TaxTMI 
TaxTMI 
2024 (5) TMI 1686
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.... as the 'Act'). The applicant intends to import "Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) and Roasted Areca Nuts (Cut)" from Indonesia, Sri Lanka and Myanmar into India through the port of Chennai-II (Import), Chennai-600001. STATMENT OF FACTS AND QUESTION LAW 1.1 The Applicant intends to import the following goods and seek ruling of Hon'ble Authority in the matter of Classification of the goods under Customs Tariff Act, 1975 which in the opinion of the Applicant are classifiable under chapter heading 20081920. S. No. Name of Item Country from where to be Imported 1. Roasted Areca Nut (Whole) Roasted Areca Nut (Split) Roasted Areca Nut (Cut) Indonesia, Sri Lanka, Myanmar 1.2 The Process for involved in the manufacture of the above said goods is as under: Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut): Following processes are conducted on raw Areca/Betel Nut: - a. De- husking the raw betel/areca nut and drying the same before being fed into the roasting oven. b. Feeding the fresh areca nuts into a seed roasting oven, heating up to 130-150 deg C and roasting the fresh ....
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....and reiterated that the HSN Explanatory Note is the safe and dependable guide in the matters of classification of items: i. L.M.L. Ltd. Versus Commissioner of Customs Reported in 2010 (258) E.L.T 321 (S.C), ii. Holostick India Ltd. Versus Commissioner of Central Excise, Noida Reported in 2015 (318) E.L.T 529(S.C), iii. Collector of Central Excise, Shillong Versus Wood Craft Products Ltd Reported in 1995 (77) E.L.T 23 (S.C) 1.5 As per the Explanatory Note to Chapter 8 of Customs Tariff Act, 1975 deals with 'edible 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 excluding from Chapter 8 (and will fall under chapter 20). The processes mention in chapter 8 are different from the processes performed on impugned goods, they are excluded for the purpose classification from chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as "TARIFF"). 1.6 In respect of alternate CTH 2106, we woul....
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....e decision in the case of M/s Crane Betelnut Powder Works Vs Commissioner of Customs & Central Excise, Thirupathi reported in 2007 (210) E.L.T 171 (S.C) and held the classification of processed betel nuts under 21069030. 1.9 The process of roasting has not been defined in the Tariff Act. However, the process of roasting is done using firewood/palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius. as a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degree Celsius. Roasted betel nut undergoes a change in its appearance as well as chemical characteristic on account of the roasting process. There is a visible deposition of an ash-like substance of the outer surface of the betel nut. there is a substantial change in the chemical characteristics of the Betel nut product on account of the roasting process. that the tannin and arecoline content of raw Betel nut/areca nut gets substantially changed by subjecting the same to roasting and boiling. therefore, roasted betel nut is a distinctive product of betel nut making it suitable for immediate consumption. Roasting is not aimed at additional prese....
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.... Mumbai. III. 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, M.P in Application No. 22, 23 & 24/2023-DELHI O/o Commr-CAAR-NEW DELHI, where identical goods are held classifiable under 2008 19 20, copy of judgment enclosed marked as Annexure-III. IV. 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 under 2008 19 20, copy of judgment enclosed marked as Annexure-III. 1.12 As per the Explanatory Note 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 excluding from Chapter 8....
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....i-II (Import) Customs Commissionerate with regard to points raised in the application are furnished as under: i. No comments as provisions quoted. ii. This Commissionerate has preferred appeals against advance rulings passed on the same classification dispute in respect of the applicants M/s. Shree Durga Traders, M/s. Shree Ganesh Traders and M/s. INS Consultancy vide CMA Nos. 280/2024, 238/2024 & 390/2024 respectively. iii. The classification sought by the applicant for the items described as "Roasted Areca nuts (Whole/Split/Cut)" under CTH 20081920 is clear attempt to circumvent to import policy conditions of the item "Areca Nuts/Betel Nuts" under Customs Tariff Heading 080280. iv. Comments to points raised by the applicant vide Annexure I & Annexure II of the application are as below: The claims made by the applicant and the ruling sought on the classification of the Roasted Areca nuts (Whole/Split/Cut) is devoid of any concrete evidence and legally untenable on the following grounds: A. Though roasting as a process is not defined, it will fall under the moderate heat treatment' mentioned in Chapter Note 3 of Chapter 8 re....
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....dge dictionary. "Preparation is a mixture of substances, often for use as a medicine". According to Collins Dictionary "A preparation is a mixture that has been prepared for use as food, medicine, or a cosmetic". However, as per the processes mentioned by the applicant, it is evident that there is neither any mixture of products nor any change in the original goods and hence arecanuts after subjected to said processes still covered under Chapter 8 and more appropriately falls under CTH 080280. D. The applicant has claimed that dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. The relevant portion of the chapter heading 2008 is reproduced below: 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: 200819 -- Other, including mixtures 20081920 --- Other roasted nut and seeds However, the Chapter 20 does not cover any nuts or fruits prepared or preserved by the processes specified under ....
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....uct is more specifically classified under CTH 08020 classification under Chapter 2008 or 2106 is unwarranted. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: a. The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. G. It is pertinent to mention that the Chapters in the Customs Tariff are organized as per evolution, which is evident by the fact that the edible nuts and fruits are classified under Chapter 8, preparations of vegetables, fruits, nuts or other parts of plants classified under Chapter 20 and miscellaneous edible preparations classified under Chapter 21. Hence, the roasted betel nut which did not undergo any pre....
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....t through mis- declaration and mis- classification. 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 interest of the local areca nut farmers and to safeguard the interest of the revenue. J. It is to bring to the notice that on testing of the imported goods declared as "Roasted Areca nuts" imported by the M/s. Universal Impex & M/s. Neena Enterprises on the strength of the Advance Rulings, it is found that the goods are actually moderately heat-treated areca nuts and not roasted as claimed by the applicants. Hence, it is conclusively proved that all these advance ruling applications are being filed to circumvent the policy conditions applicable under CTH 080280 and it is requested to consider the same before issuing the advance ruling on the classification of the "Roasted Areca nuts", as it requires huge infrastructure to carry out the processes mention in their applications. K. Further, it is to inform that this Commissionerate has preferred appeals with stay application in the Hon'ble High Court of Madras against CAAR Advance Rulings passed in si....
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.... under Chapter heading CTH 2008.19.20, E) That the HSN explanatory notes state that "the product of this heading are generally put up in cans, jars or airtight containers, or in casks, barrels or similar containers", whereas the 'roasted areca nuts' are packed in bags, F) Classification under CTH 2208 or 2106, H) Justification vide Judgement in case of M/s. S.T. Enterprises vs commissioner of customs (VII) in Customs Appeal No 40002 & 40003 of 2021, I) Justification on Testing failed on Previous Import By M/s. Universal Impex & M/s. Neena Enterprises on Strength of the Advance Ruling. III. In this regard- III. a) It is was submitted in 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%. Further any amount of drying or moderate heat treatment cannot remove the moisture content below the said level of 6%. Further, only by the process of roasting, by use of roasting ovens / furnace, the moisture content in "Roasted Areca Nut" is brought below 4%. Further, the contention of the respondent Commissionerate that the moisture conten....
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....derstand 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 moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process Advan III b.3) Note 3 to Chapter 8 specifics certain treatments that could be carried out on the dried....
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....said containers. Moreover, the packaging of a product, cannot decide the description of the goods, which would lead to absurdity. Further, the packaging is made to prevent the goods from deterioration and enable easy access to marketability. Whereas neither aspects have any bearing on 'roasted areca nuts' as roasting minimizes the moisture to the maximum level, thereby preventing insect infestation, damage and deterioration. Once, the product/goods is unaffected by outside parameters and vagaries of nature, the packaging need not be in airtight containers. Further, packaging is a means of convenience and no other significance can be attached to it. V. There is considerable force in the submission of the learned counsel for the applicant that the classification as far as possible must be in conformity. and in consonance with the HSN explanatory Notes. It is trite law 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 19.20 is a special entry covering nuts subject to the pro....
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....f reference available and as the moisture content and carbohydrate content of the sample under reference is less than the raw areca nut, it may be considered as dry roasted areca nuts. Based on the above test report, the Chennai customs has cleared the consignment, the truth and veracity of the same can be verified from the same customs representative who attended the personal hearing. This being the fact available on public record, suggesting moisture content to be 1.5% is nothing short of distorting the truth and in fact it tantamount to misguiding the Authority. "I find that the issue dealt with i.e. Classification of "Roasted betel nuts" in the judgement of the Honourable High Court of Madras is of exactly the same Issue that is impugned in this application and therefore is squarely applicable to this case. 8. On the basis of foregoing, I am of the view that the Roasted areca/betel nuts fall under Custom Tariff Heading 2008, specifically under CTI 2008 19 20 Other roasted nuts & seeds of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975. 9. I rule accordingly. "It is requested that this Hon'ble Advance Ruling Autho....
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....nts. 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 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 into existence roasted nuts and I find that the processes mentioned in chapter 8 do not cover roasting process. 5.3 I also note 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....
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....me 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." 5.6 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 alm....