TaxTMI 
TaxTMI 
2024 (12) TMI 1741
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.... (Whole) and Provisional 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 Arecaceae family. The fruit (nut) of this tree is popularly known as betel nut or "supari" in Indi....
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.... 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 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 ....
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....plit)" are classifiable 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 re....
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....duct "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 -: 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....
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....d for not to issue the 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: 2.1 The counter-reply challenging the applicant's claim that "Provisionally Preserved Areca Nuts (Whole and Split)" should be classified under CTH 0812 90 90. Based on detailed reasoning and analysis of the relevant provisions of the Customs Tariff Act, 1975, we contend that the correct classification of the product is under CTH 0802. 1. Classification Framework for Areca Nuts (Betel Nuts) The Customs Tariff Act provides clear guidelines for the classification of goods based on their characteristics and processes applied to them. Areca nuts, commonly known as betel nuts, are explicitly mentioned in CTH 0802 under the heading: * 0802: "Other nuts, whether or not shelled or peeled, fresh or dried." Sub-heading 0802 includes areca nuts as a distinct product, signifying their special treatment within the Customs Tariff. The processes outlined in the applicant's submission, such as peeling, splitting, drying, and applying preservatives, do not alter the inherent n....
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.... Instead, precedence exists for areca nuts being classified under CTH 0802, where the product retains its primary identity as areca nuts despite minor processing. Specific rulings and Explanatory Notes to the Harmonized System (HS) emphasize that products explicitly covered under a particular heading (such as 0802 for areca nuts) cannot be shifted to broader or general headings like 0812 unless substantial transformation has occurred. 2.3. Application of Rule 1 of the General Interpretative Rules (GIR) As per Rule 1 of the GIR, classification is determined by the terms of the headings and relevant Section or Chapter Notes. Heading 0802 explicitly covers areca nuts, whether fresh, dried, or shelled, and remains applicable even after minor preservation processes like sulphur dioxide treatment or sodium benzoate application. These processes do not change the fundamental identity of the nuts. By contrast, CTH 0812 pertains to a broader category of provisionally preserved products where specific identification or usage as a distinct good (e.g., areca nuts) is absent. 2.4. Summary of Grounds for Classification under CTH 0802 1. Explicit Mention: Areca nuts are expres....
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....ovisionally Preserved Areca Nuts (Split)" under Customs Tariff Heading 0802 instead of CTH 0812 90 90, as the product's essential characteristics and preservation processes align more closely with the scope and description of CTH 0802. 2. Mandate Testing for Objective Analysis Direct that the product be tested by competent authorities such as the Central Revenue Control Laboratory (CRCL) and the Food Safety and Standards Authority of India (FSSAI) to ascertain: *The impact of the preservation process on the product's suitability for immediate consumption. * Whether the product retains its essential characteristics of areca nuts as defined under CTH 0802. In light of the above, this Hon'ble Authority is most humbly requested to pass an appropriate advance ruling classifying the goods under CTH 0802 of the Customs Tariff Act, 1975, in the interest of ensuring accurate and just interpretation of tariff laws. Records of the personal hearing in the matter: - 3. In the instant case, the personal hearing could not be conducted as the applicant vide email dated 22.12.2024 informed that the applicant do not want any further pers....
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....ng antibacterial material. It improves the absorption of the alkaloid stimulants of the Areca Nut into the bloodstream; or b. Treating with 1% Bordeaux solution, which is a simple mixture of copper sulphate (1part) + Lime (I-part) with water (100-parts) with neutral pH, and is an excellent antifungal and anti-bacterial solution to preserve from fungus and bacteria while in storage. It is sprayed on the Areca Nut during the drying process; or c. Treatment with Sulphur di-oxide or Sodium Benzoate solution having antibacterial and antifungal properties. d. The preservatives can be removed before use of the Areca Nuts through simple processes. In case of treatment with lime or slacked lime, the traces thereof on Areca Nuts can be removed by subjecting it to water treatment (thorough 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....
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....tory use upon simple cleaning or treatment. This is not simply cleaning or treatment but is going through a chemical changing process for removing of the chemicals which were used in that preservation of the goods. The port authority erred in interpretation. vii. 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 in that state. viii. It is submitted that Chapter 8 of the Customs Tariff Act, 1975 covers edible fruit and nuts, peel of citrus fruits or melons. Chapter Note 3 to Chapter 8 ibid reads as follows: "3. 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....
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....nder 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 classification under Heading 0812. xi. It is submitted that the product, Areca Nuts (Whole & Half Split/Cut form) provisionally preserved and treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, cannot be classified under Chapter 20 of the Customs Tariff Act, 1975. The Heading 2008 contains Nuts which are prepared or preserved and even then, edible in nature (fit for immedia....
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....ags/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. xiv. 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. Therefore, Areca Nuts treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution, shall not find classification under Chapter 21 of the Customs Tariff Act, 1975. The relevant portion of Heading 2106 is as under: 2106 -- Food preparations not elsewhere specified or included 21069030 Betel Nut product known as "Supar" Supplementary Note 1 of Chapter 21 of the Customs Tar....
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....o 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 spoiled during transportation. These preserved products might have higher levels of S02 or Benzoic acid And they can be safely treated with Sodium Bi Carbonate (NaHC03) and washed with plain water to remove the excess of Benzoic Acid, Benzoic acid gets neutralized to Sodium Benzoate in the process easily get dissolved in water and can be removed easily. Similarly, products preserved with Sulphur-di-oxide can be treated with Hydrogen pe....
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....nerally 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 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" The Chapt....
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..../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" (w.e.f. 25.07.2022): "26. Declaration of advance ruling to be void in certain circumstances. - (1) Where it is brought to the notice of the Authority on a representation made by the Principal Commissioner or Commissioner concerned or otherwise that an advance ruling pronounced by it has been obtained by the applicant by fraud or misrepresentation of facts, the matter shall be examined by the Authority and any s....