TaxTMI 
TaxTMI 
2024 (11) TMI 1622
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....nal Preserved Areca nut (Split)" in India. The applicant submitted as under: 1.1. That the applicant is in the process of setting up its business of trading/Export of Provisionally Preserved Areca Nut (Whole) and provisionally preserved Areca Nut (Split) from Myanmar, Thailand, Indonesia, Vietnam, Sri Lanka, UAE, Cambodia, Laos & Singapore to India. 1.2. 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 imported shall be covered under a particular classification or the other. The nomenclature and details of the goods being sought to be imported by the applicant is Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)". 1.3. That Areca Nut is a tropical plant found all over South-East Asia. The tree belongs to the palm tree species and is from the Aceraceae family. The fruit (nut) of this tree is popularly known as betel nut or "supari" in India. The Areca nut is a....
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....ically 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 dried nut" Again, Chapter note (4) reads as follow :- (a) Heading 0812 applies to fruit and nuts which have been treated solely to ensure their provisional preservation during transport or storage prior to use (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." 1.8. That Heading 0812 covers fruits and nuts provisionally preserved but unsuitable in that s....
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.... under Customs Tariff Heading 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975". 1.13. 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 chapter 8 reads as follow -: 3. Dried Fruits or dried nuts of this Chapter may be partially rehydrated or treated for the following purposes: (c) For additional preservation or stabilization (for example, by moderate heat treatment, sulphuring, the addition of sorbic acid or potassium sorbate) (d) 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 charact....
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....lly 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 -: 3. Dried Fruits or dried nuts of this Chapter may be partially rehydrated or treated for the following purposes: (c) For additional preservation or stabilization (for example, by moderate heat treatment, sulphuring, the addition of sorbic acid or potassium sorbate) (d) 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 nut". ....
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....d for rejection of the application seeking rulings for classification of the goods in question under CTH 08129090 in the instant matter. The comments of the port authority in the instant matter, are under: The instant application 2.1. The applicant M/s. Lujee International Company Ltd., 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. Lujee International Company Ltd. 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. 2.3. They sought the classification of the "Provisionally Preserved Areca Nuts (Whole and Split)" under CTH 0812 on the following, among other grounds: a. The applicant has approached the Advance Ruling Authority for clarification regarding the classification of Provisionally Preserved Areca Nuts under the Customs Tariff Act, 1975. Specifica....
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....TH 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 Technology, Koduveli, Chennai, which confirms that the preservative treatments applied to the areca nuts are provisional and that the preservatives can be removed before consumption. This further supports their contention that the goods are provisionally preserved and unsuitable for immediate consumption, meeting the criteria for classification under CTH 0812. ....
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....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 benzoate solution falls within the scope of Note 3(a) of Chapter 08, which allows for additional preservation or stabilisation treatments, including sulphuring. This treatment does not necessarily render the goods classifiable under heading 0812. v. It is important to note that heading 0812 is specifically for "Fruit and nuts provisionally preserved, but unsuitable in that state for immediate consumption." However, the processes described by the i....
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....ription 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 Chapter 8 regarding heading 0812 does not preclude the classification of the goods under heading 0802. While heading 0812 does cover provisionally preserved fruits and nuts, it is intended for goods that are truly in a temporary state of preservation, unsuitable for immediate consumption. The dried areca nuts, even with preservative treatments, are more....
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....y also not requested for personal hearing in the matter. However, the A.R. of the applicant in his email dated 17.11.2024 forwarded additional submission in the matter. 3. The additional submission of the A.R. of the applicant, are, as under: i. This has reference to the above mentioned Applications for Advance Ruling under Section 28H of the Customs Act, 1962 filed by the applicant LUJEE INTERNATIONAL COMPANY LIMITED (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 export from overseas. ii. That it is submitted that Areca Nut is a tropical plant found all over South-East Asia. The tree belongs to the palm tree species and is from the Aceraceae family. The fruit of this tree is popularly known as the betel nut or 'supari' in India. Betel Nut is the kernel obtained from the fruit of Areca Nut palm. The Areca Nut is an important commercial plantation crop. It is mo....
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.... 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. v. 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. vi. It is submitted that the provisional preserved Areca Nuts should be classifiable under Chapter Heading 0812 of the First Schedule of the Customs Tariff Act, 1975 which includes Fruit and nuts provisionally preserved, but unsuitable in that state for immediate consumption, and more particularly under sub-heading 0812 9090, which would cover Areca Nuts that are provisionally preserved during transport or storage prior and not suitable for immediate consumption....
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....ved 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 ix. 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 consumption (not readily edible), are classifiable under Heading 0812 instead of Heading 0802 of the Customs Tariff Act, 1975. Hence, it can be seen that if Areca Nuts are not provisionally preserved and hence are fit for immediate consumption, it would find classification under Heading 0802 and contrary to that if the Areca Nuts are provisionally preserved due to which it is not fit for immediate consumption, it would find classificat....
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..... 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. xiii. 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 Act, 1975, whereas Areca Nuts treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, since not suitable for immediate consumption, wherein the identity of Betel Nut (Areca Nut) is not lost or transformed to any edible preparation, is neither 'Pan Masala' nor 'betel nut product known as Supari' as described in Supplementary Note 1 and 2 to Chapter 21 of the Customs Tariff. Therefor....
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.... 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 have reached a conclusion in the matter in respect of the questions asked in the CAAR- 1 application." It is submitted that the fruits and Nuts in general have a shorter life span and post-harvest they are preserved using preservatives like Benzoic Acid or Sulphur-di-Oxide gas which are basically used for inhibiting the growth of moulds and bacteria. The preservation process is done to ensure the fruits and nuts are not....
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....ut (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 nuts of this Chapter may be partially rehyd....
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....t 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. by reg. 12, ibid., for "under this rule" ....