TaxTMI 
TaxTMI 
2025 (1) TMI 1764
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....of Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) from Myanmar (Burma), Indonesia, Sri Lanka, Cambodia, Thailand and Singapore etc. 1.1. The applicant submitted as under: i. That the applicant, M/s SHRI RAM OVERSEAS, Rajasthan is a proprietorship firm of Mr. SHRI RAM. The firm is duly registered with the respective statutory authorities viz. GST Department, Income Tax Department and DGFT Department, Rajasthan. The Importer Exporter Code of the firm is GMVPS3147B and the GST number of the applicant is 08GMVPS3147B1ZL. The applicant is in the process of setting up its business of Import of Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) from Burma (Myanmar), Indonesia, Sri Lanka, Thailand, UAE, Singapore etc. ii. That the applicant is approaching this Hon'ble Authority, seeking advance ruling qua the goods as mentioned in the following paras as applicant intends to import the same and hence would like to have a proper understanding and clarification as to whether the goods being ported shall be covered under a particular classification or the other. The nomenclature and details of the goods be....
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.... specifically covered under Chapter Heading 2008. That the CTH headings describe as bellow: CTH 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 & CTH 2008 19 20 - Other Roasted Nuts and seeds. vii. That as per the Explanatory Notes to Chapter 8, fruits and nuts of this Chapter remain classified here even if put up in airtight packing (e.g. dried prunes, dried nuts in cans). In most cases, however, products put up in these packing have been prepared or preserved otherwise than as provided for in the headings of this Chapter, and are therefore excluded from chapter 8 (and will fall under Chapter 20). viii. The processes mentioned in Chapter 8 are different from the processes performed on impugned goods; they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as "Tariff"). Further HSN explanatory note qua Chapter 20 explains as below: Chapter 20 This Chapter includes: (1) Vegetabl....
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....08.2023 respectively before the Hon'ble Madras High Court, wherein the Division Bench of Hon'ble Madras High Court after elaborately hearing all the parties dismissed the CMA's of the Customs Department, thereby upholding the aforesaid ruling of the CAAR, Mumbai. xi. That Ruling No. CAAR/Del/Shree Durga/26, 27 & 28/2023 dated 17.11.2023 of Hon'ble Authority passed in the matter of M/s. Shree Durga Traders, Kolkata Vs the Commissioner of Customs (Preventive) Kolkata, The Principal Commissioner of Customs, Chennai II (Import) & The Principal Commissioner of Customs Nagpur in Application No. 22, 23 & 24/2023-DELHI O/o Commr-CAAR-NEW DELHI, where identical goods are held classifiable under 20081920. xii. That Ruling No. CAAR/Mum/ARC/67/2023 dated 16.10.2023 of Hon'ble Authority passed in the matter of M/s. Shree Ganesh Traders, Chennai Vs. The Commissioner of Customs II (Import), Chennai, in Application No. CAAR/ CUS/APPL/95/2023-0/0 Commr-CAAR-MUMBAI, where identical goods are held classifiable under 20081920. xiii. That the process of roasting thus changes the chemical and physical characteristics of the areca nut by reducing arecoline a....
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.... fruit, nuts and other edible parts of plants prepared or preserved by other processes not provided for in Chapter 7, 8 or 11 or elsewhere in the Nomenclature. ... It includes, inter alia: i. Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. f. That so far as the goods sought to be classified i.e. roasted areca nut these goods is chewed for a variety of reasons such as stress reliever, mouth freshener, concentration improver and digestive following food intake. g. The subject goods are specifically covered and are classifiable under CTH 2008 19 20 of the Customs Tariff Act, 1975. As per the HSN Explanatory Notes to Heading 2008, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. h. CHANGE IN THE BETAL NUT BY THE PROCESS OF ROASTING: With regard to the goods in question it is submitted that during the process of roasting, the roasting is done using firewood / palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius a....
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.... a preparation and hence these goods clearly fall under the chapter heading 21 and more particularly CTH 2106 90 30 as stated and not under Chapter 8 of Customs Tariff and more particularly CTH 08029000 which is for the product namely Areca nut. o. That in fact for similar product, Hon'ble CAAR Mumbai has already issued a Ruling thereby declaring the above said goods falls under CTH 20 and particularly under CTH 200819 20 and not under CTH 8. The said ruling has been given in the case of in Ruling dated 07.12.2022 no. CAAR/Mum/ARC/44, 45 & 46/ 2022 in Application no. AAR/Cus/APPL/70,77 & 78/2022 - 0/o Commr-CAAR- Mumbai (Applicant-M/s Shahnaz Commodities International, Chennai) p. Further, in fact, the customs authority challenged the said Advance Ruling before the Hon'ble High Court of Madras vide CMA No. 600, 1206 and 1750 of 2023 - The Commissioner of Customs Chennai Vs. M/s Shahnaz Commodities International P. Ltd. However, the said case was rejected by the Hon'ble High Court vide its judgment dated 01.08.2023. q. The Hon'ble High Court has after considering all the other chapter including chapter 08, and chapter 21 of Customs Tariff a....
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....e requisite comments in the instant matter. However, unfortunately, the response from the Customs Port Commissionerate, has not been received in spite of multiple reminders 3. The instant applicant had filed three applications pertaining to different Customs ports on the same issue and same goods for seeking of Rulings. The requisite comments from the Customs port Commissionerate of Tuticorin, Tamil Nadu received first and accordingly, personal hearing was conducted and rulings was pronounced. Comments in respect of Customs port Jaipur & Customs port Ludhiana is still awaited. The Custom Port Commissionerate, New Central Revenue Building Statute, Circle "C' Scheme, Jaipur-302005 was also asked to provide the requisite comments, as the matter, under consideration, was same, in filed all three applications. However, the Customs Port Commissionerate did not provide any comments in the matter. In this situation, the authority is constrained to proceed to pronounce ex-parte Rulings in view of the provisions of the CAAR Regulation 2021 in order to stick to the 90 days mandatory timeline given under the Act & Rules. Records of the personal hearing in the matter: - 4 "As per t....
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....mentioned under Chapter Note 3 of Chapter 8 which examined as under and found that the term "Moderate heat Treatment" moisture content in 'Raw areca nut' is anywhere between 10% to 15%. After, the process of drying the moisture content is reduced to a maximum of 6% to 7% and any amount of drying or moderate heat treatment cannot remove the moisture content below the said level of 6%. iii. Further, only by the process of roasting, by use of roasting ovens / furnace, the moisture content in "Roasted Areca Nut" is brought below 4% by process of competing of multiple cycle of heating and cooling of the nuts at room temperature. The roasting of the nuts also made it crispy by changing its internal structure as well as chemical changing of the ingredients of the nuts by reducing of arcoline by homarcoline. iv. That the process is not uncontrolled repeat roasting. The process is controlled to the extent of converting "Raw Areca Nut" to "Roasted Areca Nut" of given standard. The process is controlled as to not resulting in overcooking which would spoil the product. v. All imports are tested for FSSAI standards before clearance of home consumption and the ....
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....at "the commonly accepted sense of a term should prevail in construing the description of an article of food In common trade parlance, "drying is a method of food preservation by the removal of water content. On the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process completed in multiple cycles of process of heating and cooling. ix. That on examining the scope of CTH 2008 it is found that, as per HSN Explanatory Notes, heading 2008 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 the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat- roasted....
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.... can be attached to it. xii. That the vital question as to whether roasted nuts would fall under Chapter 0802 or Chapter 2008 was affirmatively answered in favour of Chapter 2008 by the decision of Hon'ble Supreme Court in the case of Commissioner of Customs . & Central Excise, Goa vs Phil Corporation Ltd. reported in 2008 (223).EL.T9/S.C. Hence, the settled position of law is that nuts falling under Chapter 08 would be classified under Chapter 20, if the same is subjected to the process of roasting. xiii. That the classification as far as possible must be in conformity and in consonance with the HSN explanatory Notes. The law says that whenever there is specific entry, the same would prevail over general entry; the said general principal is statutorily incorporated in General Rules of Interpretation, in particular, under Rule 3(a) of the General Rules of Interpretation. CTH 2008 1920 is a special entry covering nuts subject to the process of roasting when contrasted with CTH 08 02 90 which covers dried nuts. Having come to the conclusion that the classification of areca nuts is made on the basis of the process which it is subject to with a distinction between....
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....understanding of various tariff entries in the Tariff. The legal framework mentioned above has to be factored in while deciding classification of roasted arena nut which is proposed to be imported by the applicant. xvii. That the judgement of M/s Crane Betel nut judgment of the apex court cannot be applicable in case of present application due to legislative change in the Central Excise Tariff subsequent to M/s Crane Betel nut Powder Work's judgment, and for deciding the classification under chapter 20 as the legal dispute in that case involved a classification of variants of betel nut between chapters 8 and 21, and also due to availability of commodity specific SC judgments (1) Amrit Agro Industries Ltd. & Anr. v. Commissioner of Central Excise, Ghaziabad (2007) 201 ELT 183 (SC), and Commissioner of Customs & Central Excise vs Phil Corporation Ltd in Appeal (civil) 2215 of 2002 dated 07/02/2008 on the classification of roasted nuts under chapter 20 of Central Excise Tariff Act. xviii. That as per General Rules of Interpretation (GIR) 3(a) of the Customs Tariff Act 1975, when by application of GIR 2(b) or for any other reason, the goods are prime facie, classi....
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....adu. As no comments have been received from the Customs Port Commissionerate of ICD-GRFL Complex, GT Road, Sahnewal, Ludhiana, I proceed to decide the present application regarding classification of Roasted Areca nut (whole), Roasted Areca nut (cut) and Roasted 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 Roasted Areca nut (whole), Roasted Areca nut (split) and Roasted Areca nut (cut), under the first schedule of the Customs Tariff Act, 1975. 6.1 "As per the sub-rule 19 of the CAAR Regulation 2021 as provided under 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, Hearing of application ex parte. - Where on the day fixed for hearing or any other day to which the case is adjourned, the applicant or the Principal Commissioner or Commissioner does not appear in person or through an authorised representative when the application is called for hearing, the Authority may dispose of the application ex parte on merit: Provided that where an application has been disposed of 1[under this regulat....
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....nd milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Heading 2008 covers fruits, 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. Roasting is a process used for bringing in to existence roasted nuts and I find that the processes mentioned in chapter 8 do not cover roasting process. 6.4. I also note on the submissions of the applicant that the Note 3 to Chapter 8 specifies certain treatments that could be carried out on the dried nuts for additional preservation or stabilization or to improve or maintain their appearance. The applicant in their application has declared that the objectives of the roasting are not as specified in the said note. Further, as per the above note, the processes that could be carried out are moderate heat treatment, sulphuring, and the addition of sorbic acid or potassium sorbate by the addition of vegetable oil or small quantities of glucose syrup. Roasting is different from all the process....
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.... in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act." 6.7. Further, in the CAAR, Mumbai Ruling No. CAAR/Mumbai/ARC/39,40,41/2023 in the case of M/s. Universal Impex, the Authority has stated his findings and has ruled accordingly-"in view of the specific CTH 2008 19 20: Other roasted nuts & seeds in chapter 20 of the first schedule to the Customs Tariff, HSN Explanatory note to CTH 2008, various Supreme Court rulings upholding guiding value of the HSN Explanatory notes for deciding classification under Customs Tariff Act, 1975 and previously mentioned two Supreme Court judgments classifying roasted nuts which include almonds, betel nut and other nuts under chapter 20 by taking recourse to HSN explanatory note to Tariff Heading 2008", I rule that roasted betel nuts are correctly classifiable under the tariff item 2008 19 20 of chapter 20 of the first schedule of the Customs Tariff Act, 1975." 6.8. Also, the Hon'ble High Court of Madras in its recent judgement on Civil Miscellaneous Appeal (CMA) No's 600/2023, No. 1206/2023 and No. 1750/2023, dated 01.08.....