TaxTMI 
TaxTMI 
2024 (10) TMI 1786
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.... import "Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) and Roasted Areca Nuts (Cut)" from Myanmar, Indonesia, Sri Lanka, Thailand and Singapore etc. 2.1. That the applicant approached this Authority for 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 imported shall be covered under a particular classification or the other. The applicant in the instant application submitted as under: - 2.2. That the nomenclature and details of the goods being sought to be imported by the applicant are as under: - (i) Roasted Areca Nuts (whole) (ii) Roasted Areca Nuts (Split) (iii) Roasted Areca Nuts (cut) 2.3. That the processes carried out on the Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) are as under: - 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 the betel nuts would be roasted well beyond 100 degree Celsius, usu....
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....ing 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). 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"). 2.8. That further HSN explanatory note qua Chapter 20 explains as below: This Chapter includes: (1) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by vinegar or acetic acid. (2) Vegetables, fruit, nuts, fruit-peel and other parts of plants preserved by sugar. (3) Jams, fruit jellies, marmalades, fruit or nut purées, fruit or nut pastes, obtained by cooking, (4) Homogenized prepared or preserved vegetables and fruit. (5) Fruit or vegetable juices, neither fermented nor containing added alcohol, or of an alcoholic strength by volume not exceeding 0.5 % vol. (6) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by other processes not provided for....
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....LHI, where identical goods are held classifiable under 20081920. 2.13. 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. 2.14. That the process of roasting thus changes the chemical and physical characteristics of the areca nut by reducing arecoline and tannin as well moisture. In view of above the applicant would like to have advance ruling on the following issue: "Whether the goods sought to be imported i.e. Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) and Roasted Areca Nuts (Cut)" is classifiable under the CTH 200 19 20. 2.15. That the applicant requested the Hon'ble Authority for Advance Rulings that the appropriate classification of the aforesaid goods may kindly be ruled under section 28H of the Customs Act, 1962. 2.16. In the statement containing applicant's interpretation of law and / or facts, as the case may be, in respect of question (s)on which Advance Rulings is requi....
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....ntaining 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 nuts. These goods are chewed for a variety of reasons such as stress reliever, mouth freshener, concentration improver and digestive following food intake. 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. g. CHANGE IN THE BETEL 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 and as a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. The roasted betel nut undergoes a change in its appearance as well as in respect of its chemical characteristics on account of the roasting process. After the processing, there is a visible deposition of an ash-like....
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.... 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). k. 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 cases were rejected by the Hon'ble High Court vide its judgment dated 01.08.2023. The Hon'ble High Court has after considering all the other chapter including chapter 08, and chapter 21 of Customs Tariff and also considered the other rulings as submitted by the customs authority though qua other goods i.e. boiled areca nuts, API supari, unflavoured supari etc. l. It has been observed by the Hon'ble High Court that the Rulings of the Advance Ruling Authority did not deal with Roasted Areca Nut and thus would have no relevant to the issue on hand. Further, it has been held that Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classificatio....
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....vers 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 or boiling in water or containing added sweetening matter) or dried (including dehydrated evaporated or freeze-dried); provided they are unsuitable for immediate consumption in that state, they may be provisionally preserved (e.g., by Sulphur dioxide gas, in brine, in Sulphur water or in other preservative solutions). From the above-stated explanatory notes to Chapter 8, it appears that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. However, it does not specifically include the process of roasting. 3.3. The explanatory notes to CTH 0802 are reproduced as under: "The principal nuts of this heading are almonds (sweet or bi/er), hazelnuts or filberts, walnuts, chestnuts (Castanea spp.), pistachios, macadamia nuts, pecans and pine nuts. This heading also covers areca (betel) nuts used chiefly as a masticatory, cola- (kola) nuts used both as a masticato....
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....ve of the application in their rebuttal reply to the comments of the customs port Commissionerate along with additional submissions, submitted, as under: a. That it is submitted that the comments on the application filed by the respondent, are not opposed for the advance ruling sought by the applicant for the goods i.e. roasted areca nut under CTH 20081920. b. That the roasting falls under the process of Moderate Heat Treatment which 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%. 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% 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 chan....
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....lude 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 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 heati....
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....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. i. 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 dried and roasted nut being maintained CTH 2008.19.20 which covers roasted nut including areca nut is a specific entry which opposed with the entries/items covering nuts under CTH 08. j. That it is submitted that the betel....
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....ed by the Authority of Advance Ruling New Delhi and Mumbai, into consideration while passing orders in the interest of justice. 6. I have taken into consideration of all the materials placed on record in respect of the subject goods including the additional submissions made by the applicant. I have gone through the response from the Customs Port Commissionerate of Ludhiana. I therefore proceed to decide the present application regarding classification of Roasted Areca Nut 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 under the first schedule of the Customs Tariff Act, 1975. 6.1. I note 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....
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....eatment, 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. Roasting, as submitted by the applicant, is carried out using roasting ovens due to which betel nuts are roasted in the range of 150 degrees Celsius then cooled in room temperature and the cycle is repeated until the moisture content is less than 6 %. This clearly indicates that the roasting is much more than mild heat treatment. 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. Therefore, the impugned goods do not satisfy Note 3 to Chapter 8. 6.4. While examining the scope of CTH 2008, 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 expl....