AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 1735
X X X X Extracts X X X X
X X X X Extracts X X X X
....g so, filed application for pronouncement of rulings for classification of the provisionally preserved Areca nut. The applicant submitted as under: 1.1. M/s Mystique Impex Private Limited (hereinafter referred to as the 'Applicant') is inter alia engaged in wholesale trade of Areca nuts (hereinafter referred to as the 'Areca Nuts' or 'Nuts'). The Applicant holds Importer Exporter Code ('IEC') # AAQCM8526J. 1.2. The Areca nuts (commonly known as 'Betel nut' or 'Supari) is the fruit of the areca palm (Areca catechu), found in tropical Pacific regions, South Asia, South-East Asia and part of East Africa. Areca nuts are primarily used as masticatory and are also essential requisite in various religious, social and cultural functions in India. The Applicant intends to import Areca Nuts (whole/ cut/ split) into India from countries like United Arab Emirates, Sri Lanka, Myanmar and Indonesia, for wholesale trade. The Areca nuts will be imported through various ports, which will be determined based on the commercial and business exigencies. 1.3 These Areca Nuts will be imported bulk packaging i.e., in packaging of 60/70/80 Kgs, rather....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... human consumption. The removal treatment will be performed in India. The Applicant may sell the Nuts with or without the removal treatment, in which case the buyers or other parties will perform the process. 1.7. The applicant seeks clarification on following specific queries: "What shall be the tariff classification. of Nuts that are temporarily preserved by adding preservatives (as stated in facts), such that the Nuts became unfit for immediate consumption in that state?" 1.8. The Applicant prima facie believes that the subject Areca nuts shall be classified under HS 08129090 which includes goods with following description: "Fruit and nuts provisionally preserved, but unsuitable in that state for immediate consumption: Other : Other" 1.9. In the following paragraphs, the Applicant submits as to why the said products should be classified as follows: a. The Applicant intends to import Nuts into India from United Arab Emirates, Sri Lanka, Myanmar and Indonesia. Due to their inherent properties, these Nuts are susceptible to the formation of fungus and moulds, which deteriorates the quality of Nuts and sometimes renders them inedible. b. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... where the supplier of the applicant used Sulphur-di-oxide and/ or Sodium Benzoate solution for preserving the areca nuts proposed for import. The CAR authority, in the instant case, classified the said areca nuts under HSN 08129090. j. The applicant also referred the ruling in case of M/s Vaibhav Enterprises [CAAR/ Del/ Vaibhav/ 12/2024] wherein similar decision was arrived at, by the CAR, Delhi] Similarly, in case of M/s Radiance Enterprises [CAAR/Mum/ARC/26/2024], areca nuts treated with Sorbic acid was categorized as 'provisionally preserved areca nuts', and thus, classified under heading 0812. k. Basis the above, the Applicant believes that it would be appropriate to classify the provisionally preserved Nuts under Chapter Heading 0812 and more specifically under sub- heading 08129090 of the First schedule of the Customs Tariff Act, 1975. l. However, for conformance, the Applicant requests this Hon'ble Customs Authority for Advance Rulings (AAR) to pronounce a ruling on this aspect, providing clarity on the questions/ concerns raised in this advance ruling application. 2. As per the provisions of CAAR Regulation, 2021, the complete appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss of benzoic acid or peroxides will get removed. Therefore, from the above it appears that no any very complex or specific process is required for making this preserved areca nuts (sought to be imported by importer) for making it edible after import. Therefore, it appears that it is rightly classifiable under 080280, not in 08129090, which is specific for those items which are when preserved not fit for consumable. Mere preservation with certain chemicals for the limited purpose of enhancing preservation or appearance or case of consumption per se does not result in obtaining a preparation of betel nut. Even after these processes the betel nuts retain the character of betel nut and do not qualify to be considered as preparation of betel nut. The goods do not change the Essential character. Therefore, they do not merit a change in classification from 080280 to 08129090. d. Several Advance ruling applications are filed for betel nut to avoid classification under chapter 08 to evade the restrictions of "Minimum Import Price" as well as "Tariff Rate" which is regularly revised by CBIC. It is pertinent to mention that the revision of Tariff value is on a continuous upward tren....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cannot be relied upon. The reliance on note 4 to Chapter 8 is conclusive in as much as in no ambiguous terms of it has clearly stated that Fruits 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." Following are the four sub-headings under CTH 0812: - Tariff Item Description of goods Unit 0812 10 00 - Cherries Kilograms (Kg.) 0812 90 - Other 0812 90 10 - Mango Slices in brine 0812 90 90 - Other The scope of Tariff Heading was further explained in note 4 to the Chapter 8. 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 In view of above, the provisionally preserved Areca Nuts....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (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" The Chapter note (3) specifies the physical status of the goods along with corresponding process that could be carried on those goods under this chapter. The areca/betel nut is mentioned in Heading 0802 as well as 0812. The explanatory note to Heading 0802 states that this heading also covers areca (betel) nuts used chiefly as a masticatory. One of the main uses of the goods under CTH 0802 is masticatory. 5.4. However, I find that the provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter Heading 0812 due to following Chapter Note. The Chapter note (4) reads as follow -: "4. 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.....