TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 1557
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....nt of relevant facts having a bearing on the question(s) on which advance ruling is required with the CAAR-I application: 2.1 The applicant is intending to import the following goods: (a). Oven roasted areca nuts from Burma, Indonesia, Sri Lanka and Thailand. (b). Oven roasted and salted cashew nuts from Vietnam, Thailand and Malaysia The applicant is of the view that the subject goods are classifiable under CTH 2008 19 . 20, and CTH 2008 19 10 respectively. The applicant is of the bonafide belief that the subject goods are rightly classifiable under 2008 19. Therefore, the present application is being filed to ascertain the correct classification for the roasted Areca nuts, under CTH 2008 19 20 and eligibility of the List 5 of Notification No 26/2000-Cus dated 01.03.2000 and SI. No. 172 of Notification No. 46/2011-Cus dated 01.06.2011 for import of roasted Areca nuts. Also, to ascertain the correct classification for the roasted cashew, under CTH 2008 19 20 and eligibility of SI. No. 172 of Notification No. 46/2011 - Cus dated 01.06.2011 for import of roasted and salted cashew nuts. 3. The applicant submitted the following in the statement containing App....
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....fore excluded from chapter 8 (and will fall under Chapter 20). The applicant states that as 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. As per the HSN Explanatory Notes to Heading 2008, given below, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. 3.4 As per Note 2 to Chapter 21 of the Customs Tariff Act, 1975, "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, Kama (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 human consumption. As per the applicant, the goods have undergone roasting, but they don't contain lime, Katha (catechu) and tobacco. Further, roasted betel nuts can be consumed directly by merely cutting them into pieces. Therefore, the good....
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.... 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 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. 3.8 The following CTH can be found to be specifically mentioned in the Tariff: - CTH 2008: 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 - Nuts, ground nuts and other seeds, whether or not mixed together: 2008 19 20 --- Other roasted nuts and seeds. While 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 other....
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....ssifiable under Heading 2008 based on the terms of the Heading 2008 and Notes to Chapter 20. 3.11 Roasted Areca Nuts Import from Sri Lanka is subject to nil rate of Basic Customs Duty in terms of List 5 of Notification No.26/2000-Cus dated 01.03.2000. The said notification was issued by the Ministry of Finance, Government of India in pursuance of the Indo-Sri Lanka Free Trade Agreement (ISFTA). Roasted Areca Nuts Import from Thailand and Indonesia is eligible to avail the benefit of SI. No. 172 of Notification No. 46/2011-Cus dated 01.06.2011. For identical products namely Roasted Areca Nuts, the Hon'ble Authority, Mumbai, vide Ruling Nos. CAAR/MUM/ARC/44, 45 & 46/2022 dated 07.12.2022 which has also been upheld by the Hon'ble High Court of Madras as reported in 2023 (386) E.L.T. 214 (Mad.), vide Ruling Nos. CAAR/Mum/ARC/39,40,41/2023 dated 12.05.2023 and vide Ruling No. CAAR/MUM/ARC/67/2022 dated 16.10.2023 had held that the product is classifiable under CTH 2008 19 20. The said ruling is applicable to the present case also, as the Roasted Areca Nuts are same to the product that was under consideration before the Hon'ble Authority in the above-mentioned Rulings. ....
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....e 'moderate heat treatment' mentioned in Chapter Note 3 of Chapter 8. 4.2.2 The applicant in their application has submitted that raw Areca nut after de-husking were subjected to repeated roasting oven for two to three days for the purpose of reducing water content. Hence, the process mentioned by the importer appear to be only for the purpose of drying and hence roasted Areca nuts intended to import by the importer are rightly classifiable under Chapter 08, specifically under CTH 080280. 4.2.3. The process to which raw betel nuts have been subjected as per process submitted by the applicant is squarely, in the nature of processes referred to in the Chapter Note 3.to Chapter 8 & and HSN Notes. Hence at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as preparations of betel nut which is sine qua non for a good to be classifiable under Chapter 20. To be classified under Chapter 20 there should be some preparation as the Chapter heading reads as "Preparations of vegetables, fruit, nuts or other parts of plants". Mere roasting of betel nut does not render the product to be distinctive as claimed by the a....
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....s of fruits or nuts presented in packaged condition after manufacturing, which need to be specifically stored and preserved before consumption. For example. roasted almonds or ground nuts need separate packings as specified by the HSN explanatory notes, otherwise these products are prone to deterioration after roasting the processes said to be performed on the areca nuts is only for the purpose of drying without any reference to packaging and any specific manufacturing process. The importers have not submitted anything about the packaging of the goods and generally these goods are imported in bulk in jumbo bags. The goods under dispute are Areca Nuts in the same form as those classified under Chapter 08 and hence, they are clearly excluded from the scope of the Chapter Heading 2008. Hence, the purported roasted areca nuts clearly excluded from the scope of the chapter 20 and rightly classifiable under chapter 08. 4.2.6. Further, as per Rule 3(a) of General Rules for the Interpretation of the Harmonised System since the product is more specifically classified under CTH 08020 classification under Chapter 2008 or 2106 is unwarranted. 3. When by application of Rule 2 (b) or....
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....021 in the Civil Appeal nos. 850-851 of 2021. Though, the process dealt with by the Hon'ble Tribunal was not exactly the same the principle involved holds relevance. When the boiled supari can be classified under chapter 08 on the grounds that boiling does not alter the original characteristic of the goods, the same would apply in the present case also as roasting alone would not alter the character of the goods and therefore roasted areca nuts should be classified under chapter 08 even on this principle also. 4.2.9. Several advance ruling applications are filed seeking classification of the roasted/betel nut to avoid classification under Chapter 08 as there is a Minimum Import Price as well as a tariff rate applicable which is regularly revised by CBIC. The current Tariff value of the Areca nuts is USD 6033 Per Metric Ton. These applications are being submitted to circumvent the minimum import price and increasing tariff values by legalizing betel nut import through mis- declaration and misclassification. The CAAR may not entertain such applications considering that several advance rulings have already rejected the classification of betel nut under chapter 21 in the interes....
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....oms on 29.04.2024 which is reproduced hereinabove in para 4 and this office also forwarded the said comments to the applicant on 02.05.2024 for their rebuttal. The department has not made further reply. 6. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have gone through the response received from the Chennai Customs. I therefore proceed to decide the present applications regarding classification of "Oven Roasted Areca Nuts and Oven Roasted and salted Cashew Nuts" on the basis of the information on record as well as the existing legal framework having bearing on the classification of the products in question under the first schedule of the Customs Tariff Act, 1975. 6.1. It can be seen from the wording used, 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 roast....
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....ried 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 processes mentioned above. Even in the generally understood meaning of the terms, it is understood that roasting involves severe heat treatment and is different from moderate heat treatment as well as dehydration. The ratio of Hon'ble Apex Court judgement in the case of Alladi Venkateswarlu v. Government of Andhra (cited supra) regarding differentiating the process of roasting and drying is very much relevant and applicable in this case. 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....
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....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 HISN Explanatory Notes to Chapter 20 categorically state that the products in question are so included in Chapter 20. The HISN Explanatory Notes to Chapter 20 also categorically state that its products are excluded from Chapter 8 as they fall in Chapter 20. In this view of the matter, the classification of the products in question has to be made under Chapter 20." While delivering Phil Corporation Judgment honourable Supreme Court has clearly spelt out importance of HSN Explanatory notes in deciding the matters of classification placing reliance on the judgment of Supreme Court in the case of Collector of Central Excise, Shillong v. Wood Craft Products Ltd. (1995) 3 SCC 454. Honourable Supreme Court in paragraph 12 of the said judgment observed as under: - "Accordingly, for resolving any dispute....
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....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." 10. The Hon'ble High Court of Madras in its judgement dated 01.08.2023 in the case of M/s. Shahnaz Commodities International P. Ltd., M/s. Universal Impex and M/s. Neena Enterprises has upheld the classification of Roasted Betel Nuts under CTH 2008 19 20. The Honourable High Court went on to analyse the various aspects in determining classification and summed up that (a) "Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH; (b) Roasted betel/areca nut having been specifically classified under CTH 2008 19 20, the attempt to classify under CTH 08 02 80 would fall foul of the settled rule of construction that specific entry would prevail over general entry; (c) HSN explanatory notes is normally a safe guide in ....
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....re filing Writ Petition against GOI Order dated 25.08.2009. This office vide letter F. No. 198/69/2004-RA-Cx dated 22.10.2012 specifically asked department to state the present status of the said Writ Petition. The department vide letter F. No. V(PKS/357) Trb Cell-246/10/AP/M-III dated 11.12.2012 stated the Writ Petition is at 'Pre-admission stage'. As such, the said GOI order dated 25.08.2009 is neither set aside nor stayed by the Hon'ble Bombay High Court. Under such legal scenario the principle of judicial discipline demands that the order of higher authority is to be strictly implemented by the lower Authorities. Hon'ble Supreme Court has held in the case of UOI Vs. Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC), that orders of higher appellate authorities should be unreservedly followed by subordinate authorities unless operation of same has been stayed by competent court. Hence, Government finds no infirmity in the impugned Order-in- Appeal and therefore upholds the same." The Hon'ble SC has confirmed the same view already taken in the matter of UOI Vs. Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC) and passed the judgement on 01....
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....ble to be classified under Chapter 20. Heading 2008 covers 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. Roasting is a process used for bringing in to existence roasted nuts and as discussed earlier I find that the processes mentioned in chapter 8 do not cover roasting process. 14. Further, relevant portion of the Heading 2008 is reproduced as under for ready reference: 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 - Nuts, ground-nuts and other seeds, whether or not mixed together : 2008 11 00 -- Ground-nuts kg. 30% - 2008 19 -- Other, including mixtures: 2008 19 10 --- Cashew nut, roasted, salted or roasted and salted kg. 45% - 2008 19 20 --- Other roasted nuts and seeds kg. 30% - 2008 19 30 --- Other nuts, oth....
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....ion / Chapter. 17. Heading 2008 covers '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'. It is quite obvious that the product is question i.e. 'Oven Roasted and salted Cashew Nuts' is an edible part of cashew plant. Explanatory notes to heading explain 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 the preceding headings of this Chapter. The explanatory notes further explain that this heading inter-alia included: 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. It is amply clear that the subject products are not almonds or ground-nuts, rather they are 'Oven Roasted Areca Nuts' and 'Oven Roasted and salted Cashew Nuts'. I am of the considered view that 'Oven Roasted an....
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.... (b) goods listed in the Annexure appended to this notification. Goods of subheading 2008 19 are not mentioned in List 2 and 3. In Notification No. 60/2000-Customs, dated the 12th May, 2000 and 2/2007-Customs dated 5th January, 2007 also, there is no mention of goods of subheading 2008 19. Further, in the annexure appended to the subject notification also, there is no any mention of subheading 2008 19. 19. Notification No. 46/2011-CUS. dated 01.06.2011 exempts goods of the description as specified in column (3) of the Table appended thereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in, - column (4) of the said Table, when imported into the Republic of India from a country listed in APPENDIX-I; column (5) of the said Table, when imported into the Republic of India from a country listed in APPENDIX-II : Provided that the importer proves to the satisfaction of the Deputy ....