TaxTMI 
TaxTMI 
2025 (2) TMI 1364
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 whethe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uman 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay 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 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ESTIONS(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 dri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assification 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. ICD, TKD (Import), New Delhi and requested to furnish CUS the requisite comment in the instant matter. The port authority vide letter dated 31.01.2025 furnished the requisite comments in the matter, wherein the port authority has requested for not 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 In this regard, this is to submit that the following counter-reply is being furnished challenging the applicant's claim that "Provisionally Preserved Areca Nuts (Whole and Split)" should be classified under CTH 0812 90 90. Based on detailed reasoning and analysis of the relevant provisions of the Customs Tariff Act, 1975, as brought out in the following pars, the product in question should merit classification under CTH 0802 2.1.1. Classification Framework for Areca Nuts (Betel Nuts) The Customs Tariff Act provides clear guidelines for the classi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are not uncommon in the areca nut industry and do not render the nuts unsuitable for consumption but ensure safe storage during transit. Thus, Chapter Notes 3 and 4 do not support the applicant's argument for reclassification under CTH 0812. 2.2. Judicial Precedents Favoring Classification Under CTH 0802 The applicant cites rulings like CAAR/Mum/ARC/42/2023 and others to substantiate classification under CTH 0812. However, the facts and context of these rulings differ significantly from the present case. Instead, precedence exists for areca nuts being classified under CTH 0802, where the product retains its primary identity as areca nuts despite minor processing. Specific rulings and Explanatory Notes to the Harmonized System (HS) emphasize that products explicitly covered under a particular heading (such as 0802 for areca nuts) cannot be shifted to broader or general headings like 0812 unless substantial transformation has occurred. 2.3. Application of Rule 1 of the General Interpretative Rules (GIR) As per Rule 1 of the GIR, classification is determined by the terms of the headings and relevant Section or Chapter Notes. Heading 0802 explicitly covers areca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder CTH 0802. The scientific analysis provided by these agencies will be instrumental in confirming the product's characteristics and the applicability of the relevant tariff headings, ensuring an informed and accurate classification. 2.6 Prayer In view of the above submissions, it is most respectfully prayed that the Hon'ble Authority may kindly: 1. Determine the Appropriate Classification Declare the correct classification of "Provisionally Preserved Areca Nuts (Whole)" and "Provisionally Preserved Areca Nuts (Split)" under Customs Tariff Heading 0802 instead of CTH 0812 90 90, as the product's essential characteristics and preservation processes align more closely with the scope and description of CTH 0802. 2. Mandate Testing for Objective Analysis Direct that the product be tested by competent authorities such as the Central Revenue Control Laboratory (CRCL) and the Food Safety and Standards Authority of India (FSSAI) to ascertain: The impact of the preservation process on the product's suitability for immediate consumption. Whether the product retains its essential characteristics of areca nuts as defined un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for immediate consumption in that state. iv. It is submitted that for preservation of the Areca Nuts and to protect them from fungi and moulds and to prevent degradation while in storage and for safe transportation, these are to be subjected to preservative treatment before packing and export thereof. The preservatives used on Areca Nuts are the following: a. Treating with lime or slacked lime, which is an excellent naturally occurring antibacterial material. It improves the absorption of the alkaloid stimulants of the Areca Nut into the bloodstream; or b. Treating with 1% Bordeaux solution, which is a simple mixture of copper sulphate (1part) + Lime (I-part) with water (100-parts) with neutral pH, and is an excellent antifungal and anti-bacterial solution to preserve from fungus and bacteria while in storage. It is sprayed on the Areca Nut during the drying process; or c. Treatment with Sulphur di-oxide or Sodium Benzoate solution having antibacterial and antifungal properties. d. The preservatives can be removed before use of the Areca Nuts through simple processes. In case of treatment with lime or slacked lime, the traces thereof on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hapter 8 of the Customs Tariff Act, 1975 is as under: "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.', The relevant portion of HSN Explanatory notes of the Chapter 8 to the Customs Tariff Act, 1975 is reproduced as under: "Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. It should be noted that homogenisation, by itself, does not qualify a product of this Chapter for classification as a preparation of Chapter 20." viii. It is submitted that Heading 0812 of the First Schedule of the Customs Tariff Act, 1975 covers fruits and nuts provisionally preserved but unsuitable in that state for immediate consumption. Following are the four sub-headings under the Heading 0812: 0812 10 00 - Cherries 0812 90 - Other: 0812 90 10 Mango slices in brine 0812 90 90 Other The Note appearing belo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng fit for human consumption and hence requiring additional processes to be carried out thereon to remove the preservatives before making the product suitable for human consumption however, the products covered under Heading 2008 are edible and are fit for immediate human consumption as such even though subjected to preservation process. xii. It is submitted that Preservation processes with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution make the Areca Nut non-edible or unfit for immediate consumption in such preserved condition, and moreover these processes are not covered under Chapter 7, 8 or 11 of the Tariff. The Note 1 (a) to Chapter 20 of the Customs Tariff Act, 1975 is reproduced as under: "1 - This Chapter does not cover: (a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11;" The relevant portion of Heading 2008 is as under: 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. 20081930 Other nuts, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Chapter 21 of the Customs Tariff Act, 1975 is as under: 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. xiv. It is submitted that it can be seen from the above that only preparations containing Betel Nuts or products of Betel Nuts are classifiable under Heading 2106. Since the Applicant intends to import provisionally preserved Areca Nuts in its original form which are to be used as starting material for manufacture of 'Pan Masala' or 'Supri' and not being preparation or product of 'Betel Nuts' would not find classification therein. The slacked lime powder or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution sprayed on the original form of Areca Nuts either in whole or split form, is only for the purpose of provisional preservation during storage and transport, and not with the intention to make Pan Masala or Supari preparation. xv. Moreover, such preservative chemicals are required to be removed by si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2024 dated 22.02.2024, and Ruling No. CAAR/DelNaibhav/19/2024 dated 27.05.2024 in the matter of Vaibhav Enterprises, which decides the classification of 'Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution' under Tariff Item 08129090 of the First Schedule of the Customs Tariff Act, 1975. In view of the foregoing submissions, it is humbly submitted that the product, 'Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution' imported from Indonesia would be classifiable under Chapter Heading 0812 and more specifically under sub-heading 08129090 of the First Schedule of the Customs Tariff Act, 1975. It is humbly prayed that the applicant do not want any further personal hearing in this matter and most humbly prayed that this Hon'ble Advance Ruling Authority may kindly take the aforesaid additional submissions on record along with the Advance Ruling passed by the Authority of Advance Ruling New Delhi and Mumbai, into consideration while passing orders in the interest of justice. Findin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the goods under CTH 0802 is masticatory. 5.4. However, I find that the provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter Heading 0812 due to following Chapter Note. The Chapter note (4) reads as follow -: "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." Following are the four sub-headings under CTH 0812 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 In view of the process carried out by the applicant reproduced in para 1.9 and para 4(e) supra, 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. 5.5. The Heading 0812 applies to fru....