TaxTMI 
TaxTMI 
2024 (6) TMI 1563
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.... "Roasted Areca Nuts (Whole) and Roasted Areca Nuts (Cut)" from Myanmar, Indonesia, Sri Lanka, Singapore, UAE etc. The applicant sought the advance rulings on the following points: i. Whether the goods sought to be imported, namely, 'Roasted Betelnut/Areca Nut (whole/cut) are classifiable under the HS Code 2008 19 20 as per First Schedule of the Customs Tariff Act, 1975? ii. Whether subjecting the betel nuts/ areca nuts to the processes of roasting as detailed infra would qualify the products to be described as Roasted Betelnut/ Areca Nut in order to classify the same under the HS Code 2008 19 20 of the Customs Tariff Act, 1975 or any other Chapter Heading? iii. Whether the import of 'Roasted betelnuts / areca nut' from the member states of ASEAN is eligible for exemption under Notification no. 46/2011-CUs dated 01.06.2011? If yes, what are the documents required to claim the exemption under the said notification? iv. Whether the import of 'Roasted betelnuts / areca nut' from the Least Developed Countries (LDCs) is eligible for exemption under Notification no. 96/2008-Cus dated 13.08.2008? If yes, what are the documents requir....
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....he Areca nut is a tropical plant, belonging to the palm tree species. The kernel is obtained from the fruit of areca nut palm, known as the Areca Nut/Betel Nut or supari in India. 2.6. Now, the following process are involved in the preparation of Roasted Araca nut (Whole/Cut): i. Firstly, the raw areca nut is de-husked and its outer shell is removed. Thereafter, it is cleaned and left to dry. ii. Secondly, the cleaned and dried de husked areca nuts are fed into the seed roasting oven/machine and heated at the temperature in the range of 130-150 Degree Celsius. The roasting is done using firewood/palm kernel-based ovens/machines and the temperature of the flames is around 400 to 600 degrees Celsius. As a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. iii. Thirdly, the areca nuts are removed from the roasting oven and allowed to cool at normal room temperature. iv. Fourthly, when the areca nuts have cooled and attained normal room temperature, they are again fed back into the oven at enormous heat, so as to evenly roast the areca nut. 2.7. The process of roasting and c....
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....monized Commodity Description and Coding System generally referred to as the "Harmonized System" or simply "HS" is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). The system is used by more than 200 member countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. The official interpretation of the HS is given in the Explanatory Notes published by the WCO and offers a safe guide to interpret and classify the commodity under consideration. 2.13. As per the HSN Explanatory Notes to the Chapter Heading 2008 given below, 'Dry Roasted Areca (or Betel) Nuts' are specifically covered under the Chapter Heading 2008: 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. It includes, inter alia: (1) Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil- roasted or fat-roasted, whether or not containing or coated ....
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.... reproduced below would convey that only 'nuts' that are processed for preservation and as the manner prescribed therein are classified under the Chapter 08. Chapter 8 Edible fruit and nuts; peel of citrus fruit or melons Notes. 1.- This Chapter does not cover inedible nuts or fruits. 2.- Chilled fruits and nuts are to be classified in the same headings as the corresponding fresh fruits and nuts. 3.- Dried fruit 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 sorbet), (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 nuts. 2.17. From the above, it is clear that the nuts classifiable under this Chapter should be treated only for the purpose of additional preservation or stabilization or to improve or maintain their appearance. In effect, any treatment that is aimed at oth....
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.... Chapter 20 (heading 20.08). 2.18. From the above, it is amply clear that none of the processes referred above is employed in the product proposed to be imported. Further, the fruits air-dried to reduce moisture itself excludes it from the purview of Chapter 08 and places the same under the Chapter 20. Therefore, the processes involved in the proposed import item, 'Roasted Areca Nut (Whole/split) is completely different from the preservative processes for the products falling under the Chapter Heading 0802 and hence would not fall under the said Chapter. 2.19. Apart from the above, the impossibility of classifying 'roasted betelnut/ areca nut' under the Chapter Heading 0802 can be further ascertained from the Exclusion Clause to the HSN General Explanatory Note to the Chapter 08 given below: This Chapter also excludes a number of vegetable products more specifically covered in other Chapters (even though botanically some of them are fruits, e.g.: (a) Olives, tomatoes, cucumbers, gherkins, marrows, pumpkins, aubergines (egg-plant), fruits of the genus Capsicum or of the genus Pimenta (Chapter 7). (b) Coffee, vanilla, juniper berries and other....
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....pter 20 and the same was upheld. 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. Apart from the decisions of Hon'ble Supreme Court, the various decisions of the Advance Ruling Authorities given below supports the case of the Applicant that 'roasted nuts' are rightly classifiable under the Chapter Heading 2008 and not under the Chapter Heading 08 of the Customs Tariff. i. COMMISSIONER OF CUSTOMS, CHENNAI-II v. M/s SHAHNAZ COMMODITIES INTERNATIONAL PVT LTD 2023 (386) E.L.T. 214 (Mad.) ii. Advance Ruling No. CAAR/Del/Perfect/05/2024/705 dated 28.02.2024 in Re M/s Perfect Trading Company iii. In Re: Shahnaz Commodities International Pvt. Ltd. (2023) 4 Centax 231 (A.A.R. - Cus. - Mum.) iv. In RE : Universal Impex 2023 (385) E.L.T. 587 (A.A.R. - Cus. - Mum.) Applicability of Exemption notification no. 46/2011-Cus on import of 'Roasted Betelnut/areca nuť 2.22. It is submitted that the applicant intends to import 'Roasted Betelnut/areca nut' falling under Tariff Item 2008 19 20 from Member states of ASEAN and ....
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....e notification 46/2011 exempts the goods specified in the table subject to the condition that the said goods are of the origin of the Member countries in accordance with rules notified vide notification No. 189/2009-Customs (N.T.), dated the 31st of December 2009.Sr. No. 172 of the Table of Notification 46/2011 states as under: S. No. Chapter, Heading, Subheading and Tariff item Description Rate (in percentage unless otherwise specified) (1) (2) (3) (4) (5) 172. 200710 to 200820 All Goods 0.0 0.0 2.25. Further, Rule 13 of Notification 189/2009 states as under: 13. Certificate of Origin .- Any claim that a product shall be accepted as eligible for preferential tariff treatment shall be supported by a Certificate of Origin as per the specimen in the Attachment to the Operational Certification Procedures issued by a Government authority designated by the exporting party and notified to the other parties in accordance with the Operational Certification Procedures as set out in Annexure III annexed to these rules. 2.26. So, import of 'Roasted Betelnut/areca nut' falling under Tariff Item 2008 19 20 is eligible for exemptio....
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....10th March, 2015] Explanation: - For the purposes of this notification, "applied rate of duty" means the sum of the standard rate of duty specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and Agriculture Infrastructure and Development Cess leviable under section 124 of the Finance Act, 2021 (13 of 2021) 2.28. It is submitted that 'Roasted Betelnut/areca nut' falling under CTH 2008 has not been specified in the Appendix I or Appendix II of notification 96/2008-cus and is eligible for exemption from whole of the duty of customs as specified in the first schedule to the Customs Tariff Act, 1975 and from whole of Agriculture Infrastructure and Development Cess leviable under section 124 of the Finance Act, 2021. The said exemption is available if the imported goods are of the origin of the country listed in the schedule of the notification in accordance with Rules of Origin notified vide notification No. 29/2015-Customs (N.T.), dated 10th March, 2015. 2.29. Rule 15 of Notification 29/2015 states as under: 15. Issuance of certificate of origin .- (1) The products eligible for preferential treatment shall be supported by a c....
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.... with regard to points raised in the application are furnished, as under: 3.1. In this regard, it is intimated that with respect to the classification of the 'Roasted Area Nut/Betel Nut', it is submitted that classification of any goods is decided as per General Rules of Interpretation, relevant chapter/section notes and references are also taken from HSN explanatory notes issued by WCO. For the classification of the goods Roasted Areca Nut and Roasted Areca Nut Cut, two headings 2008 & 0802 are being examined by this office. Text of these heading is reproduced below. "CTH 0802: OTHER NUTS, FRESH OR DRIED, WHETHER OR NOT SHELLED OR PEELED 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" 3.2. As per HSN Explanatory notes to Chapter 8, this Chapter covers fruit, nuts and peel of citrus fruit or melons (including watermelons), generally intended for human consumption (whether as presented, or after processing). They may be fresh (including chilled), frozen (whether or not previously cooked by steaming o....
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....oated with vegetable oil, salt flavors, spices or other additives." The above-mentioned explanatory notes CTH 2008 specifically include the roasted areca (betel) nuts. Comments in respect of Exemption Notifications, are as under: 3.5. Applicability of exemption notification no. 46/2011 dated 01.06.2011. Benefits of the exemption notification no.46/2011 dated 01.06.2011 is available subject to the conditions laid down in the notification and provisions of section 28DA of the Customs Act, 1962 along with other provisions in this regard. 3.6. Applicability of Exemption Notification No.96/2008 dated 13.08.2009. Benefits of the Exemption Notification No.96/2008 dated 13.08.2009 is available subject to the conditions laid down in the notification and provisions of Section 28DA of the Customs Act, 1962 along with other provisions in this regard. 3.7. Determination of origin of goods in terms of origin notified vide Notification No.189/2009 dated 31.12.2009. Origin of goods in terms of origin notified vide Notification No. 189/2009 dated 31.12.2009 shall be decided subject to the conditions laid down in the notification and as per the CAROTAR....
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.... 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". 6.2 I also note that Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and 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 e....
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....re 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 Moreover, 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. 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 relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. This being the expressly acknowledged basis of the structure of the Central Excise Tariff 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." 6.6 Further, in the CAAR, Mumbai Ruling No. CAAR/Mumbai/ARC/39,40,4....
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....lso earlier CAAR Rulings in the matter, I am of the view that the "Roasted Areca Nuts (Whole) and Roasted Areca Nuts (Cut)" fall under Custom Tariff Heading 2008, specifically under Sub-heading 20081920 covering "Other roasted nuts & seeds" of the First Schedule of the Customs Tariff Act, 1975. Accordingly, reply to the issues raised by the applicant in the instant application are, as under: i. Whether the goods sought to be imported, namely, 'Roasted Betelnut/Areca Nut (whole/cut) are classifiable under the HS Code 2008 19 20 as per First Schedule of the Customs Tariff Act, 1975? Reply: Yes, Roasted Areca Nuts (Whole) and Roasted Areca Nuts (Cut) are classifiable under Custom Tariff Heading 2008, specifically under Sub-heading 20081920 covering "Other roasted nuts & seeds" of the First Schedule of the Customs Tariff Act, 1975. ii. Whether subjecting the betel nuts/ areca nuts to the processes of roasting as detailed infra would qualify the products to be described as Roasted Betelnut/ Areca Nut in order to classify the same under the HS Code 2008 19 20 of the Customs Tariff Act, 1975 or any other Chapter Heading? Reply: The roasted arecanut ....