TaxTMI 
TaxTMI 
2021 (6) TMI 1195
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....s Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai with effect from 04.01.2021, the said application was transferred to CAAR, New Delhi in terms of section 28-F (3) ibid and regulation 31 of CAAR Regulations, 2021. 3. On perusal thereof, and in view of the time limit of three months for pronouncing its advance rulings from the date of receipt of this application prescribed under section 28-I (6) ibid, it was held that the aforesaid application received in the O/o AAR, New Delhi on 05.03.2020 has become time barred for the CAAR. 4. However, on constructive interpretation of the powers vested with this Authority, vide letter dated 03.03.2021, the applicant was advised to intimate whether they continued to be interested in obtaining ruling of this Authority, and if so either resubmit their application in the Form CAAR-I appended to Customs Authority for Advance Rulings Regulations, 2021, or simply affirm that the declarations made in the earlier application remain valid and unchanged, at the earliest to this Authority. It was also informed that the date of receipt of such resubmitted application or affirmation, as the case may be, shall be taken as the date....
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....ter 8 or is akin to such processes will not take the classification of betel nut out of the purview of Chapter 8. It has also been pointed out that the advance ruling dated 07.08.2015 in the case of M/s Excellent Betelnut Products Private Limited, which was further relied upon in the advance ruling order dated 31.03.2017 in the case of M/s Oliya Steel Private Limited was rendered without taking into consideration the Chapter Note 3 of Chapter 8 as the contention was not raised therein. Hence Rulings are sub-silentio the provisions of Chapter Note 3 of Chapter 8. Hence, they cannot be relied upon as binding precedents. It is further pointed out that the processes such as re-hydration, preservation, stabilization or for improving or maintaining the appearance of the areca nut/betel nut will not take the product out of the purview of Chapter 8. He has placed reliance on the judgement of the Hon'ble Supreme Court in the case of M/s Crane Betel Nut Powder Works reported in 2007 (210) ELT 171(SC), in support of his contention. 7. In accordance with the procedure prescribed under the CAAR Regulations, 2021, personal hearing was scheduled on 25.03.2021. Shri B.K. Singh, Advocate, wh....
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....t. Shri Singh further contended that the betel nut items covered by the application are boiled and cannot be covered under a sub-heading meant to cover only fresh and dried items. Shri Singh summed up his arguments contending that on account of various processes carried out on the betel nut, various product cited by them in their application are classifiable under Chapter 21 of the Import Tariff in line with Supplementary Note 2 of Chapter 21, as ruled by the erstwhile AAR in the cases cited by him. 8. As per Annexure -I to the application, it is submitted that the applicant proposes to import a preparation of Betel Nuts known as "Boiled Supari" packed in consumer packing and bulk packing. It is stated that the principal raw material used by the foreign manufacturer for the proposed import goods is raw betel nut covered under Chapter 8, specifically falling in heading 08029000 of the schedule to the Customs Tariff Act, 1975. The process of preparation of the import item is given as under: (i) 'API Supari': Following processes are conducted on raw green fresh betel nut: removing of large impurities by labourers, boiling in water for 6 hours, mixing food starch, d....
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....ons, 2021, having received the comments of the concerned Principal Commissioner(s)/Commissioner(s) of Customs, and having heard the applicant in virtual mode, I proceed to examine the question on merits. 10. The applicant proposes to import goods said to be preparation of Betel Nuts known as "Boiled Supari" but on the basis of processes involved in the preparation of Supari, five different types of Supari have been mentioned. It is also pertinent to mention that in Unflavoured and Flavoured Supari, process of boiling of betel nut is absent. It is stated that the principal raw material used by the foreign manufacturer for the proposed import goods is raw betel nut covered under Chapter 8, specifically falling in heading 08029000 of the schedule to the Customs Tariff Act, 1975. The process of preparation of the import item has been given wherein apart from preparation of Boiled Supari, process of preparation involved in a number of other products, namely, API Supari, Chikni Supari, Unflavoured and Flavoured Supari has also been elaborated. Since the applicant proposes to import a preparation of Betel nuts known as "Boiled Supari" packed in consumer packing and bulk packing, admitt....
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....cerned Principal Commissioner(s)/Commissioner(s) of Customs, along with reliance on the judgement of the Hon'ble Supreme Court/Hon'ble High Court and the CESTAT, there are two contending entries in the CTH for the aforesaid different types of Supari/Areca nut/Betel Nut, viz. sub- heading 2106 90 30 and sub-heading 0802 80 90. Therefore, it would be useful to carefully consider the two competing tariff entries and the guidance relating thereto. 13.1 Chapter 8, which covers Edible fruit and nuts; peel of citrus fruit or melons includes, inter alia, the following Note 3: - '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 fruit or dried nuts. ' 13.2 In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are accommodated ....
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....at 2007 (210) E.L.T. 171 (S.C.) has no application in the facts of the cases before them. It is my considered opinion that in order to arrive at the appropriate classification of the said different types of goods, all originating from common source viz. raw green fresh betel nut, a more comprehensive view needs to be taken than in the aforesaid M/s Excellent Betelnut case. 16. Having gone through the advance ruling application, supporting arguments for classification of the said goods under Chapter 21 as preparations of betel nuts, precedence of erstwhile AAR in support of the said classification, contention of the concerned Principal Commissioner(s)/Commissioner(s) of Customs, case laws relied by them to argue the appropriate classification of the said goods, I proceed to give ruling on the question posed for advance ruling. 17. Advance ruling has been sought on classification of five different goods, each known as "supari" in common trade parlance, albeit with differentiator, viz. API, Chikni, unflavoured, flavoured and Boiled. The basic raw material for each of the five goods is raw betel nut, which is classifiable under Chapter 8, more specifically sub-heading 080280. I a....
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....nder such process. I note that the learned advocate was vehement in his contention that process of boiling, being irreversible in nature, would result in bringing into being a new product and be eligible to be called a preparation of betel nut. He also contended that boiled supari cannot be classified under the said sub-heading of Chapter 8. I readily admit that boiling is an irreversible process, a boiled betel nut would be distinct from un-boiled betel nut, and a boiled betel nut cannot be "un-boiled" in reverse. However, it is readily not clear as to why a boiled and subsequently dried betel nut should be excluded from the purview of dried betel nut? Further, it is equally obvious that boiling per se does not result in obtaining a preparation of betel nut. Speaking more generally, in view of the design of the Schedule to the CTA, HSN and plethora of judgements, 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". Notwithstanding the vehemence wit....