TaxTMI 
TaxTMI 
2025 (2) TMI 1365
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....pplicant 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 whether....
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....man 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 character ....
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....y 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 note (3....
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....STIONS(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 or drie....
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....ssification 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. Customs, GT Road, Sahnewal, Ludhiana and requested to furnish the requisite comment in the instant matter. The port authority vide e-mail dated 11.02.2025 furnished the requisite comments in the matter, wherein the port authority has requested for classification of the goods in question under CTH 080280 in the instant matter. The comments of the port authority in the instant matter, are under: 2.1 The applicant. M/s. Star Enterprises is seeking advance ruling from CAAR, Delhi on the questions of classification of imported goods namely, "Provisionally preserved Areca Nuts (whole) and Provisionally Preserved Areca Nut (Split)" under the HS Code 0812 9090. The Importer has put forth a series of arguments/judgements/rulings in favor of classifying the Provisionally preserved Areca Nuts (split/whole) under HS Code 0812 9090. The importer has delineated the following process that are purportedly conducted on the proposed import item: PROCESS-FLOW i. After ha....
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....ring, the addition of sorbic acid or potassium sorbate); (b) to improve or maintain their appearance (nor 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. 4. Heading 0812 applies to fruit and nuts which have been treated solely to ensure their provisional preservation during transport or storage prior to use (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), provided they remain unsuitable for immediate consumption in that state. 2.5. (ii). It is crucial to note that the item "Areca Nut/Betel Nut is specifically and unambiguously covered under CTSH-0802 80 of the First Schedule of the Customs Tariff Act, 1975. The chapter heading 0802 provides a clear and comprehensive description, which reads as "Other nuts, fresh or dried, whether or not shelled or peeled". This explicit inclusion undeniably encompasses Areca nuts in their preserved form, regardless of whether they have been shelled or peeled or whole/split under the chapter heading 0802. The relevant chapter heading is reiterated as under: 08.02 ....
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....DE GAS, IN BRINE, IN SULPHUR WATER OR IN OTHER PRESERVATIVE OLUTIONS), BUT UNSUITABLE IN THAT STATE FOR IMMEDIATE CONSUMPTION. 0812.10 - Cherries 0812.90 - Other Provided they remain unsuitable for immediate consumption in that state, this heading applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation during transport or storage prior to use (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions). Such products are used mainly in the food industry (manufacture of jam, preparation of candied fruits, etc.). The products most commonly presented in this state are cherries, strawberries, oranges, citrons. apricots and greengages. They are usually packed in casks, trays or open-lath type containers. 2.5. (iv). From the plain reading of the definition above imply that to classify the product in 0812 it must be unsuitable for immediate consumption in their preserved state. This category includes fruits and nuts like cherries and strawberries, which require preservation due to their short shelf life and perishable nature. Additionally, ....
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....h the same was not provisioned in the Tariff, appears to be a calculated attempt to artificially situate the goods under CTH 0812. 2.5 (ix). The implications of this misclassification extend beyond mere taxonomic concerns and delve into significant regulatory and economic considerations. It is crucial to note that the import of goods classified as "Areca nuts (Whole/cut/split)" under Chapter Heading 080280 is subject to stringent regulations: As per DGFT Notification No. 57/2015-2020 dated 14.02.2023, the import of Areca Nuts is prohibited if the unit price falls below the-Minimum Import Price (MIP) of Rs. 351/ per Kg. This MIP serves as a protective measure for domestic producers and helps maintain price stability in the market. The relevant portion of the said notification is reproduced below: ITC (HS) Codes Description Existing Import Policy Revised Import Policy Existing Policy Condition Revised Condition Policy 08028010 -Areca nuts -- Whole Prohibited Prohibited However, import is free if CIF value is Rs. 251/- and above per Kilogram a) However, import is per Free if CIF value is Rs. 351/- or above Kilogram. b) MIP conditions, ho....
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....seeking classification under a different heading, the applicant appears to be attempting to evade the minimum import price requirement, circumvent the tariff values, and potentially legalize Areca Nuts imports through mis-declaration of the goods as "Provisionally preserved Areca Nuts (Whole/cut/split)". 2.5.(xi). It is further submitted that the intent of the Government behind imposing MIP Condition is to regulate the Import of sub-standard Areca Nuts and to assist the Local Areca Nut farmers. Whereas some unscrupulous Importers appears to have been attempting to Import the Areca Nuts under the guise of Provisionally preserved Areca Nuts (Whole/cut/split) by circumventing the MIP as goods i.e Areca Nuts were subject to MIP. 2.5 (xii). In light of the comprehensive analysis presented above, and in strict adherence to Rule 1 of the General Rules for the Interpretation of the Harmonized System, which unequivocally states that "classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes, it can be determined that the appropriate classification for the subject goods is under CTH 0802 80 and specifically under CTH 0802 8010 w....
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.... the above facts and the precedent set by the Hon'ble Supreme Court in the case of S. Krishna & Co. v. Commissioner, reported in 2015 (321) E.E.T. 530 (Tri. Kolkata), the advance ruling may be decided accordingly. Records of the personal hearing in the matter: - 3. In the instant case, the personal hearing could not be conducted as the applicant vide email dated 13.02.2025 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 13.02.2025 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 A....
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....atment (thorough washing). e. In case of treatment with 1% Bordeaux solution, the Areca Nuts can be made suitable for human consumption by subjecting it to water treatment (thorough washing). f. In case of preservation carried out with Sodium Benzoate solution, 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 preserve....
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.... "This heading applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation during transport or storage prior to (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative 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....
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....earing below the Heading 2008 states that this heading covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in preceding 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, wher....
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....m bi-carbonate or Hydrogen Peroxide, before actual consumption of such provisionally preserved areca nuts into its edible form/preparation. Reliance is placed on ruling in the matter of Hi-Tech Print Systems - Ruling No. CAAR/Mum/ARC/42/2023. The relevant portion of the said 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....
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....aken into consideration of all the materials placed on record in respect of the subject goods including the rebuttal & additional submissions made by the applicant vide e-mail dated 13.02.2025. I have gone through the response from the Customs Port Commissionerate. I proceed 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 tha....
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....d) which have been treated solely to ensure their provisional preservation during transport or storage prior to use (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), provided they remain unsuitable for immediate consumption 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 Commission....