TaxTMI 
TaxTMI 
2025 (1) TMI 1765
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....That the applicant, M/s AKAM IMPEX, New Delhi is a Hindu Undivided Family firm managed by Mr. Kunal Kamra. The firm is duly registered with the respective statutory authorities viz. G.S.T. Department, Income Tax Department, DGFT Department, New Delhi etc. The Importer Exporter Code of the firm is AAOHK5748P and the GST number of the applicant is 07AAOHK5748P1ZA. 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 & 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 the goods being import....
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....egards 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 of dried fruit or dried....
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.... 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) to chapter 8 reads as....
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....NCE 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 dried nuts of this Chapter ....
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....d 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 the requisite comment in the instant matter. The port authority vide letter dated 03.01.2025 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 of this office with regard to points raised in your letter instant are furnished as under: Para 5: i. No comments as provisions quoted. ii. The item described as "Provisionally preserved Areca nuts" are freely importable if the unit price of the goods is more than Rs.351/kg and classifiable under CTH 080280. iii. The question of classification of proposed import item "Provisionally preserved areca nut" is not pending before any adjudicating authority. Tribunal or Court as per available records. Para 6: Comments to points ra....
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....ain unsuitable for immediate consumption in that state. 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. 2.2 As per the above HSN explanatory notes, the chapter heading 0812 covers fruits and nuts, which require special treatment for provisional preservation for use in particular food industry. Such provisional preservation is only need based and applicable to goods prone to deterioration. This position is supported by the HSN notes, which exemplifies the commodities requiring such preservation. The applicant has submitted that before treatment with Sulphur dioxide, the fresh de-husked & peeled areca nuts are heat treated and dried. The Areca Nuts in the present case, having been already heat treated and dried, would not require any provisional preservation for transport and storage. These products have shelf life at normal room temperature and hence, clearly excluded from scope of the chapter heading 0812 and rightly classifiable....
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....ove mentioned Application for Advance Ruling under Section 28H of Applicant') the Customs Act, 1962 filed by the applicant AKAM IMPLEX (hereinafter referred to as 'the seeking classification under the Customs Tariff Act, 1975, of Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur di-oxide 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 nut or 'supari' in India. Betel Nut is the kernel obtained from the fruit of Areca Nut palm. The Areca Nut is an important commercial plantation crop. It is mostly used as masticatory. It is important to note that even the Explanatory Note to the Customs Tariff uses the term 'Areca Nut' or 'Betel Nut' interchangeably; iii. It is submitted that the Applicant intends to import Areca Nuts (Whole & Half Split/Cut form) provisionally preserved and treated/sprayed with s....
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....d 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 9090, which would cover Areca Nuts that are provisionally preserved during transport or storage prior and not suitable for immediate consumption in that state. vii. It is submitted that Chapter 8 of the Customs Tariff Act, 1975 covers edible fruit and nuts, peel of citrus fruits or melons. Chapter Note 3 to Chapter 8 ibid reads as follows: "3. Dried fruit, or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes: ....
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.... 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 0802 and contrary to that if the Areca Nuts are provisionally preserved due to which it is not fit for immediate consumption, it would find classification under Heading 0812. x. It is submitted that the product, Areca Nuts (Whole & Half Split/Cut form) provisionally preserved and treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, cannot be classified under Chapter 20 of the Customs Tarif....
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....ate 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 'Pan Masala' nor 'betel nut product known as Supari' as described in Supplementary Note 1 and 2 to Chapter 21 of the Customs Tariff. Therefore, Areca Nuts treated/sprayed with slacked lime or Sulphur dioxide or Sodium Benzoate solution or Bordeaux solution, shall not find classification under Chapter 21 of the Customs Tariff Act, 1975. The relevant portion of Heading 2106 is as under: 2106 --- Food preparations not elsewhere specified or in....
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....n 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 the growth of moulds and bacteria. The preservation process is done to ensure the fruits and nuts are not spoiled during transportation. These preserved products might have higher levels of S02 or Benzoic acid And they can be safely treated with Sodium Bi Carbonate (NaHC03) and washed with plain water to remove the excess of Benzoic Acid, Benzoic acid gets neutralized to Sodium Benzoate in the process easily get dissolved in wa....
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.... 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 8 provided as: "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 ....
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....090. 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 No. 63/2022-Customs (N.T.) dated 20.07.2022)1 Subs. by reg. 12, ibid., for "under this rule" (w.e.f. 25.07.2022): "26. Declaration of advance ruling to be void in certain circumstances. - (1) Where it is brought to the notice of the Authority on a representation made by the Principal Commissioner or Commissioner concerned or otherwise that an advance ruling pronounced by it has been obtained by the a....