Commissioner Of Customs Reported In 2010 (258) E.L.T 321 (S.C) ii. Holostick India Ltd. Versus Commissioner Of Central Excise, Noida Reported In 2015 (318) E.L.T 529 (S.C) iii. Collector Of Central Excise, Shillong Versus Wood Craft Products Ltd Reported In 1995 (77) E.L.T 23 (S.C) 4. The Applicant submits that while Chapter 8 of the Customs Tariff Act, 1975 deals with 'edible fruits and nuts', that include areca/betel nut, Chapter 21 deals with 'miscellaneous edible preparations'. A closer reading of the Chapter Note and the General Explanatory Note to the Chapter 08 reproduced below would convey that only 'nuts' that are processed for preservation and as the manner prescribed therein are classified under the Chapter 08. Chapter 8 Edible fruit and nuts; peel of citrus fruit or melons Notes. 1 .- This Chapter does not cover inedible nuts or fruits. 2 .- Chilled fruits and nuts are to be classified in the same headings as the corresponding fresh fruits and nuts. 3 .- Dried fruit or dried nuts of this Chapter may be partially rehydrated, or treated....
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....ich may be covered with a deposit of dried natural sugar thus giving the fruit an appearance somewhat similar to that of the crystallised fruit of heading 2006. However, this Chapter does not cover fruit preserved by osmotic dehydration. The expression "osmotic dehydration" refers to a process whereby pieces of fruit are subjected to prolonged soaking in concentrated sugar syrup so that much of the water and the natural sugar of the fruit is replaced by sugar from the syrup. The fruit may subsequently be air-dried to further reduce the moisture content. Such fruit is classified in Chapter 20 (heading 20.08). From the above, it is amply clear that none of the processes referred above is employed in the product proposed to be imported. Further, the fruits air-dried to reduce moisture itself excludes it from the purview of Chapter 08 and places the same under the Chapter 20. Therefore, the processes involved in the proposed import item, 'Roasted Areca Nut (Whole/split) is completely different from the preservative processes for the products falling under the Chapter Heading 0802 and hence would not fall under the said Chapter. Apart from the above, the impossibility of classif....
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.... Vs Phil Corporation Ltd reported in 2008 (223) E.L.T 9 (S.C). Hence, the settled position of law is that nuts falling under Chapter 08 would be classified under Chapter 20, if the same is subjected to the process of roasting. 6. The Chennai-II Customs Commissionerate which is the jurisdictional Customs Commissionerate has responded to the application and the same is reproduced below: 6.1 The applicant's claim that roasting is not defined in the Customs Tariff Act 1975 is not correct. Though roasting as a process is not defined, it will fall under the 'moderate heat treatment' mentioned in Chapter Note 3 of Chapter 8, which is reproduced below. "3. Dried fruits or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes: a) For additional preservation or stabilization (for example, by moderate heat treatment, sulphuring. the addition of sorbic acid or potassium sorbate) b) To improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities of glucose syrup), provided that they retain the character of dried betel nut, fruit or dried nuts." 6.2 The applicant's claim that after repeate....
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....ables, fruit, nuts or other parts of plants". Mere roasting of betel 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 betel 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 mentioned in para 2 it is evident that there is neither any mixture of products nor any change in the original good which tantamount to no preparation. 6.4. The applicant has claimed that dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. This is another misrepresentation of facts since the Chapter 20 cannot and does not cover any nuts or fruits prepared or preserved by the processes specified under Chapter 8 as per the Chapter Note 1 of the Chapter 20 and the chapter note 3 of Chapter 8 includes roasting under 'moderate heat treatment', hence the impugned goods cannot be classified under Chapter 20. The said ch....
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....was conducted on 14.09.2023. During the virtual personal hearing the authorized representative of M/s. Shree Ganesh Traders Shri Ramesh Advocate reiterated their submissions made in the application to CAAR. Further they elaborated the product in question i.e. Roasted Betel/Areca nuts. They informed that their product is prepared through intense roasting of areca nuts such that the moisture content in it goes below 6%. The applicant requested the authority to clarify the correct CTH for the proposed import of their product. 7.1 1 The Jurisdictional Commissionerate, represented by Assistant Commissioner Shri. Indra Bahadur Mishra of Chennai Customs reiterated their submissions made in the official letter dated 22.08.2023 submitted to the Secretariat, CAAR, Mumbai. They further stated that the submission of the applicant regarding the moisture content appears doubtful since the same can be obtained by normal heating of areca nuts when exposed in sun for longer period. Also the product in question are usually packed in Jumbo bags and not in pre-packed condition therefore it becomes very tough for field formations to differentiate between areca nuts pertaining to chapter 8 and the prop....
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....5.2023. To a specific test memo by the Customs department to ascertain whether the item under import was "roasted beetle nut" or not the Customs lab after testing the item reported as follows: "The item is in the form of grey brown whole nuts having cracks on the upper surface. It answers tests for areca nuts active ingredients, arecoline and Homarecoline. Moisture content=3.92% Carbohydrate content=1.2% In view of reference available and as the moisture content and carbohydrate content of the sample under reference is less than the raw areca nut, it may be considered as dry roasted areca nuts. Based on the above test report, the Chennai customs has cleared the consignment, the truth and veracity of the same can be verified from the same customs representative who attended the personal hearing. This being the fact available on public record, suggesting moisture content to be 1.5% is nothing short of distorting the truth and in fact it tantamount to misguiding the Authority. iii. Last but not the least, it is respectfully submitted that the issue on hand has been unequivocally dealt with by the CAAR, Mumbai in its various orders and the Rulings on the subject matter is e....
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....the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Heading 2008 covers Fruit, 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. Roasting is a process used for bringing in to existence roasted nuts and as discussed earlier I find that the processes mentioned in chapter 8 do not cover roasting process. 8.3. Note 3 to Chapter 8 specifies certain treatments that could be carried out on the dried nuts for additional preservation or stabilization or to improve or maintain their appearance. The applicant in their applicat....
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....nai Customs. I concur with the arguments submitted by applicant in its rebuttal. 9. It is an established fact that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Tariff Act. The case of Commissioner of Customs & Central Excise vs Phil Corporation Ltd in Appeal (civil) 2215 of 2002 dated 07/02/2008, is directly relevant and applicable in the instant case of the applicant. In the judgement of the said case Honourable Supreme Court has held "a number of cases, this Court has clearly enunciated that HSN is a safe guide for the purpose of deciding issues of classification. In the present case, the HSN Explanatory Notes to Chapter 20 categorically state that the products in question are so included in Chapter 20. The HSN Explanatory Notes to Chapter 20 also categorically state that its products are excluded from Chapter 8 as they fall in Chapter 20. In this view of the matter, the classification of the products in question has to be made under Chapter 20." While delivering Phil Corporation Judgment honourable Supreme Court has clearly spelt out importance of HSN Explanatory notes in deciding the matters of classification plac....
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....wo Supreme Court judgments classifying roasted nuts which include almonds, betel nut and other nuts under chapter 20 by taking recourse to HSN explanatory note to Tariff Heading 2008", I rule that roasted betel nuts are correctly classifiable under the tariff item 2008 19 20 of chapter 20 of the first schedule of the Customs Tariff Act, 1975." 11. The Honourable High Court of Madras in its recent judgement on 01.08.2023, has upheld the classification of Roasted Betel Nuts under CTH 2008 19 20. The Honourable High Court went on to analyse the various aspects in determining classification and summed up that: (a) Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH. (b) Roasted betel/areca nut having been specifically classified under CTH 2008 19 20, the attempt to classify under CTH 08 02 80 would fall foul of the settled rule of construction that specific entry would prevail over general entry. (c) HSN explanatory notes is normally a safe guide in determining classification under CTH. Roasted areca / betel nut having been mentioned in CTH 2008 19 20 under HSN. (d) When there....