TaxTMI 
TaxTMI 
2025 (2) TMI 1366
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....The applicant submitted as under: 1.1 M/s STAR ENTERPRISE, Delhi is a proprietorship firm of Mr. Anil Kumar Aggarwal. The firm is duly registered with the respective statutory authorities viz. G.S.T. Department, Income Tax Department, D.G.F.T. Department at New Delhi. The Importer Exporter Code of the firm is AGMPA9047P and the GST number of the applicant is 07AGMPA9047P1ZT. The applicant has been regularly filing it statutory returns with the concerned departments and authorities. That the applicant is in the process of setting up its business of trading / import of Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" (hereinafter referred to as the 'subject goods') to India. The appellant intends to import the said goods mainly from Myanmar, Thailand, Indonesia, Vietnam, Sri Lanka, UAE, Cambodia, Laos, Bangladesh, Nepal & Singapore into India. That therefore the applicant is approaching this Hon'ble Authority, seeking advance ruling qua the subject goods as mentioned in the following paras of this application as the applicant intends to import the same into India and hence would like to have a proper understanding and clarification as to....
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....e for human consumption. With regards to the preservative treatment that are carried out on areca nuts, the Professor and Head of the Department of Food Process Engineering, College of Food and Dairy Technology, Koduveli, Chennai has issued a certificate clarifying the above. Thus it can be seen that the preservative treatment in this case is provisional and temporary and the preservatives can be removed before consumption of the areca nut. 1.6. That the abovementioned goods "Provisionally Preserved Areca Nuts" are specifically covered and are classifiable under CTH 0812 90 90 of the Customs Tariff Act, 1975. Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter note (3) to chapter 8 reads as follow -: "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 ch....
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....s, by way of neutralization and after getting dissolved in water the benzoic acid get removed. In cases where nut is treated with sulphur-di-oxide, these can be treated with hydrogen peroxide by which the sulphur-di-oxide is oxidized to sulphate and during the process addition of sodium bi-carbonate and water will remove the excess peroxides. 1.11. That in view of the above facts and legal provisions, the product "Provisionally Preserved Areca Nuts (whole) and Provisionally Preserved Areca Nut (Split)" are classifiable under Customs Tariff Heading 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" 1.12. That on the matter of interpretation of law of facts, the applicant most respectfully submits that as per their best knowledge and belief the items are classified under classification heading no given in Custom Tariff heading 0812 9090. The said entry in Customs Tariff Act, 1975 reads as under :- Tariff Item Description of Goods Unit 0812 10 00 - Cherries Kg's(Kilograms) 0812 90 - Other 0812 90 10 --- Mango Slices in brine 0812 90 90 --- Other Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter....
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.... THE QUESTIONS(S) ON WHICH ADVANCE RULING IS REQUIRED: - a. That the goods in question which is to be imported into India by the applicant will be Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" hence is rightly classifiable under Customs Tariff Heading 0812 and particularly 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" b. That the process mentioned in Annexure I, clearly shows that the product "Provisionally Preserved Areca Nuts (whole) and Provisionally Preserved Areca Nut (Split)" are classifiable under Customs Tariff Heading 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" c. That the items are classified under classification heading no. given in Custom Tariff heading 0812 9090. The said entry in Customs Tariff Act, 1975 reads as under :- Tariff Item Description of Goods Unit 0812 10 00 - Cherries Kg's(Kilograms) 0812 90 - Other 0812 90 10 --- Mango Slices in brine 0812 90 90 --- Other Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter note (3) to chapter 8 reads as follow -: 3. Dried Fruits....
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....nder classification CTH 0812 and more particularly under the CTH 0812 90 90. 2. As per the provisions of CAAR Regulation, 2021, the complete application of the applicant was provided to the concerned custom port, i.e. Nhava Sheva-1, JNCH and requested to furnish the requisite comment in the instant matter. The port authority vide letter dated 27.01.2025 furnished the requisite comments in the matter, wherein the port authority has requested for not to issue the rulings for classification of the goods in question under CTH 08129090 in the instant matter. The comments of the port authority in the instant matter, are under: 2.1 Comments on Point No. 1 to 8 of Form CAAR-1: Upon review of the details furnished in Points No 1 to 8 of Form CAAR-1, no specific comments or objections are warranted from our side. The information provided pertains primarily to the applicant's details, the nature of the activity, and the jurisdictional authority, which do not necessitate further elaboration. However, the details provided in these sections are noted for the record. 2.2 Comments on Point No. 9 (Annexure 1): The judicial precedents and detailed analysis presented below unequivocally ....
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....tion that preservatives can be removed (e.g .. through processes involving sodium bicarbonate or hydrogen peroxide) reinforces the argument that these treatments are superficial and reversible. The essential character of the product remains unchanged, aligning it with the classification under Chapter sub-heading 080280, which explicitly covers Areca nuts (whole or split) irrespective of such treatments. (ii) Applicability of Chapter Heading 0812: For goods to qualify under Chapter Heading 0812, they must be provisionally preserved and unsuitable for immediate consumption at the time of importation. The processes described in Annexure 1 of the application, including heat treatment and sulphuring, do not render the Areca nuts unsuitable for immediate consumption. Judicial pronouncements referenced in Para 5 corroborate that such treatments are insufficient to shift classification from Heading 080280 to 08129090. It is also pertinent to note that Chapter Heading 0812 applies to goods that have undergone preservation treatments solely to ensure their transportability and storage The description under this heading requires the goods to be unsuitable for immediate use or cons....
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....Betelnuts. Therefore, the goods Betelnut/Areca Nut after undergoing heat treatment and sulphuring are classifiable under Heading 080280 and not under sub-heading 08129090 as requested by the appellant. 2.5. HS Classification Analysis: (i) Chapter Heading 0802: HS Code 080280 specifically covers Areca nuts, including dried, whole. split. or ground nuts. The Chapter Note-3 to Chapter 8 permits treatments such as sulphuring and heat treatment, provided they do not alter the essential character of the nuts (ii) Chapter Heading 0812: * Chapter Heading 0812 applies to fruits and nuts provisionally preserved but unsuitable for- immediate consumption. The processes described in the application do not render the Areca nuts, unsuitable for immediate consumption. Instead, they confirm that the nuts retain their inherent characteristics and usability, aligning them with HS Code 080280. (iii) Tariff Structure Comparison: Sr. No CTH BCD as per tariff Effective rate of BCD IGST Policy as on date 1 080280 100% 100% 5% Prohibited but free if CIF Value is Rs.351/- or above per Kg Tariff value is US $6552 PMT 2 ....
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....he instant case, the personal hearing could not be conducted as the applicant vide email dated 17.02.2025 informed that the applicant does not want any further personal hearing in the matter. The port authority also not requested for personal hearing in the matter. However, the A.R. of the applicant in his email dated 17.02.2025 submitted additional submission. 4 The additional submission of the A.R. of the applicant, are, as under: i. This has reference to the above mentioned Application for Advance Ruling under Section 28H of the Customs Act, 1962 filed by the applicant Star Enterprises (hereinafter referred to as 'the Applicant') seeking classification under the Customs Tariff Act, 1975, of Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur dioxide or Sodium Benzoate solution or Bordeaux solution, while in storage and for safe transportation, which the Applicant intends to import from overseas. ii. That it is submitted that Areca Nut is a tropical plant found all over South-East Asia. The tree belongs to the palm tree species and is from the Arecaceae family. The fruit of this tree is popularly known as the betel nu....
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....on, the Areca Nuts can be treated with Sodium bi-carbonate and when washed with plain water the excess Benzoic Acid will get removed. In this process, by way of neutralisation and after getting dissolved in water the benzoic acid gets removed. g. In cases where the Areca Nuts is preserved with Sulphur di-oxide, these can be treated with Hydrogen Peroxide by which the Sulphur di-oxide is oxidized to sulphate and during the process addition of sodium bi carbonate and water will remove the excess peroxides. v. It is submitted that after carrying out the above processes for removal of preservatives, the Areca Nuts become suitable for human consumption. Hence, it can be observed that the above preservative treatments are provisional and temporary and the preservative chemicals are required to be removed before the consumption of Areca Nuts. vi. It is submitted that the provisional preserved Areca Nuts should be classifiable under Chapter Heading 0812 of the First Schedule of the Customs Tariff Act, 1975 which includes Fruit and nuts provisionally preserved, but unsuitable in that state for immediate consumption, and more particularly under sub-heading 0812 909....
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....ive solutions), provided they remain unsuitable for immediate consumption in that state." Such provisionally preserved areca nuts are not classifiable under Tariff Heading 0802. The relevant portion of Heading 0802 is as under: 0802 Other nuts, fresh or dried, whether or not shelled or peeled 080880 - Areca nuts: 08028010 ---Whole 08028020 --- split 08028030 --- Ground 08028090 --- Other ix. It is submitted that even though Areca Nut is separately mentioned under Heading 0802, the Areca Nuts covered under sub-heading 08028010 to 08028090 shall only include the ones which are suitable for immediate consumption, even if in whole, cut or split form. These Areca Nuts are edible in nature due to the absence of preservative agents being used thereon. Whereas, the Areca Nuts which are provisionally preserved and are unfit for immediate consumption (not readily edible), are classifiable under Heading 0812 instead of Heading 0802 of the Customs Tariff Act, 1975. Hence, it can be seen that if Areca Nuts are not provisionally preserved and hence are fit for immediate consumption, it would find classification under Heading....
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....g headings of this Chapter. The products of this heading are generally put up in cans, jars or airtight containers, or in casks, barrels or similar containers. Hence, it can be seen that if Areca Nuts are provisionally preserved and hence are unfit for immediate consumption, it would find classification under Heading 0812 and contrary to that if the Areca Nuts are even though subjected to preservation process, but still not rendered unfit for immediate consumption, it would find classification under Heading 2008. Further, the Areca Nuts are intended to be imported packed in bags/sacks and not in cans, jars or airtight containers, or in casks, barrels or similar containers and even for this reason, it would not find classification in Heading 2008. xiii It is submitted that Pan Masala and Betel Nuts/Supari with lime are ready to eat preparations covered in Chapter 21 of the Customs Tariff Act, 1975, whereas Areca Nuts treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, since not suitable for immediate consumption, wherein the identity of Betel Nut (Areca Nut) is not lost or transformed to any edible preparation, is neither ....
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....ruling is extracted as under: "6.4 From the submission of the applicant I find that the subject product is treated with sulphur-dioxide gas or sodium benzoate solution before packing and export for preservation. The said preservatives can be removed before consumption through simple processes, as explained at para 2 above, to make the product suitable for human consumption. It is observed that the subject goods remain unsuitable for immediate consumption in that state and need to be processed further to remove the preservatives to make the same suitable for human consumption. Thus, I find that the conditions of chapter note (4) as mentioned above are duly fulfilled and hence the said goods come within the ambit of Customs Heading 0812. Therefore, in view of the submissions made by the applicant, relevant legal provisions and the above discussions, I have reached a conclusion in the matter in respect of the questions asked in the CAAR- 1 application." It is submitted that the fruits and Nuts in general have a shorter life span and post-harvest they are preserved using preservatives like Benzoic Acid or Sulphur-di-Oxide gas which are basically used for inhibiting th....
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....to decide the present application regarding classification of Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) on the basis of the information on record as well as the existing legal framework having bearing on the classification of the Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) under the first schedule of the Customs Tariff Act, 1975. 5.2. Chapter 8 covers fruit, nuts and peel of citrus fruit or melons (including watermelons), generally intended for human consumption (whether as presented or after processing). As per HSN explanatory notes, goods under Chapter 8 may be fresh (including chilled), frozen (whether or not previously cooked by steaming or boiling in water or containing added sweetening matter) or dried (including dehydrated, evaporated or freeze-dried); provided they are unsuitable for immediate consumption in that state they may be provisionally preserved (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions). 5.3. Chapter 8 under the Customs tariff Act 1975 covers Edible fruit and nuts; peel of citrus fruit or melons and note (3) to chapter ....
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....in that state. Though areca nuts are separately mentioned under 0802, nuts provisionally preserved but unsuitable in that state for immediate consumption, as the areca nuts in the present case, will get covered under Heading 0812 which occurs later in the schedule and accordingly, the nuts that are provisionally preserved and not fit for immediate consumption need to be classified more specifically under the CTH 08129090. 5.6. Further, reliance has also been placed upon on the following rulings -: i. Ruling No. CAAR/Mum/ARC/42/2023 dated 15.05.2023 of Hon'ble Authority passed in the matter of M/s. Hi Tech Prints Systems, Chennai Vs. The Commissioner of Customs (Import), Tuticorin, where identical goods are held classifiable under 0812 90 90. ii. Ruling No. CAAR/Mum/ARC/26/2024 dated 22.02.2024 of Hon'ble Authority passed in the matter of M/s. Radiance Enterprises, Chennai Vs. The Commissioner of Customs II (Import), Chennai and The Commissioner of Customs, Tuticorin, where identical goods are held classifiable under 0812 90 90. 6. It is pertinent to mention that, as per Notification No. 01/2021 - Customs (N.T.) dated 04.01.2021 (As amended vide Notification ....