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2024 (12) TMI 1740
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....licant submitted as under: 1.1 That the applicant, M/s R V International, New Delhi is a proprietorship firm of Mr. Prabhjyot Singh Dang. The firm is duly registered with the respective statutory authorities viz. G.S.T. Department, Income Tax Department, DGFT Department, New Delhi etc. The Importer Exporter Code of the firm is 0513091645 and the GST number of the applicant is 07AGQPD1949R1ZN. The applicant has been regularly filing it statutory returns with the concerned departments and authorities. 1.2. That the applicant is in the process of setting up its business of trading / import of Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" (hereinafter referred to as the 'subject goods") to India. The appellant intends to import the said goods mainly from Myanmar, Thailand, Indonesia, Vietnam, Sri Lanka, UAE, Cambodia, Laos & Singapore into India. 1.3. 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 import the same into India and hence would like to have a proper understanding and ....
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....ut will become suitable for human consumption. With regards to the preservative treatment that are carried out on areca nuts, the Professor and Head of the Department of Food Process Engineering, College of Food and Dairy Technology, Koduveli, Chennai has issued a certificate clarifying the above. Thus it can be seen that the preservative treatment in this case is provisional and temporary and the preservatives can be removed before consumption of the areca nut. 1.8. That the abovementioned goods "Provisionally Preserved 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 t....
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....ed. In the process, by way of neutralization and after getting dissolved in water the benzoic acid get removed. In cases where nut is treated 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. 1.13. That in view of the above facts and legal provisions, the product "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". 1.14. 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 ....
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....R FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTIONS(S) ON WHICH ADVANCE RULING IS REQUIRED: - a. That the goods in question which is to be imported into India by the applicant will be Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split)" hence is rightly classifiable under Customs Tariff Heading 0812 and particularly 0812 90 90 of the First Schedule to the Customs Tariff Act, 1975" b. That the process mentioned in Annexure I, clearly shows that the product "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 chapte....
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.... this Hon'ble authority thereby seeking the subject goods under classification CTH 0812 and more particularly under the CTH 0812 90 90. 2. As per the provisions of CAAR Regulation, 2021, the complete application of the applicant was provided to the concerned custom port, i.e. Nhava Sheva-1, JNCH, Nhava Sheva and requested to furnish the requisite comment in the instant matter. The port authority vide letter dated 11.12.2024 furnished the requisite comments in the matter, wherein the port authority has opposed for the rulings in the instant matter. The comments of the port authority in the instant matter, are as under: 2.1 Comments on Point No. 1 to 8 of Form CAAR-I No comments. 2.2. Comments on Point No. 9 (Annexure I): Evidently, the recent judicial pronouncements elaborated in Para 5 below, on matters identical to the present case by the CESTAT and the Hon'ble Supreme Court have established a fresh interpretation and appreciation of the law. Article 141 of the Constitution mandates that law declared by the Hon'ble Supreme Court is binding on all courts. As per the proviso (b) to Section 28(I)(2) of Customs Act, 1962, the Advance ruling Authority shall not ....
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....2 as split/whole Areca nuts. 2.4. In this regard kind attention is invited to following Court/ tribunal case laws: (i) Hon'ble Supreme Court's in their decision dated 11-9-1979 in the case of D.S. Bist and Ors. [1979 (9) TMI 168 SUPREME COURT] has held that all agricultural produce undergoes some processing on or outside the farm in order to make it non- perishable, transportable, and marketable and just because processing is a bit longer or complicated wouldn't rob the produce of its agricultural character. (ii) Hon'ble CESTAT (Chennai), final order bearing nos. 40736- 40737/2021 dated 26-02- 2021, in Appeal Nos. C/40002- 40003/2021 (Appellants- M/s. ST Enterprises and M/s. Ayush Business Overseas, wherein Hon'ble CESTAT (Chennai), ordered that Betel nuts "whole" subjected to processes like de-husking, cleaning, boiling and drying, are classifiable under HS CODE 080280. The said order of Hon'ble CESTAT (Chennai) has been further endorsed by Hon'ble Supreme Court of India stating that they are not incline to interfere with the Hon'ble CESTAT, in Civil Appeal Nos. 850-51 of 2021-M/s. Ayush Business Overseas-vs- Commissioner of Cus....
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.... Ruling, New Delhi, ruled that (i) API Supari, (ii) Chikni Supari, (iii) Unflavoured Supari, (iv) Flavoured Supari and (v) Boiled Supari, are classifiable under Heading 0802 and not under sub- heading 2106930, since they have not attained the character of "preparation of betel nut" and betel nut remains the betel nut. The said advance ruling has been endorsed by Hon'ble High Court Delhi vide order dated 01.03.2023. (vii) Hon'ble High Court Delhi in M/s Great Nuts Impex Pvt. Ltd. Versus Commissioner of Customs Delhi & Ors vide order dated 01.03.2023 has decided the classification of "Betel nut product known as Supari" under 0802 and has observed that it would not be apposite to classify the products in question as those covered under Chapter 21 of the Customs Tariff. Further, as observed in Para 10 of Annexure-1 processing of goods as mentioned by the appellant involves Dehusking, peeling, splitting and then subject to heat treatment and then dried. Thereafter nuts are treated with sulphur dioxide gas or sodium benzonate solution. Hence as per chapter note of Chapter 8, which pertains to dried nuts, it retains....
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....ory notes: The areca/betel nut is specifically mentioned under subheading 080280 instead of 08129090. Therefore, Areca nuts having undergone heat treatment and sulphuring merits classification in CTH 080280. 2.6. Further, the duty structure in CTH 080280 and 08129090 is as Sr. No CTH BCD as per tariff Effective rate of BCD IGST Policy as on date 1 080280 100% 100% 5% Prohibited but free if CIF Value is Rs.351/- or above per Kg Tariff value is US $6552 PMT 2 08129090 30% 20% 5% Free 2.7 From the above table it appears the applicant is trying to get the goods betel nuts classified at the HS CODE 08129090 which has lower rate of duty and to avoid applicability of MIP and Tariff condition and is trying to evade the applicable customs duty. 2.8. Since the processes which the imported product have undergone multiple processes before the import as declared by the appellant in advance ruling application, the same cannot be verified with naked eyes. Hence samples are required to be sent to DYCC/CRCL for testing on following parameters: (i) The identity of goods with respect to genus and species and parts thereof. ....
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....on and the applicable duty structure, MIP condition, Chapter Notes and Tariff value it appears the applicant is trying to get the goods betel nuts classified at the HS Code 08129090 which has lower rate of duty when the same are rightly classifiable under HS Code 080280, as the appellant has sought the classification at the lower rate of duty. Therefore, CAAR is requested not to issue any ruling in this matter. Records of the personal hearing in the matter: - 3. In the instant case, the personal hearing could not be taken place, as the port authority has not requested for opportunity of personal hearing. Further, the Authorized Representative (AR) of the applicant was forwarded the port comments vide email dated 16.12.2024 and requested to intimate as to whether they want to avail opportunity of personal hearing in the matter. The AR of the applicant vides their email dated 19.12.2024 submitted additional submission and informed that the applicant does not want any further opportunity of personal hearing in above said instant matters and requested for taken the rebuttal and additional submissions, on record. Rebuttal and Additional Submission: 4. The A.R. of the applica....
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....ich 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 removed. In this process, by way of neutralisation and after getting dissolved in water the benzoic acid gets removed. g. In cases where the Areca Nuts is preserve....
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....grated, peeled or shelled. It should be noted that homogenisation, by itself, does not qualify a product of this Chapter for classification as a preparation of Chapter 20. " (viii) It is submitted that Heading 0812 of the First Schedule of the Customs Tariff Act, 1975 covers fruits and nuts provisionally preserved but unsuitable in that state for immediate consumption. Following are the four sub-headings under the Heading 0812: 0812 10 00 - Cherries 0812 90 - Other: 0812 90 10 --- Mango slices in brine 0812 90 90 --- Other The Note appearing below Heading 0812 of HSN Explanatory reads as under: "This heading applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation during transport or storage prior to (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." Such provisionally preserved areca nuts are not classifiable under Tariff Heading 0802. The relevant portion of Heading 0802 is as under: 0802 - Other nuts....
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....r these processes are not covered under Chapter 7, 8 or 11 of the Tariff. The Note 1 (a) to Chapter 20 of the Customs Tariff Act, 1975 is reproduced as under: "1. This Chapter does not cover: (a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11;" The relevant portion of Heading 2008 is as under: 2008 Fruit, 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. 20081930 Other nuts, otherwise prepared or preserved. The Note appearing below the Heading 2008 states that this heading covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in preceding headings of this Chapter. The products of this heading are generally put up in cans, jars or airtight containers, or in casks, barrels or similar containers. Hence, it can be seen that if Areca Nuts are provisionally preserved and hence are unfit for immediate cons....
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....ly preserved Areca Nuts in its original form which are to be used as starting material for manufacture of 'Pan Masala' or 'Supri' and not being preparation or product of 'Betel Nuts' would not find classification therein. The slacked lime powder or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution sprayed on the original form of Areca Nuts either in whole or split form, is only for the purpose of provisional preservation during storage and transport, and not with the intention to make Pan Masala or Supari preparation. (xv) Moreover, such preservative chemicals are required to be removed by simple process of water washing or treating with Sodium bi-carbonate or Hydrogen Peroxide, before actual consumption of such provisionally preserved areca nuts into its edible form/preparation. Reliance is placed on ruling in the matter of Hi-Tech Print Systems -Ruling No. CAAR/Mum/ARC/42/2023. The relevant portion of the said ruling is extracted as under: "6.4 From the submission of the applicant I find that the subject product is treated with sulphurdi-oxide gas or sodium benzoate solution before packing and export for preservation. The ....
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.... preserved with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution' imported from Indonesia would be classifiable under Chapter Heading 0812 and more specifically under sub- heading 08129090 of the First Schedule of the Customs Tariff Act, 1975. It is further submitted that in an application of the applicant having application no. 89/2014 dated 23.09.2024, in respect of the same goods in question i.e. Provisional Preserved Areca Nuts, a personal hearing was conducted wherein the AR of the applicant attended the same and submitted additional submission and accordingly, the ruling no. CAAR/Del/RV Intl./75/2024 dated 01.11.2024 has been pronounced. It is humbly prayed that the applicant do not want any further personal hearing in this matter and most humbly prayed that this Hon'ble Advance Ruling Authority may kindly take the aforesaid additional submissions on record along with the Advance Ruling passed by the Authority of Advance Ruling New Delhi and Mumbai, into consideration while passing orders in the interest of justice. Findings, Discussion and Conclusion 5.1. I have taken into consideration of all the materials pla....
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....uts 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." Following are the four sub-headings under CTH 0812 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 In view of the process carried out by the applicant reproduced in para 1.11 and para 4(e) supra, 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. 5.5. The Heading 0812 applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation du....