TaxTMI 
TaxTMI 
2023 (10) TMI 1512
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....l Nuts (whole or cut)" for imports through 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....
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....cited following case laws and has submitted that Hon'ble Supreme Court has decided and reiterated that the HSN Explanatory Note is the 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 .- Chill....
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....this Chapter for classification as a preparation of Chapter 20. The addition of small quantities of sugar does not affect the classification of fruit in this Chapter. The Chapter also includes dried fruit (e.g., dates and prunes), the exterior of which 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 impo....
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....de the purview of the said Chapter. 5. The Applicant submits that the vital question as to whether the roasted nuts would fall under the Chapter Heading 0802 or Chapter Heading 2008 was affirmatively answered in favour of the later (CTH 2008) by the Hon'ble Supreme Court in the case of Commissioner of Customs & Central Excise, Goa 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 exam....
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....8 and HSN Notes. Hence 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 the goods to be classifiable under Chapter 20. 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 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 mi....
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....1/2021 in the case of M/s Vaibhav Enterprises ii CAAR Delhi vide ruling no. CAAR/Del/Sarveshwari/11/2021 in the case of M/s Sarveshwari industries. iii. CAAR Delhi vide ruling no. CAAR/Del/Naman Agri/09/2021 in the case of M/s Naman Agri Impex Private Ltd. iv. Chennai CESTAT order in M/s S.T. Enterprises v/s Commissioner of Customs (Chennai-vii) [ 2021(378) E.L.T.514(Tri. Chennai)]. 7. A personal hearing in the matter 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....
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....%) may result in the product being completely burn out to become ash, literally. By this the department is attempting to achieve what could not be achieved through legal process. Rather it is pertinent to mention and draw attention of the authority to the Lab Report No.173/MCH/10.08.2023 dated 24.08.2023 issued by CRCL Chennai in respect of import of Roasted betel nut by M/s Universal Impex (IEC No. 0313014159) based on the CAAR ruling No. CAAR/Mumbai/ARC/39,40,41/2023 dated 12.05.2023. 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 c....
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....the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process". 8.2. Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, 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, otherwi....
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....s Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802. 8.5. The applicant has answered all the queries raised by the Jurisdictional Commissionerate during the Personal Hearing. The queries raised regarding the method of packing of the goods in question and the moisture content have been logically answered by the applicant in its rebuttal submitted in this office. In support of it's arguments the applicant has made reference to the results/reports of some tests of the goods in question carried out at Chennai 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, t....
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....not classifiable under chapter 8 of the Tariff. 10. 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 accordingly-"in view of the specific CTH 2008 19 20: Other roasted nuts & seeds in chapter 20 of the first schedule to the Customs Tariff, HSN Explanatory note to CTH 2008, various Supreme Court rulings upholding guiding value of the HSN Explanatory notes for deciding classification under Customs Tariff Act, 1975 and previously mentioned two 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 tr....