AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1616
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....plicant, M/s R V International, New Delhi is a proprietorship firm of Mr. Prabhjyot Singh Dang. The firm is duly registered with the respective statutory authorities viz. G.S.T. Department, Income Tax Department, DGFT Department, New Delhi etc. The Importer Exporter Code of the firm is AGQPD1949R and the GST number of the applicant is 07AGQPD1949R1ZN. The applicant has been regularly filing it statutory returns with the concerned departments and authorities. 1.2. That the applicant is in the process of setting up its business of trading/import of Provisional Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" (hereinafter referred to as the 'subject goods") to India. The appellant intends to import the said goods mainly from Myanmar, Thailand, Indonesia, Vietnam, Sri Lanka, UAE, Cambodia, Laos & Singapore into India. 1.3. That therefore the applicant is approaching this Hon'ble Authority, seeking advance ruling qua the subject goods as mentioned in the following paras of this application as the applicant intends to import the same into India and hence would like to have a proper understanding and clarification as to whether the goods being impor....
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....th regards to the preservative treatment that are carried out on areca nuts, the Professor and Head of the Department of Food Process Engineering, College of Food and Dairy Technology, Koduveli, Chennai has issued a certificate clarifying the above. Thus it can be seen that the preservative treatment in this case is provisional and temporary and the preservatives can be removed before consumption of the areca nut. 1.8. That the abovementioned goods "Provisionally Preserved Areca Nuts" are specifically covered and are classifiable under CTH 0812 90 90 of the Customs Tariff Act, 1975. Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter note (3) to chapter 8 reads as follow -: "3. Dried fruits 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 sorbate) (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 d....
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....d after getting dissolved in water the benzoic acid get removed. In cases where nut is treated with sulphur-di-oxide, these can be treated with hydrogen peroxide by which the sulphur-di-oxide is oxidized to sulphate and during the process addition of sodium bi-carbonate and water will remove the excess peroxides. 1.13. That in view of the above facts and legal provisions, the product "Provisionally Preserved Areca Nuts (whole) and Provisionally Preserved Areca Nut (Split)" are classifiable under Customs Tariff Heading 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975". 1.14. That on the matter of interpretation of law of facts, the applicant most respectfully submits that as per their best knowledge and belief the items are classified under classification heading no. given in Custom Tariff heading 0812 9090. The said entry in Customs Tariff Act, 1975 reads as under :- Tariff Item Description of Goods Unit 0812 10 00 - Cherries Kg's (Kilograms) 0812 90 - Other 0812 90 10 --- Mango Slices in brine 0812 90 90 --- Other Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter note (3) to....
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.... RESPECT OF THE QUESTIONS(S) ON WHICH ADVANCE RULING IS REQUIRED: - a. That the goods in question which is to be imported into India by the applicant will be Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" hence is rightly classifiable under Customs Tariff Heading 0812 and particularly 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" b. That the process mentioned in Annexure I, clearly shows that the product "Provisionally Preserved Areca Nuts (whole) and Provisionally Preserved Areca Nut (Split)" are classifiable under Customs Tariff Heading 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" c. That the items are classified under classification heading no. given in Custom Tariff heading 0812 9090. The said entry in Customs Tariff Act, 1975 reads as under :- Tariff Item Description of Goods Unit 0812 10 00 - Cherries Kg's (Kilograms) 0812 90 - Other 0812 90 10 --- Mango Slices in brine 0812 90 90 --- Other Chapter 8 covers edible fruit and nuts, peels of citrus fruits or melons. Chapter note (3) to chapter 8 reads as follow -: ....
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....y thereby seeking the subject goods under classification CTH 0812 and more particularly under the CTH 0812 90 90. 2. As per the provisions of CAAR Regulation, 2021, the complete application of the applicant was provided to the concerned custom port, i.e. Chennai-Il (Import), Custom House, Chennai and requested to furnish the requisite comment in the instant matter. The port authority vide letter dated 14.10.2024 furnished the requisite comments in the matter, wherein the port authority has opposed for the rulings in the instant matter. The comments of the port authority in the instant matter, are as under: 2.1 The applicant M/s. R V International, New Delhi, is proposing import of "Provisionally Preserved Areca Nuts (Whole and Split)" under Customs Tariff Item 0812 9090 of the First Schedule of the Customs Tariff Act, 1975 and produced statement of relevant facts having bearing on the question raised (Annexure-1) and statement containing applicant's interpretation of law (Annexure-2). 2.2. M/s. R V International has sought advance ruling from CAAR, New Delhi on the question of classification of "Provisionally Preserved Areca Nuts (Whole and Split)" under CTI 0812 9090.....
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....nsuitable for immediate consumption. The applicant's product, being provisionally preserved with the same chemicals, fits this description precisely. Therefore, they argue that the goods should be classified under CTH 0812 90 90, which covers "other" provisionally preserved fruits and nuts. iii. Distinction from Heading 0802 While CTH 0802 covers areca nuts in their natural state (whether fresh or dried), the applicant argues that the provisional preservation process applied to their goods differentiates them from ordinary areca nuts. According to Rule 3 of the General Rules for the Interpretation of the Harmonized System (HS), when goods are classifiable under two headings, the heading that provides the most specific description shall be preferred. In this case, CTH 0812 provides a more precise description for provisionally preserved areca nuts that are unsuitable for immediate consumption, while CTH 0802 covers areca nuts in their natural state. iv. Supporting Scientific and Technical Analysis The applicant has obtained a certificate from the Professor and Head of the Department of Food Process Engineering, College of Food and Dairy Technol....
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....egetable oil or small quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts". ii. It is crucial to note that the item "Areca Nut/Betel Nut" is specifically an unambiguously covered under CTSH 0802 80 of the First Schedule of the Customs Tariff Act, 1975. The chapter heading 0802 provides a clear and comprehensive description, which reads as "Other nuts, fresh or dried, whether or not shelled or peeled". This explicit inclusion undeniably encompasses Areca nuts in their dried form, regardless of whether they have been shelled or peeled, under the chapter heading 0802. iii. The processes described by the importer, including de-husking, peeling, splitting, heat treatment, and drying, are all consistent with the processes covered under Chapter 08, specifically under heading 0802. These processes do not fundamentally alter the character of the areca nuts, but rather prepare them for preservation and storage. iv. The importer's claim regarding the provisional preservation using sulphur- di-oxide gas or sodium benzonate solution falls within the scope of Note 3(a) of Chapter 08, which allows for additional preserv....
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....nder heading 0812. Many dried fruits and nuts undergo preservative treatments that can be removed before consumption, yet they remain classified under their specific headings within Chapter 08. xi. By applying the Specific vs General Entry Rule 3(a) of General Interpretation Rules, which states, "The heading which provides the most specific description shall be preferred to headings providing a more general description," it can be concluded that the impugned goods are more appropriately classifiable under CTSH 0802 80. This is because CTSH 0802 80 specifically covers areca nuts/betel nuts, providing a more precise description of the goods in question than the general category of provisionally preserved fruits and nuts under heading 0812. xii. It is worth noting that the processes described by the importer are consistent with the preparation of dried areca nuts for long-term storage and commercial distribution. These processes do not fundamentally alter the essential character of the areca nuts, but rather prepare them for preservation and use in a manner consistent with dried nuts under heading 0802. xiii. The importer's reference to Chapter Note 4 of....
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....cted, as the goods are appropriately classified under CTI 0802 8090 as outlined above. Records of the personal hearing in the matter: - 3. In the instant case, the personal hearing conducted physically on 24.10.2014 wherein the authorized representative of the applicant has reiterated the same which has already been submitted with the file at the time of filing of application for rulings. 4. The A.R. of the applicant, has further submitted, is under: a. This has reference to the Application for Advance Ruling under Section 28F of the Customs Act, 1962 filed by the applicant RV INTERNATIONAL (hereinafter referred to as 'the Applicant') seeking classification under the Customs Tariff Act, 1975, of Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, while in storage and for safe transportation, which the Applicant intends to import from overseas. b. That comments on the application filed by the respondent customs port Commissionerate of Chennai-II, Import, Chennai, Tamilnadu, wherein it opposed the advance ruling sought by the applicant is without any....
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....rough washing). e. In case of treatment with 1% Bordeaux solution, the Areca Nuts can be made suitable for human consumption by subjecting it to water treatment (thorough washing). f. In case of preservation carried out with Sodium Benzoate solution, the Areca Nuts can be treated with Sodium bi-carbonate and when washed with plain water the excess Benzoic Acid will get removed. In this process, by way of neutralisation and after getting dissolved in water the benzoic acid gets removed. g. In cases where the Areca Nuts is preserved with Sulphur di-oxide, these can be treated with Hydrogen Peroxide by which the Sulphur di-oxide is oxidized to sulphate and during the process addition of sodium bi carbonate and water will remove the excess peroxides. f. It is submitted that after carrying out the above processes for removal of preservatives, the Areca Nuts become suitable for human consumption. Hence, it can be observed that the above preservative treatments are provisional and temporary and the preservative chemicals are required to be removed before the consumption of Areca Nuts. g. It is submitted that the provisional preserved Areca Nuts....
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.... "This heading applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation during transport or storage prior to (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), provided they remain unsuitable for immediate consumption in that state." Such provisionally preserved areca nuts are not classifiable under Tariff Heading 0802. The relevant portion of Heading 0802 is as under: 0802 Other nuts, fresh or dried, whether or not shelled or peeled 080880 - Areca nuts: 08028010 --- Whole 08028020 --- split 08028030 --- Ground 08028090 --- Other j. It is submitted that even though Areca Nut is separately mentioned under Heading 0802, the Areca Nuts covered under sub-heading 08028010 to 08028090 shall only include the ones which are suitable for immediate consumption, even if in whole, cut or split form. These Areca Nuts are edible in nature due to the absence of preservative agents being used thereon. Whereas, the Areca Nuts which are provisionally preserved and are unfit for immediate....
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.... The Note appearing below the Heading 2008 states 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 preceding headings of this Chapter. The products of this heading are generally put up in cans, jars or airtight containers, or in casks, barrels or similar containers. Hence, it can be seen that if Areca Nuts are provisionally preserved and hence are unfit for immediate consumption, it would find classification under Heading 0812 and contrary to that if the Areca Nuts are even though subjected to preservation process, but still not rendered unfit for immediate consumption, it would find classification under Heading 2008. Further, the Areca Nuts are intended to be imported packed in bags/sacks and not in cans, jars or airtight containers, or in casks, barrels or similar containers and even for this reason, it would not find classification in Heading 2008. n. It is submitted that Pan Masala and Betel Nuts/Supari with lime are ready to eat preparations covered in Chapter 21 of the Customs Tariff ....
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....mple process of water washing or treating with Sodium bi-carbonate or Hydrogen Peroxide, before actual consumption of such provisionally preserved areca nuts into its edible form/preparation. Reliance is placed on ruling in the matter of Hi-Tech Print Systems - Ruling No. CAAR/Mum/ARC/42/2023. The relevant portion of the said ruling is extracted as under: "6.4 From the submission of the applicant I find that the subject product is treated with sulphur di-oxide gas or sodium benzoate solution before packing and export for preservation. The said preservatives can be removed before consumption through simple processes, as explained at para 2 above, to make the product suitable for human consumption. It is observed that the subject goods remain unsuitable for immediate consumption in that state and need to be processed further to remove the preservatives to make the same suitable for human consumption. Thus, I find that the conditions of chapter note (4) as mentioned above are duly fulfilled and hence the said goods come within the ambit of Customs Heading 0812. Therefore, in view of the submissions made by the applicant, relevant legal provisions and the above discussions, I ....
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....ation of Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) on the basis of the information on record as well as the existing legal framework having bearing on the classification of the Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) under the first schedule of the Customs Tariff Act, 1975. 5.2. Chapter 8 covers fruit, nuts and peel of citrus fruit or melons (including watermelons), generally intended for human consumption (whether as presented or after processing). As per HSN explanatory notes, goods under Chapter 8 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). 5.3. Chapter 8 under the Customs tariff Act 1975 covers Edible fruit and nuts; peel of citrus fruit or melons and note (3) to chapter 8 provided as: "3. Dried fruits or dried nut....
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....er 0802, nuts provisionally preserved but unsuitable in that state for immediate consumption, as the areca nuts in the present case, will get covered under Heading 0812 which occurs later in the schedule and accordingly, the nuts that are provisionally preserved and not fit for immediate consumption need to be classified more specifically under the CTH 08129090. 5.6. Further, reliance has also been placed upon on the following rulings -: i. Ruling No. CAAR/Mum/ARC/42/2023 dated 15.05.2023 of Hon'ble Authority passed in the matter of M/s. Hi Tech Prints Systems, Chennai Vs. The Commissioner of Customs (Import), Tuticorin, where identical goods are held classifiable under 0812 90 90. ii. Ruling No. CAAR/Mum/ARC/26/2024 dated 22.02.2024 of Hon'ble Authority passed in the matter of M/s. Radiance Enterprises, Chennai Vs. The Commissioner of Customs II (Import), Chennai and The Commissioner of Customs, Tuticorin, where identical goods are held classifiable under 0812 90 90. 6. It is pertinent to mention that, as per Notification No. 01/2021 - Customs (N.T.) dated 04.01.2021 (As amended vide Notification No. 63/2022-Customs (N.T.) dated 20.07.2022)1 Subs. b....