TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1598
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....ed enclosed with Advance Ruling application: 2.1 Since the process of "Roasting" is not specifically defined in the Customs Tariff Act nor in the HSN Explanatory Notes or in its Chapter Notes, clarification is being sought from this Advance Ruling Authority. The Applicant states that the cultivation, harvesting and processing of the Roasted Areca Nut has undergone tremendous transformation, such that the involvement of labour and their dependency has reduced; by bringing about mechanization, which invariably increases the efficiency, reduces the wastage, enhances the quality and brings about uniformity in the final product. Further, the preparation time of "roasted Areca Nut" has also drastically reduced, in comparison with the manual method of preparation. 2.2 The raw/fresh areca nut undergoes various process of preparation for roasting, which are detailed below: Firstly, the raw Areca Nut is de-husked and its outer shell is removed. Thereafter the de-husked nut is scattered to check for any visible impurities and the same is cleaned, pursuant to which the raw de-husked areca nut/betel nut is left to dry. Secondly, the cleared and dried de-husked areca nuts....
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....ca nuts and decreases significantly with increasing maturity. iv. Roasting is not aimed at additional preservation or stabilization or to improve or maintain its appearance. Therefore, roasted areca nut is a distinctive product, more specifically classifiable under Chapter 20 of the Customs Tariff Act 1975 and Chapter Notes in HSN. v. Roasted Areca Nut without the addition of any ingredients added to it is saleable in the Indian market in various forms like tukda (pieces) roasted betel nut as well as shredded roasted betel nut. These roasted betel nut products are sold in the market without any additives or without subjecting to any other preparation than the roasting process. These roasted betel nut variants are approved by government agency viz. FSSAI. vi. The "Roasted Areca Nut" is edible in its actual form and suitable for immediate consumption. It is masticatory and used for a variety of reasons such as stress reliever, mouth freshener, concentration improver and digestive following food intake. 3. The statement containing the applicant's interpretation of law/and or facts in respect of the issue on which the advance ruling is sought is reprod....
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....f the main use of the goods under consideration is masticatory. Even though, the impugned goods satisfy this Note, the process of roasting is not finding mention anywhere in this Explanatory Note. Further, the roasted betel nuts - whole or cut - are fit for immediate human consumption without addition of any other ingredient, as is evident from the FSSAI approved product / samples available in the market. The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. There is a wide distinction between the processes of drying and roasting. When the terms have not been defined in the Customs Tariff Act, 1975, then in such instances these terms have to be understood in a commonly accepted parlance as held in the case of Alladi Venkateswarlu Vs Government of Andra Pradesh reported as 1978 AIR 945, wherein the Apex Court held that "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. On the other hand, Roasting means use of excess or ver....
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....nd other nuts, dry-roasted, oil-roasted or fat- roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives." From the above observation it is evident that the "roasted areca / betel nuts", finds specific reference in the Chapter 20 of the Schedule I of the Customs Tariff Act 1975 as well as corresponding HS Explanatory Note. Moreover, from the above explanatory note, it is clear that the process of roasting is not specifically mentioned as a process of preservation or stabilisation or a process to improve or maintain the appearance. Therefore, the process of roasting is not covered by Note 3 to Chapter 8, as such "roasted betel nuts" whole or cut pieces are not classifiable under Chapter 8 of the Tariff. Further, the term "roasted betel nuts", are packaged, labelled and marketed for sale as roasted betel nuts on various online portals like Amazon, India Mart, Flipkart etc. This clearly indicates that the goods have both buyers and sellers and that they are known in the trade and sold in the market as "roasted betel nuts". Therefore, even if the term is not defined in the statute, the product needs to be recognized in terms of commo....
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....f roasting cannot be covered under Chapter 8 of CTH. Roasting is the essential process for the preparation of impugned goods. In the HSN Explanatory Note to Chapter Heading 2008, a reference to "dry-roasted, oil-roasted or fat- roasted" indicates the principal processes of preparation that would change the classification of nuts from Chapter 8 to Chapter 20. CTH 2106: Heading 2106 covers food preparations not elsewhere specified or included. Those food preparations not specified or included elsewhere in the tariff being preparations for human consumption are to be classified under this heading. In this Chapter it. is observed that it includes within its ambit, miscellaneous edible preparations. As per Explanatory Note 2 to Chapter 21, "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. As per the Explanatory Note, the heading covers preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for ....
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....e processes performed on impugned goods, as such they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975. The Applicant states that the process of roasting changes the chemical and physical characteristics of areca nut reducing arecoline and tannin content as well as colour and moisture. As such, the impugned product "Roasted Areca / Betel Nut" does not fall under Chapter 8 of the Tariff. Further, the judgments passed in the case of M/s. Crane Betelnut Powder Works Vs Commissioner of Customs & C. EX, Thirupathi reported as 2007 (210) E.L.T 171 (S.C) and the Advance Ruling passed in the matter of M/s. Excellent Betel Nut Products in pursuance of amendment to the Central Excise Tariff Act, 1985 vide The Finance (No.2) Act, 2009 (Act No. 33 of 2009 dated 19th August 2009), will have no bearing in the instant case for the reason that this Advance Ruling Authority on the similar question of Classification of "Roasted Areca Nut and Roasted Areca Nut Cut" has categorically differentiated the process and preparation of "Roasted Areca Nut" from Chapters 08 and 21 of the CTH and has opined and ruled that Chapter 2008 19 20, is the appropriate cla....
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....plicant contends that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here it is important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat-roasting referred in chapter 20. The terms dry-roasting, oil roasting and fat-roasting however are not defined in the Customs Tariff Act. 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that: "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 moistur....
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....is a well-known commodity in the trade parlance and it has distinct character. 6.4. I have examined the scope of CTH 2008 and I find 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, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. Dry-roasting, oil-roasting & fat-roasting, as a process, are very much a part of chapter heading 2008 by virtue of HSN Explanatory Notes and none of these processes are mentioned in the chapter note 3 to Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802. 6.5 There is considerable force in the argument that the classification as far as possible must be in conformity and in consonance with the HSN Explanatory Notes. It is trite la....
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....ation is concerned, there is a considerable force in the argument that "the department is well equipped to detect any mis-declaration or mis- classification of goods and the commodity imported are subjected to due scrutiny. verification and tests at every level. As such, the general tendency attributable to undervaluation cannot be a yardstick to restrict imports of genuine commodities/goods". 7. It is an established fact that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Tariff Act. The case of Commissioner of Customs & Central Excise vs Phil Corporation Ltd in Appeal (civil) 2215 of 2002 dated 07/02/2008, is directly relevant and applicable in the instant case of the applicant. In the judgement of the said case Honourable Supreme Court has held "a number of cases, this Court has clearly enunciated that HSN is a safe guide for the purpose of deciding issues of classification. In the present case, the HSN Explanatory Notes to Chapter 20 categorically state that the products in question are so included in Chapter 20. The HSN Explanatory Notes to Chapter 20 also categorically state that its products are excluded from C....