TaxTMI 
TaxTMI 
2024 (6) TMI 1454
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.... Durgapur ICD, Tughalkabad ICD, Pithampur ICD and Mundra Port. 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 The applicant has referred the ruling in his own matters in CAAR Ruling No. CAAR/Mum/ARC/36/2022, dated 31-10-2022 issued against Application No. CAAR/CUS/APPL/55/2022-0/0 Commr-CAAR-MUMBAI issued in matters of the applicant for the port of JNCH. 2.1.1 REASONS FOR ADDITION OF PORTS - The applicant submits that in view of their competitor's prices they are finding it extremely difficult to manage the sale prices and the high road transport costs to make supplies from JNCH to their customers in Uttar Pradesh, West Bengal, Delhi, Madhya Pradesh and Gujarat. For ease of doing business and to save on road transport costs, the applicant intends to also import such goods from ports nearer to their customers to reduce their road transport and to reduce various hurdles faced in long distance inter-State transport of the goods, as the case may be. For above reasons the applicant is filing this application with required fees and supporting documents for addition....
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....outh Fresheners 5.2.4.1 Dried fruits/vegetables/nut-based mouth fresheners 5.2.4.2 Spice based Mouth Fresheners 5.2.4.3 Other Traditional mouth fresheners not covered in 5.2.4.1 and 5.2.4.2 2.5 CLASSIFICATION: In CAAR Ruling No. CAAR/Mum/ARC/36/ 2022 dated 31/10/2023 the applicant had submitted that - (a) In terms of supplementary note 2 to Chapter 21 which read as : 2. 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. And in terms of the description, Betel nut product known as "Supari" as appearing in heading 2106. Chapter 21 1st Schedule to Customs Tariff Act, 1975 Menthol/Scented Sweet Cutting Supari being an edible manufactured product of betel nut, is squarely covered under the tariff description in terms of GRI (1) read with GRI (2)(a) appended to Customs Tariff Act, 1975. (b) In terms of the indicated additives like swe....
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.... (c) Removing of small impurities by de-stoner, Metal Deflection (Removal of metal item, if any), (d) Garbling in Automatic Garblers, (e) Polishing in Polishing Machine, (f) Sterilization to remove bacterial count, (g) Cutting, (h) Blowing of weightless particles in blower, (i) Gravity separation by Automatic Gravity Separation Machine, (j) Roasting in Fire Gas Rotary Roaster, (k) Adding scents and flavours such as Menthol, Spices, sweetening agents etc. in desired quantities along with liquid flavors (as and if desired) and edible oil are mixed in automatic mega size blenders, (l) Packaging in industrial packs of 50kg to 80kg as per requirement, (m) This process does not contain any materials like Lime, Katha (catechu) and tobacco. 3.1.6 Also, in terms of the indicated additives like sweeteners, flavours and men....
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....bsence of an equivalent clarification in Customs as is in GST Circular No. 163/19/2021-GST, dated 6th October, 2021 which holds that (relevant text reproduced) : Applicability of GST on scented sweet supari & flavoured and coated Illaichi : "7.1 Representations have been received seeking clarification regarding classification and applicable GST rates on flavoured and coated Illaichi, and scented sweet supari. 7.2 Scented sweet supari falls under tariff item 2106 90 30 as "Betel nut product" known as "Supari" and attracts GST rate of 18% vide entry at S. No. 23 of Schedule III of notification No. 1/2017-Central Tax (Rate) dated 28-6-2017. 7.3 Flavoured and coated Illaichi generally consists of Cardamom Seeds, Aromatic Spices, Silver Leaf Saffron, Artificial Sweeteners. It is distinct from Illaichi or cardamom (which falls under heading 0908). It is clarified that flavoured and coated Illaichi is a value-added product and falls under sub-heading 2106. It accordingly attracts GST at the rate of 18% (S. No. 23 of schedule III of notification No. 1/2017-Central Tax (Rate) dated 28-6-2017)." 4. Out of all the four concerned Customs Commissionerates,....
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....uct containing betel nut/supari, for e.g. Mouth freshener etc. It is a preparation containing bete/nut/supari but it has a different identity, such products are classifiable under CTH 21069. In the instant case, the product proposed to be imported is Bulk Cutting Sweet Supari is nothing but processed supari retaining its original identity of betel nut/supari hence it is rightly classifiable under CTH 0802 80 and NOT under CTH 21069. This fact can also be corroborated by point no. 5 of Annexure-I which clearly states that the processes which are being conducted on raw dried Betel Nut, is removing of impurities, polishing, sterilization etc. These activities are clearly covered under the supplementary note 3 of Chapter 08 of Customs Tariff Act, 1975 as well as the description given in the HSN. 4.6 Further attention is invited towards the judgment of the Hon'ble Apex Court of India in Civil Appeal No. 6659 of 2005 of M/s. Crane Betel Nut Powder Works v. Commissioner of Customs & Central Excise, Tirupathi [2007 (210) E.L.T. 171 (S.C.)], and of the CESTAT, Chennai in the case of M/s. Azam Laminators Pvt. Ltd. [2019 (367) E.L.T. A22 (Tri. - Chennai) where the scented betel nut was bei....
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....erials including Supari with which it is manufactured. The preparation as correctly held in the Ruling, is classifiable under 2106.90.30. The contentions raised by Indore Commissionerate have already been addressed in Para 5.2 of the Original Ruling. These prayers are for only addition of ports. The product under consideration Bulk Cutting Sweet Supari is not processed supari but is a preparation of multiple raw materials including the Supari which have permanently lost their character after completion of manufacturing process as a new product as preparation of CTH 2106 emerges. There is no appeal against the Original Advance Ruling which is final and binding as per the mandate of Section 28J of the Customs Act, 1962. In matters of Isha Exim Versus Union of India, Commissioner of Customs (NS- I), Mumbai, Deputy Commissioner of Customs (NS-I) Maharashtra reported 2023 (12) TMI 920 - Bombay High Court (Writ Petition No. 10512 OF 2023 Dated : - 18-12-2023) Hon'ble Bombay High Court has ruled that - "13. The Chennai Bench in the above referred decision in the case of S. T. Enterprises (supra) in paragraph 20 observed in relation to reliance on the ruling in case of M/s. ....
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....Tariff, there is no difficulty in holding that there being a specific entry for the product in question, viz. "Menthol Scented Supari" under Chapter 21, applying the rules of interpretation, the classification of the said product has to be only under Chapter 21 and not Chapter 8. And 31. Firstly, vide Finance (No. 2) Act, 2009 dated 19th August, 2009, there has been an insertion of Note 6 in Chapter 21, which specifically relates to Tariff Item 2106 90 30 relating to 'supari' and stating that the process of adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients other than lime, katha (catechu) or tobacco to betel nut, in any form, shall not amount to "manufacture". However, we are conscious of the fact that this amendment was only under the Central Excise Tariff Act and not the Customs Tariff Act. 32. Secondly, w.e.f 1-7-2017, the GST Act was introduced and the concept of taxation itself has undergone a change from 'manufacture' to 'supply'. The Supplementary Note 2 in Chapter 21 of Cost Tariff is also verbatim the same as Supplementary Note 2 under Chapter 21 of the Customs Tariff Act, 1975. This only exemplifies the....
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....rity for what it decides". As observed by Lord Halsbury in Quinn v. Leathern, reported in 1901 AC 495, quoted hereunder for easy reference : "... that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides." 35 (c) In Rajendra Singh v. Stale of U.P., reported in [2007] 7 SCC 328, also the Apex Court approved the said position, by citing the above passage as well. Thus viewed from these angles also, the ratio laid by the Apex Court in Crane Betel Nut Powder Work's case cannot be enlarged and read into the facts of the present case, under the guise of logical reasoning." In view of submissions above and in view of department accepted Rulings, the comments received from Indore Customs are incorrect and inapplicable. Therefore, the department has accepted the ruling which is binding in terms of Section 28J of the Act. ....
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....atter in respect of Nhava Sheva Port and the instant four applications are filed by the applicant just for the addition of the Durgapur ICD, Tughalkabad ICD, Pithampur ICD and Mundra Port. Present application of the applicant needs to be seen in the context of a legal framework governed by Customs Tariff Act, 1975, specifically Section 3(7), Chapter notes of Chapters 8 and 21, section notes, supplementary notes of chapter 8 of the Customs Tariff, CBIC Circular No. 163/19/2021-GST, dated 6th October, 2021 issued based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021 clarifying classification aspects related to the product covered in the instant application and explanations (iii) and (iv) of the IGST rate notification vide entry at S. No. 23 of Schedule III of notification No. 1/2017-Central Tax (Rate) dated 28-6-2017, amended from time to time. 7.1 Insofar as scented sweetened supari is concerned the contending classifications can be from Chapter 8 and Chapter 21 of the Customs Tariff Act, 1975. The relevant notes to chapter 8 lay down the following : - 3. Dried fruits or dried nuts of this Chapter may be partially rehydrated or ....
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....In this classification the word 'preparation' is a guiding factor. The applicant has submitted the detailed process carried out on the raw products i.e., betel nut and cardamom (illaichi) supra. These processes as described and carried out on the subject products are essential for the preparation of the subject goods as mouth freshener and goods after subjecting to such processes cannot be ordinarily used for any other purpose. There is nothing on record to dispute claim of the applicant. The betel nut products commonly known as supari is covered under sub-heading 2106 90 30 of this chapter. Applicant has relied upon C.B.I. & C. Circular No. 163/19/2021-GST, dated 6th October, 2021 for their claim to the classification of scented sweetened supari. However, before turning to further analysis of this classification issue let me examine me legal framework for deciding classification of flavoured and coated illaichi (Cardamom). 7.3 Insofar as flavoured and coated illaichi (Cardamom) is concerned the contending classifications can come from the chapters 9 and 21 of the Customs Tariff Act, 1975. Chapter 9 covers Coffee, tea, mate and spices and Heading 0908 covers Nutmeg, Mace and Car....
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....e product in terms of supplementary note 5(b) of the chapter 21 of the Customs Tariff Act, 1975 examination of relevant CTHs under chapter 21 is essential. 7.4 The chapter 21 includes within its ambit, miscellaneous edible preparations and tariff item 2106 covers food preparations not elsewhere specified or included. The chapter notes mandate that : 1. This Chapter does not cover : (a) Mixed vegetables of Heading 07.12; (b) Roasted coffee substitutes containing coffee in any proportion (heading 9.01); (c) Flavoured tea (heading 9.02); (d) Spices or other products of headings 9.04 to 09.10; The Supplementary Note 5(b) to Chapter 2.1 reads as : "5. Heading 2106 (except Tariff Items 2106 90 20 and 2106 90 30), inter alia, includes. (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption". Further, relevant tariff item provides as: 2106 - Food preparations not elsewhere specif....
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....stoms Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.' Further, I find that identical provisions have already been incorporated in CGST rate Notification No. 1/2017-CGST (Rate), dated 28-6-2017. 8.2 Applicability of the CBIC circular read with the explanations to the IGST rate notification to the present case can be properly understood by referring to the Section 3(7) of the Customs Tariff Act, 1975. Section 3(7) of the Customs Tariff Act, 1975 is reproduced below : "Section 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. (7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty percent as is leviable under Section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) or sub-section (8A), as the case may be." This provision has been substituted (w.e.f. 1-7-2017 vide Notification No.....