TaxTMI 
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2024 (11) TMI 1619
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....ane, 1 Babg Linchi RD, Thungmahamek, Sathan, Bangkok- 10120, Thailand is a registered company having its registered office at 140/7, Soi Nabg Linchi 6 Lane, 1 Babg Linchi RD, Thungmahamek, Sathan, Bangkok- 10120, Thailand and is represented herein by Mr. Phumravit Chaiyaponggosone. The company is a reputed company and based in Thailand and duly registered with the respective statutory authorities at Thailand and other tax departments. The company is in the business of trading, import and export of various item and commodities. 2. That the applicant is in the process of setting up its business of trading /export of (1) Menthol Scented Supari and (2) Flavored and coated Illaichi (hereinafter referred to as the 'subject goods") to India for use in mouth freshener. The appellant intends to export the said goods mainly from Burma (Myanmar), Indonesia, Malaysia, Sri Lanka, Thailand, Cambodia, UAE and Singapore etc. to India. 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 export the same to India and hence would ....
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.... flavors e.g., Menthol, Spices, sweetening agents etc. in desired quantities along with liquid flavours (as and if desired) and edible oil are mixed in automatic mega size Blenders, (xii) Packaging in industrial packs of 5kgs to 80kgs as per requirement. (xiii) This process however, does not contain any materials like Lime, Katha (catechu) and tobacco. 7. That thus, the raw material i.e. betel nut, thus undergoes a substantial change in its appearance as well as in its chemical characteristics on account of various processes mentioned herein above and thus the tannin and arecoline and other content of raw betel nut/areca nut get substantially changed and therefore, after process as mentioned herein above on the betel nut, it become a distinctive product of betel nut which is processed and prepared and thus making it suitable for immediate consumption also. 8. That as per the supplementary notes (2) of Chapter 21 of Customs Tariff Act, 1975, "Betel nut product known as Supari" means "any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha and tobacco whether or not contai....
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....ms Tariff Act, 1975. 1.2.4. That in terms of the indicated additives like flavours and menthol etc., the product is classifiable under 2106.90.30 in terms of Supplementary Note 5(b) to Chapter 21 which reads as: Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; However, as per the Explanatory Notes to Chapter 08, 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 excluded from chapter 8 (and will fall under Chapter 21). Therefore the processes mentioned in Chapter 08 are absolutely different from the processes performed on the subject goods; they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975. 1.2.5. That for the purpose of classification of the goods, the Explanatory ....
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.... applicable to the present case by virtue of legal framework as discussed herein above. Classification and applicable rate of duty under GST are clarified in the paras reproduced from the CBIC Circular No. 163/19/2021-GST dated 06.10.2021 from F. No. 190354/206/2021-TRU. By virtue of application of section 3(7) of the Customs Tariff Act, 1975 "any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty percent as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) for sub-section (8A), as the case may be." Based on the contents of the CBIC Circular No. 163/19/2021-GST dated 6th October, 2021, it is clear that the provision of section 3(7) of the Customs Tariff Act, 1975 applies to scented supari classifiable under CTH 2106 90 30. In the instant case, menthol scented supari does not contain lime, katha (catechu) and tobacco and it will specifically contain menthol, Cyperus scariosus (Nagarmotha Oil) Gulab oil, Cardmom, Clove oil, Pacholi oil, Liquorice (Mulethi), etc. T....
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....ad with para 7 of CBIC circular No. 163/19/2021-GST dated 06.10.2021, same merits to be classified under Tariff Heading 2106 9099. VALUE ADDITION 1.3. That it is submitted that for both the products e.g., (a) Menthol/Scented cutting supari and (b) Flavoured and coated Illaichi, the manufacturing process involves intricate and skilled manufacturing process on raw produce the value of the processed materials is enhanced at each and every stage. For example, the refining stage improves the quality of major inputs. The sweetening and blending stage require use of costly raw materials like fragrances and flavours which enhances the manufacturing cost. THE PREPARATION 1.4. That the process before blending mainly adds quality and shelf life. While blending, the fragrance imparts a distinct function and nature to the finished articles which have than the major function as suppression of bad mouth odour. In this process while the lipids of fragrances retain flavour, the sweetening agents remain inert till mixed with saliva. The water in saliva after mixing with the sweetening agents releases the retained flavours in mouth which suppresses bad mouth odours. ....
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....catory acceptance of Central Government through its board circular and the homogenous adaptation of Customs Tariff Act for classification and interpretation makes it amply clear that the classification of any product under Customs and GST has to remain same for all purposes in both laws. This would also be required with a view that while filing a bill of entry, a product cannot be classified in two different headings for the purpose of charging basic customs duty and IGST. 1.7.3. That a legal framework governed by Customs Tariff Act, 1975, specifically section 3(7), Chapter notes of Chapters 8, 9 and 21, section notes, supplementary notes of chapter 8 of the Customs Tariff Act, 1975 and CBIC Circular No. 163/19/2021-GST dated 06.10.2021 issued based on the recommendations of the GST Council in its 45th meeting held on 17.09.2021 clarifying classification aspects related to both the products covered in the instant application and explanations (iii) and (iv) of the IGST rate notification vide entry at S. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28-6-2017, amended from time to time. Therefore it can be seen that both these products will be subjecte....
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.... 1.12. In this classification the word 'preparation' is a guiding factor. The applicant has explained the detailed process carried out on the raw products i.e., betel nut and cardamom (illaichi). These processes as described and carried out on the subject products are essential for the preparation of the subject goods as mouth freshener and goods after being subjected to such processes cannot be ordinarily used for any other purpose. The betel nut products commonly known as supari is covered under sub-heading 21069030 of this chapter. In this regard CBIC circular no. 163/19/2021-GST dated 06.10.2021for its claim to the classification of scented supari. 1.13. Insofar, as flavoured and coated illaichi (cardamom) is concerned, the contending classifications can come from the chapters 09 and 21 of the Customs Tariff Act, 1975. Chapter 09 covers Coffee, Tea, Mate and Spices and Heading 0908 covers Nutmeg, Mace and Cardamoms. The relevant extract from the Tariff headings in chapter 09 is reproduced below: - Cardamoms 0908 31 -- Neither crushed nor ground: 0908 31 10 --- Large (amomum) 0908 31 20 --- Small (ellettaria), alleppey green ....
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.... mandate that: 1. - This Chapter does not cover: (a) (a) Mixed vegetables of heading 07.12; (b) Roasted coffee substitutes containing coffee in any proportion (heading 09.01); (c) Flavoured tea (heading 09.02); (d) Spices or other products of headings 09.04 to 09.10; 2106 - Food preparations not elsewhere specified or included. 21061000 - Protein concentrates and textured protein substances 210690 - Others 21069020 - Pan Masala 21069090 - Betulnut product known as "Supari" 21069090 - Others. The Supplementary Note 5(b) to Chapter 21 reads as: "5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption". 1.14. That in fact for similar product, the Hon'ble Authority of CAAR, Mumbai has already fre f issued Ruling thereby declaring the above said goods falls under CTH 21 and not CTH 8. The said ruling has been given in the case of M/s BAG Industries, vide (2023) 2 Centax ....
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.... and not under CTH 08. e. That in fact for the similar product, this Hon'ble Authority has already issued Ruling thereby declaring the above said goods falls under CTH 21 and not CTH 08. The said ruling has been given in the case of M/s BAG Industries, vide (2023) 2 Centax 213 (A.A.R. - Cus. - Mum.)/2023 (384) E.L.T. 119 (A.A.R. - Cus. - Mum.) on 31-10- 2022 by CAAR, Mumbai. f. That the applicant has made the present application bonafide and seeks the kind indulgence of this Hon'ble authority thereby seeking the subject goods under classification CTH 21 and more particularly under the CTH 2106 90 30. Accordingly, it is prayed that this Hon'ble Advance Ruling Authority may kindly pass order for appropriate classification of the goods as explained herein above. 2. Comments of Customs Port Commissionerate, Chennai-II, Chennai. 2.1 The applicant M/s. Lujee International Company Ltd is proposing import of "Menthol Scented "Supari" under Customs Tariff Item 2106 9030 and "Flavoured and Coated Illaichi" under Customs Tariff Item 2106 9099 of the First Schedule of the Customs Tariff Act, 1975 and produced statement of relevant facts having bearing on ....
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....39;Betel Nut Product known as Supari' in terms of the supplementary Notes (2) to the Chapter 21: SUPPLEMENTARY NOTES: 2. In this chapter "betel nut product known as Supari" means any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copra or menthol. The process of cutting the betel nut into small pieces and adding menthol makes the item classifiable under the CTI 2106 9030 as per the Central Excise Tariff Act especially as per the amendment to the Central Excise Tariff Act vide Finance (No.2) Act, 2009 (Act No. 33 of 2009 dated 19th August 2009) made to the Chapter Note to Chapter 21: (2) in Chapter 21, after NOTE 5, the following NOTE shall be inserted, namely, - 6. In relation to product of tariff item 2106 90 30, the process of adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients other than lime, katha (catechu) or tobacco to betel nut, in any form, shall amount to "manufacture".". 2.4 In this regard, the comments of this office with regard to po....
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.... are squarely covered under the scope of Dried Nuts as defined under Chapter 8, except for adding of Menthol to the goods. Further, the addition of the Menthol does not alter the character of the goods viz., dried Areca/Betel Nut. 2.10 CLASSIFICATION OF THE IMPUGNED GOODS Legal Framework and Interpretative Rules A. General Rules for the Interpretation (GRI): The classification process is guided by six General Rules for the Interpretation of the Harmonized System. Of particular relevance to this case are: i. GRI 1: Classification is determined according to the terms of the headings and any relative Section or Chapter Notes. ii. GRI 3(a): The heading providing the most specific description shall be preferred to headings providing a more general description. iii. GRI 6: Classification in subheadings should be determined according to the terms of those subheadings, related subheading notes, and mutatis mutandis, to the above rules. B. Legal Notes: Chapter and Section Notes have the same legal force as the headings and subheadings themselves. Relevant notes include: a. Chapter 8 Note 1: "This Chapter does not cover inedible nuts or f....
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....ntary note defining "betel nut product known as Supari" under 21.06 appears to target more substantially prepared products, and not simply scented whole nuts. 2.11 In view of the above, it can be deduced that any preparation containing betel nuts should be read as any specially prepared substance which has betel nuts as constituent part in it. In accordance with Rule 1 of the General Rules for the Interpretation of the Harmonized System of Nomenclature, the goods in question appear to be most appropriately classifiable under Customs Tariff Item (CTI) 0802 8090. This classification is predicated on the principle that goods should be classified according to the terms of the headings and any relative Section or Chapter Notes. In this case, the specificity of heading 08.02, which explicitly covers "Other nuts, fresh or dried, whether or not shelled or peeled," provides a more precise description of the goods than alternative headings. 2.12 The matter of classifying Areca Nut 'whole' and Areca Nut 'split' in relation to 'Supari' has been definitively adjudicated by the Hon'ble Supreme Court of India. This jurisprudence serves as a crucial precedent in d....
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....haracteristics of Supari under CTH 2106, but rather align more closely with the category of other Areca Nuts of CTI 0802 8090. 2.16 Furthermore, it is noteworthy that the Importer appears to possess cognizance of the fact that their goods do not fall within the scope of food preparations as defined in Chapter 21. The strategic deployment of the descriptor "menthol scented supari," leveraging the term "Menthol" mentioned in the supplementary notes of Chapter 21, appears to be a calculated attempt to artificially situate the goods under CTH 2106. This linguistic manoeuvre seemingly aims to circumvent the Tariff Values imposed under CTSH 0802 80, raising questions about the good faith nature of the classification claim. 2.17 It is pertinent to note that the valuation of goods falling under CTSH 0802 80 is bound by sub- section (2) of Section 14 of the Customs Act, 1962 (52 of 1962). The Central Board of Indirect Taxes & Customs, being satisfied that it is necessary and expedient to do so, makes the periodical amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.36/2001-Customs (N.T.), dated the 3rd August 2001. Based on ....
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.... under CTH 2106.90.99. This classification aligns with CBIC Circular No. 163/19/2021-GST, dated 06.10.2021, which sets an 18% GST rate for such products. 2.20 In this regard, the comments of this office with regard to points raised by the applicant vide Annexure-1.& Annexure-2 of the application are given below: The claims made by the applicant and the ruling sought is devoid of merits and legally untenable on the following grounds: The primary issue under consideration is whether Flavored and Coated llaichi (cardamom), a product prepared with cardamom seeds coated with various additives, should be classified under CTI 0908 3190, which is the classification for cardamoms, neither crushed nor ground, or whether it should fall under Chapter 21 as a miscellaneous edible preparation. Legal Framework and Key Interpretative Principles: 2.21 GRI 1: This rule states that the classification of a product is determined by the terms of the headings and any relevant section or chapter notes. GRI 3(a): Where goods could fall under multiple headings, the more specific description is to be preferred. 2.22 Heading 0908 - Specific to Cardamoms Chapter 9 of the Customs Tariff ....
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.... the essential character is given by one or more species of any single one of the headings 09.04 to 09.10 (headings 09.04 to 09.10 as the case may be); ii. if the essential character is given by a mixture of species of two or more of the headings 09.04 to 09.10 (heading 09.10). This Chapter however excludes such mixtures if the essential character is not given by the species mentioned in (i) or by the mixtures referred to in (ii) above (heading 21.06). 2.26 The relevant extract of Chapter 21 Notes is reproduced below: 1. This Chapter does not cover: (d) spices or other products of headings 0904 to 0910; Interpretation of Essential Character 2.27 In the case of the Flavored and Coated llaichi, its essential character remains that of cardamom, as the processing is minimal and designed primarily to enhance the flavor and appearance of the cardamom seeds. According to jurisprudence on classification under the Harmonized System, the essential character of a product must be the primary consideration. The cardamom remains the dominant ingredient, and the flavoring and coating do not substantially alter its fundamental nature a....
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....n as SUPARI refers to any preparation containing betel nuts, excluding lime, katha (catechu), and tobacco, and may include other ingredients like cardamom, copra, or menthol. IV. The manufacturing process for Menthol Scented Supari (Nut-based mouth freshener, FSSAI category - 5.2.4.1) involves: Drying betel nuts, Manual removal of large impurities, De-stoning and metal detection, Automatic garbling, Polishing, Sterilization, Cutting, Removing weightless particles, Gravity separation, Roasting in a fire gas rotary roaster, Adding scents, flavors, and spices, Mixing with liquid flavors and edible oil in automatic blenders, Packaging in industrial packs (5-80 kg) etc. V. That it can clearly be seen from the above explanation that this process transforms the raw betel's appearance and chemical characteristics, altering its tannin and arecoline content and therefore the resulting product is a distinct, processed betel nut preparation suitable for immediate consumption. VI. As per the Customs Tariff Act, 1975, and the GST Council's decision (CBIC circular, October 2021), scented sweet supari falls under tariff item 2106 9030, attracting an 18% GST rate.....
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....spects. XII. That the judgements cited by the respondent are distinguished including the Apex Court ruling in Crane Betel Nuts case in view of the amendment to Chapter 21, of the Central Excise Act and the GST Supplementary Note 2 to Chapter 21, read with CBIC Circular No. 163/19/2021-GT dated 6-10-2021. XIII. That there has been a fundamental shift in the tax regime in view of Central Excise being replaced by Goods and Service Tax (GST), totally effacing the concept of manufacture in the area of tax and the product, Menthol Scented Supari also no longer coming under the purview of Central Excise Tariff Act, 1985, no duty is chargeable under the Act. XIV. That the reference to the HSN Explanatory Note to Chapter 8 was wholly misplaced as Rule (1) of the General Rule for Interpretation of Import Tariff makes it abundantly clear that for all legal purposes, classifications shall be determined according to the terms of the headings and any related Section or Chapter Notes. When the subject product was specifically defined under Supplementary Note 2 to Chapter 21 of the Customs Tariff Act, 1975, the classification can only be under Chapter 21 and the reliance....
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....s are, prima facie, classifiable under two or more headings, classification shall be effected as follows: a. The heading which provides the most specific descriptions shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only the materials or substances contained in mixed or composite goods or to part only of the items in a set up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them give a more complete or precise description of the goods. b. Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. c. When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. XVIII. The crucial aspect that needs to be addres....
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....ation to the inclusion of Supari under Supplementary Note 2 to Chapter 21 would defeat the object and purpose of its inclusion under Chapter 21 specifically. XXIII. Further in the HSN under Chapter 8, set out as general guidelines, when dealing with addition of sugar in small quantities, consciously nuts have been excluded and reference is made only to fruits. Therefore, this is yet another pointer that the Legislature was very clear in bringing Supari, a betel nut product, only under Chapter 21 and not Chapter 8. XIV. That the issue is also clinched from the fact that in Chapter 21, under the heading Food preparations not elsewhere specified or included also, under Tariff Item 21, 06, 90 and 30, Betel nut product known as Supari finds a specific entry/inclusion. XV. That the process involved and referred to in Chapter 8 as seen from Note 3 is relating to treating the dried nuts for preservation, stabilization and to improve or maintain the appearance and in such cases, even if the process involved moderate heat treatment, sulphuring or adding sorbic acid or potassium sorbate or vegetable oil or small quantity of glucose syrup, as long as the product reta....
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....only revolving around classification of Supari under Chapter 8 or Chapter 21 and the facts of the case before the Apex Court was entirely different and the issue was whether process involved in manufacture of sweetened betel nut pieces would result in a totally new product or not. XVII. That both the statutory enactments viz., Central Excise Tariff Act and the Customs Tariff Act operate in different spheres. In so far as the Central Excise Tariff Act, it deals with goods that are manufactured inside the Country and the tariffs applicable to various categories and products. In that context, process or manufacture involved assumes significance. However, under the Customs Tariff Act, the products are imported from foreign countries and therefore the significance attached to the concept of manufacture does not carry the same weightage as it does under the Central Excise Tariff Act. The Hon'ble Supreme Court in Crane Betel Nut Powder Works case was dealing with an issue that arose only under the Central Excise Tariff Act and not the Customs Tariff Act. The amendments also have been incorporated only under the Central Excise Tariff Act, clarifying that the process of adding ....
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....clusion 5. I have taken into consideration of all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have also taken consideration of comments of Customs Port Commissionerate Chennai-II (Import), Chennai in respect of application filed by the instant applicant. The applicant M/s. Lujee International Company Ltd is proposing import of "Menthol Scented Supari" under Customs Tariff Item 2106 9030 and "Flavoured and Coated Illaichi" under Customs Tariff Item 2106 9099 of the First Schedule of the Customs Tariff Act, 1975 and produced statement of relevant facts having bearing on the question raised and statement containing applicant's interpretation of law. A. Menthol Scented Supari 5.1 The applicant has sought the classification of the "Menthol Scented Supari" under Chapter 21 on the following, among other grounds: i. The raw betelnut/ areca nut is classifiable under the HS code 0802 80. ii Edible preparation of betel nut, i.e., betelnut product known as 'supari' is classifiable under the HS code 2106 9030. 5.2 The processing as mentioned by th....
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....rbic acid or potassium sorbet etc., or iii imparted treatments like addition of vegetable oil or glucose syrup etc. to improve or maintain their appearance. They remain classified under Chapter 8 only. Thus, any treatment which is either one of the processes mentioned in the said Chapter note to Chapter 8 or, is akin to such processes, will not take the classification of Betel Nut out of the purview of Chapter 8. It is also worthwhile to mention that the processes mentioned in Chapter notes 3(a) and 3(b), as reproduced in para above, are not exhaustive but only illustrative as the expression used in the bracket is "for example". Hence, all such processes, as are done for preservation or stabilization of Betel Nut or for maintaining or improving their appearance, will be covered under the ambit of Chapter Note 3 of Chapter 8 and, hence the betel nut, having undergone such processes, will continue to be covered under Chapter 8. 5.6 From the processes detailed in para 5.1 above, to obtain menthol scented supari, betel nut is dried, de-stoned (removal of metal item), garbled, polished, sterilized for cleaning and to remove bacterial count. The cleaned betel nuts are then cut and roa....
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.... 9 CAAR/Del/UBS Exports/23/2021 M/s. UBS Exports International Pvt Ltd, 10 CAAR/Del/Vaibhav/21/2021 M/s. Vaibhav Enterprises 11 CAAR/Mum/ARC/3/2021 M/s Samreen International Pvt Ltd. 12 CAAR/Mum/ARC/5&6/2021 M/s SRG Enterprises & M/s SYM Company 13 CAAR/Mum/ARC/9 & 10/2021 M/s BMG Corporation, M/s Bhagwan Corporation. 14 CAAR/Mum/ARC/12/2021 M/s Zaveri Enterprises 15 CAAR/Del/Morchhadi Traders/07/2021 M/s Morchhadi Traders 16 CAAR/Del/Naman Agri/09/2021 M/s Naman Agri Impex Pvt Ltd 17 CAAR/Del/The Nut/10/2021 M/s The Nut Company 18 CAAR/Del/Tirupati/12/2021 M/s Shri Tirupati Balaji Overseas 19 CAAR/Del/Shreedhra/07/2022 M/s Shreedhra Agro LLP 5.10 Also, Hon'ble Delhi High Court's vide its order dated 01.03.2023 in case of M/s Great Nuts Impex Pvt. Ltd & M/s The Nut Co Vs Commissioner of Customs Delhi & Ors. (CUSAA17/2022 & CUSAA18/2022 respectively) is noteworthy to mention. The Hon'ble High Court upheld the view taken by CAAR (Customs Authority for Advance Rulings) in case of M/s Great Nuts Impex Pvt Ltd & M/s The Nut Co wherein it was ruled that the goods (i) ....
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....ain any other ingredients, such as cardamom, copra or menthol Further, as per Note 3 of Chapter 8, the ambit of the classification under Chapter 8 is defined as follows: "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." Whereas, the processes listed out by the Importer for arriving at the impugned goods are squarely covered under the scope of Dried Nuts as defined under Chapter 8, except for adding of Menthol to the goods. Further, the addition of the Menthol does not alter the character of the goods viz., dried Areca/Betel Nut. 5.12 As far as the General Rules for the Interpretation (GRI) is concerned, the classification process is guided by six GRIs of the Harmonized System of Nomenclature (HSN), out of which, particular relevanc....
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....icularly instructive. This decision, which relied upon the seminal case of M/s Crane Betel Nut Powder Works vs Commissioner - 2007 (210) E.L.T. 171 (S.C.), established that: "Imported betel nuts 'whole' that have undergone processes such as de- husking, cleaning, boiling, and drying are to be classified under Tariff Item 0802 80 10 of the Customs Tariff Act, 1975, as betel nut 'whole'. Significantly, such processing does not warrant classification under Tariff Item 2106 90 30 as a betel nut product known as 'supari'." The legal weight of this CESTAT order was further reinforced by its subsequent affirmation by the Hon'ble Supreme Court [2021 (378) ELT A142 (Supreme Court)], thus establishing a binding precedent on the matter. This classification is in compliance with principle of specificity, aligns with the allowances for minor treatments in Chapter 8, and recognizes that the essential character of the product remains that of a nut rather than a prepared food item. B. Flavoured and Coated Illaichi 5.16 The Applicant further sought the classification of the "Flavoured and Coated Illaichi" under Chapter 21 on the following, among other g....
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....s neither crushed nor ground, while subheading 0908 3190 refers to other cardamoms that do not fit into specified categories. 5.19 As far as the characteristics of the product is concerned, the product under discussion consists of cardamom seeds, coated with various ingredients like silver leaf, saffron, sweeteners, and aromatic additives. However, the core ingredient remains cardamom, with these additional elements meant to enhance the flavor and appearance for use as a mouth freshener. 5.20 Looking at the competing Chapter 9 vs. Chapter 21, Chapter 9 covers spices, with cardamom being one of the items classified under this heading. Chapter 9 permits minor treatments of spices, such as coating and adding flavoring, without altering their essential characteristics as spices. The relevant explanatory notes confirm that mixtures of spices, even if subjected to additional processing (e.g., coating), can still be classified within Chapter 9 as long as they retain their essential spice characteristics. Whereas, Chapter 21 covers miscellaneous edible preparations not elsewhere specified, and CTI 2106 deals with food preparations that cannot be classified in any other specific headi....