AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1749
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....icant, 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. 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. 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 c....
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....e 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. 1.6. 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 that they retain the character of dried fruit or dried nu....
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....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. 1.11. 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". 1.12. 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 ....
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....UESTIONS(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 chapter 8 reads as follow -: 3. Dried Fruits or d....
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....ect 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. ICD, TKD (Import), New Delhi and requested to furnish the requisite comment in the instant matter. The port authority vide letter dated 16.12.2024 furnished the requisite comments in the matter, wherein the port authority has requested 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....
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....itable for consumption but ensure safe storage during transit. Thus, Chapter Notes 3 and 4 do not support the applicant's argument for reclassification under CTH 0812. 2.2. Judicial Precedents Favoring Classification Under CTH 0802 The applicant cites rulings like CAAR/Mum/ARC/42/2023 and others to substantiate classification under CTH 0812. However, the facts and context of these rulings differ significantly from the present case: 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 a....
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....agencies will be instrumental in confirming the product's characteristics and the applicability of the relevant tariff headings, ensuring an informed and accurate classification. Prayer In view of the above submissions, it is most respectfully prayed that this Hon'ble Authority may kindly: 1. Determine the Appropriate Classification Declare the correct classification of "Provisionally Preserved Areca Nuts (Whole)" and "Provisionally 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&#....
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....licant M/s Lujee International Company Ltd. (hereinafter referred to as 'the Applicant') seeking classification under the Customs Tariff Act, 1975, of Provisionally preserved Areca Nuts (Whole & Half Split/Cut form) 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 import. 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 mostly used as masticatory. It is important to note that even the Explanatory Note to the Customs Tariff uses the term 'Areca Nut' or 'Betel Nut' interchangeably; iii. It is submitted that the Applicant intends to import Areca Nuts (Whole & Half Split/Cut form) provisionally preserved and treated/sprayed with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordea....
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....d 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. That it is submitted that the port authority of ICD TKD provided comments in respect of the applicant's application wherein the learned port authority opposed to pronouncing of rulings for the classification of Provisionally Preserved Areca Nut under CTH 0812 and emphasized for classification under CTH 0802 and submitted their ground for classification, which appears to be based on merely their imagination and without application of mind which is very far from the factual ground. The learned port authority has wrongly treated the instant goods as normal Areca Nut and recommended it's classifiable under CTH 0802 whereas the factual matrix is that the instant goods is not Areca nut but it is Provisionally preserved Areca nut which is classifiable under CTH 0812 instead of 0802 as per the Customs Tariff Act, 1975. The port authority wrongly represen....
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....rovisional 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. ' The relevant portion of HSN Explanatory notes of the Chapter 8 to the Customs Tariff Act, 1975 is reproduced as under: "Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, 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. " ix. 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....
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....or human consumption however, the products covered under Heading 2008 are edible and are fit for immediate human consumption as such even though subjected to preservation process. xiii. It is submitted that Preservation processes with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution make the Areca Nut non-edible or unfit for immediate consumption in such preserved condition, and moreover 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, wheth....
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....ng 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. xv. It is submitted that it can be seen from the above that only preparations containing Betel Nuts or products of Betel Nuts are classifiable under Heading 2106. Since the Applicant intends to import provisionally preserved Areca Nuts in its original form which are to be used as starting material for manufacture of 'Pan Masala' or 'Supari' 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. xvi. 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 ....
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....s, which decides the classification of 'Areca Nuts (Whole & Half Split/Cut form) provisionally preserved with slacked lime or Sulphur di-oxide or Sodium Benzoate solution or Bordeaux solution' under Tariff Item 08129090 of the First Schedule of the Customs Tariff Act, 1975. In view of the foregoing submissions, it is humbly submitted that the product, 'Areca Nuts (Whole & Half Split/Cut form) provisionally 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 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 m....
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....rved 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." 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....