TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1617
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....to India. The applicant submitted as under: 1.1. The 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. The raw betel nut obtained is subjected to various processes to produce various products. Depending upon the specific value additions different varieties of betel nut such as API Supari, Chikni Supari, Boiled Supari, Dried Supari, Unflavoured Supari, Roasted Supari etc are obtained. The goods in the present application are "Roasted Areca Nuts Whole", "Roasted Areca Nuts Cut" and "Roasted Arecanut Split". 1.2. The Applicant intends to import "Roasted Areca Nuts / Betel Nuts" from Indonesia, Myanmar, Bangladesh, Srilanka, Thailand, Cambodia into India through the Seaports/ICD's at Tuticorin, Mundra and Nhava Sheva. Since the process of "Roasting" is not specifically defined in the Customs Tariff Act nor in the Chapter Notes, but only in the HSN explanatory notes, clarification is being sought from this Advance Ruling Authority. 1.3. The Applicant states that the cultivation, harvesting and processing of the "Roasted Areca Nut" has undergone....
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....ss. There is a visible deposition of an ash-like substance on 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. It has been established through research that the Tannin and Arecoline content of raw areca nut gets substantially changed by subjecting the same to roasting. 1.6. Various research and articles throws light on the chemical composition of various forms of areca nuts. As per the article titled "Estimation of Arecoline content of various forms of areca nut preparations by high-pressure thin-layer chromatography" substances viz. Polyphenols (flavonols, tannins) constitute a large proportion of the dry weight of the nut, their content in areca nut vary depending on the degree of maturity and its processing method. The tannin content is highest in unripe areca nuts and decreases significantly with increasing maturity. 1.7. Roasting is not aimed at additional preservation or stabilization or to improve or maintain its appearance. Therefore, roasted areca nut is a distinctive product, more specifically classifiable under Chapter 20 of the Customs Tariff Act 1975 and ....
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....ncluding 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). The said note specifies the physical status of the goods along with corresponding processes that could be carried on those goods under this chapter. Note 3 to Chapter 8, states that Dried fruit or dried nuts of this Chapter may be partially rehydrated or treated for the following purposes: (a) for additional preservation or stabilisation (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 dried nuts. 1.11. The areca / betel nut is mentioned in Heading 0802, specifically under subheading 0802 80. The explanatory note to Heading 0802 states that this heading also covers areca (betel) nuts used chiefly as a masticatory. One of the main use of the goods under consideration is mas....
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....iff Act and has been dealt in detail in the HSN Explanatory Notes. 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. Roasting is a process used for bringing into existence roasted nuts, which process is not mentioned in Chapter 8 CTH. Chapter 20 covers the preparation of nuts, one of the processes for preparing the impugned goods is specified in Chapter Heading 2008, i.e. roasting. CTH 2008: Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not cont....
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....1) SCC 131, wherein the court held : "If there is no meaning attributed to the expressions used in the particular enacted statute then the items in the customs entries should be judged and analysed on the basis of how these expressions are used in the trade or industry or in the market or, in other words, how these are dealt with by the people who deal in them, provided that there is a market for these types of goods". The roasted betel nut is an independent product, which is sold in the market in both packed and unpacked form. Further, the packed roasted betel nuts are labelled and marketed as roasted betel nuts/ roasted supari and carry the stamp of approval by the FSSAI. Therefore, the impugned goods are known in the trade as roasted betel nuts only. Further, the Tariff heading and corresponding HSN Explanatory Note clearly explain the scope of the Chapter heading 2008. 1.16. On the other hand, Note 3 to Chapter 8 specifies certain treatments that could be carried out on the dried nuts for additional preservation or stabilization or to improve or maintain their appearance. As per the said note, the processes that could be carried out are moderate heat treatment....
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....nnot classify under Chapter 21 or its sub-headings. As a result, edible preparations shall be classified under this chapter, only if the same is not classifiable under any of the other specific entries for edible preparations. As the goods under consideration are already included in Heading 2008 of the Customs Tariff Act, 1975, they stand excluded from the scope of Chapter 21. Further, since the impugned goods have undergone roasting which has not been categorized or classified in Chapter 8, while on the other hand Chapter 2008 19 20 categorically specified "Roasted Areca Nuts" in its explanation to HSN notes, the "Roasted Areca Nuts and Roasted Areca Nuts Cut" appears to be classifiable under Chapter 2008 19 20 CTH. 1.19. As per the applicant, the above-mentioned 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, as mentioned supra, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. The Applicant states that the HSN Explanatory Note is the safe and dependable guide in the matters of classification of items and relies upon the followi....
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...., spices or other additives. Dry-roasting, oil-roasting & fat-roasting, as a processes, are very much a part of chapter heading 2008 by virtue of HSN Explanatory Notes. It is pertinent to note that none of these processes are 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. 1.23. In this regard the judgment of the Hon'ble Supreme Court's in the cases of M/s.Amrit Agro Industries Ltd as well as M/s Phil Corporation is the squarely applicable to the impugned good "Roasted Betel Nut", wherein, the Apex Court clarified the doubts on the issue of whether a process of roasting amounts to a preparation or not. The Court observed that HSN Explanatory Note to chapter 20, refers to "dry-roasted, oil-roasted or fat-roasted". Further, the principal processes of preparation would change the classification of nuts from Chapter 8 to Chapter 20. Further, the impugned goods are not excluded by any chapter note or explanatory note from CT Heading 2008. Therefore, the Apex Court held that the roasted betel nuts are classifiable under Heading 2008 based on the terms of the Heading 2008 and HSN Explanatory ....
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....s and preparation of "Roasted Areca Nut" from Chapters 08 and 21 of the CTH, on the basis of the above Supreme Court judgments and has opined and ruled that Chapter 20008 19 20, is the appropriate classification for "Roasted Areca Nut" by its Ruling No.CAAR/Del/Exim/30/2024 dated 05.07.2024, in the matter of M/s Exim Incorporation, Delhi, which would squarely apply to the Applicant in the instant case. 1.28. Further, even as per General Rules of Interpretation (GIR) 3(a) of the Customs Tariff Act 1975, when the goods are classifiable under more than one Heading, the 'most specific description' is preferred. When, Section notes along with terms of heading and explanatory notes are examined for both Headings 0802 and 2008, it is observed that roasted nuts which include roasted betel nuts find a specific description in Heading 2008. Therefore, on the application of GIR 3(b), the subject goods merits classification under Heading 2008 and more specifically under Subheading 2008 19 20 as "Other roasted nuts and seeds". 1.29. The Applicant states that from all perspective namely taking recourse to HSN explanatory note to Tariff Heading 2008, High Court & Supreme Court judgme....
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....ve been received from the Customs Port Commissionerate of Bengaluru Customs, I proceed to decide the present application regarding classification of Roasted Areca nut (whole), Roasted Areca nut (cut) and Roasted 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 Roasted Areca nut (whole), Roasted Areca nut (split) and Roasted Areca nut (cut), under the first schedule of the Customs Tariff Act, 1975. 3.1. "As per the sub-rule 19 of the CAAR Regulation 2021 as provided under 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, Hearing of application ex parte. - Where on the day fixed for hearing or any other day to which the case is adjourned, the applicant or the Principal Commissioner or Commissioner does not appear in person or through an authorised representative when the application is called for hearing, the Authority may dispose of the application ex parte on merit: Provided that where an application has been disposed of 1[under this regulation]and the applicant or the Principal Commission....
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....t, 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 in to existence roasted nuts and I find that the processes mentioned in chapter 8 do not cover roasting process. 3.4. I also note on the 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 or to improve or maintain their appearance. The applicant in their application has declared that the objectives of the roasting are not as specified in the said note. Further, as per the above note, the processes that could be carried 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. Roasting, as submitted....
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....n 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." 3.7. 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 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." 3.8 The exact moisture content could only be achieved at through the laboratory testing and the finding that whether the nuts are being roasted or otherwise. The Port Authorities are free to seek any te....
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....d or misrepresentation of facts, the applicant shall be given a notice to explain as to why the ruling should not be declared void ab initio under sub-section (1) of section 28K. (3) The notice referred to in sub-regulation (2) to the applicant shall be in writing - (a) informing him of the grounds on which it is proposed to declare the advance ruling as void ab initio; (b) enclosing copies of the documents, if any, sought to be relied upon; (c) giving an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds for declaring the advance ruling void ab initio; and (d) giving a reasonable opportunity of being heard in person or through an authorised representative in the matter. (4) A copy of the notice with enclosures shall also be forwarded to the Principal Commissioner or Commissioner for comments, if any, and a reasonable opportunity shall also be given to the Principal Commissioner or Commissioner or his authorised representative of being heard before passing any order. (5) Where the Authority finds that the advance ruling was obtained by the ....