TaxTMI 
TaxTMI 
2024 (7) TMI 1820
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....pplicant intends to import "Roasted Areca Nuts (Whole), Roasted Areca Nuts (Split) and Roasted Areca Nuts (Cut)" from Myanmar, Indonesia, Sri Lanka, Thailand, UAE and Singapore etc. 1.1. That the applicant is approaching this Hon'ble Authority, seeking advance ruling qua the goods as mentioned in the following paras as applicant intends to import the same and hence would like to have a proper understanding and clarification as to whether the goods being ported shall be covered under a particular classification or the other. 1.2. That the nomenclature and details of the goods being sought to be imported by the applicant are as under: - (i) Roasted Areca Nuts (whole) (ii) Roasted Areca Nuts (Split) (iii) Roasted Areca Nuts (cut) 1.3 That the processes, carried out on the Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) are as under: - a. De-husking the raw betel/ areca nut and drying the same before being fed into the roasting oven; b. Feeding the fresh areca nuts into a seed roasting oven, heating up the betel nuts would be roasted well beyond 100 degree Celsius, usually in the range of 130-150....
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.... as provided for in the headings of this Chapter, and are therefore excluded from chapter 8 (and will fall under Chapter 20). 1.8 The processes mentioned in Chapter 8 are different from the processes performed on impugned goods; they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as "Tariff"). 1.9 It is submitted that for the purpose of classification of goods the Explanatory notes are guiding factors wherever any dispute arises while interpretating the classification of particulars chapters or in case of similar or competing entries and this has been held time and again in catena of judgments by the Hon'ble Courts in India in the matters of L.M.L. Ltd. Versus Commissioner of Customs Reported in 2010 (258) E.L.T 321 (S.C), Holostick India Ltd. Versus Commissioner of Central Excise, Noida Reported in 2015 (318) E.L.T 529 (S.C), Collector of Central Excise, Shillong Versus Wood Craft Products Ltd. Reported in 1995 (77) E.L.T. 23 (S.C.). 1.10 That in fact for similar product Ruling No. CAAR/Mum/ARC/39,40&41/2023 dated 07.12.2022 passed in the matter of M/s. Universal Impex, Mumbai Vs. the Commission....
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....of question(s) on which Advance Rulings is required, as under: a. That the goods in question which are to be imported by the applicant is Roasted Betel Nut and hence should rightly be classifiable under CTH 2008 and more particularly in 20081920. b. That as per the explanatory note to Chapter 8 fruit and nuts of this Chapter remain classified here even if put up in airtight packing (e.g., dried prunes, dried nuts in cans). In most cases, however, products put up in these packing have been prepared or preserved otherwise than as provided for in the headings of this Chapter, and are therefore excluded from Chapter 8 and therefore will fall under Chapter 20. c. That as the processes mentioned in Chapter 8 are different from the processes performed on the goods intended to be imported by the applicant, they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as 'Tariff). d. That there is specific entry for the goods i.e. Roasted Nuts as given under CTH 2008- Fruit, Nuts and other Edible Parts of Plants, otherwise prepared or preserved, whether or not containing added sugar or ot....
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....position of an ash-like substance on the outer surface of the betel nut. The Otannin and arecoline content of raw betel nut/ areca nut gets substantially changed by subjecting the same to roasting. Therefore, roasted betel nut is a distinctive product of betel nut making it suitable for immediate consumption. The roasting is not aimed at additional preservation or stabilization or to improve or maintain their appearance. h. That in this regard applicant takes support from the article titled "Estimation of arecoline content of various forms of areca nut preparations by high-pressure thin-layer chromatography" which throws light on the chemical composition of various forms of areca nuts. As per the article, Polyphenols (flavonols, tannins) constitute a large proportion of the dry weight of the nut. Its content in areca nut may vary depending on the degree of maturity and its processing method. The tannin content is highest in unripe areca nuts and decreases significantly with increasing maturity. The roasted nut possesses the highest average 17/65 content of tannins, ranging from 5 to 41 % (mean, 1 .4%); the average tannin content of sun- dried nuts is 25%; and the lowest le....
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....ing the classification in respect of betel/ areca nut under CTH; that roasted betel /areca nut having been specifically classified under CTH 2008 19 20, the attempt to classify under CTH 08 02 80 would fall foul of the settled rule of construction that specific entry would prevail over general entry. Also it is held that HSN explanatory notes are normally a safe guide in determining classification under CTH. Roasted Areca / betel nut having mentioned in CTH 2008 19 20 under HSN the impugned Ruling is in consonance with HSN classification and that when there is a specific entry covering a product/ commodity, the test of common parlance is irrelevant in determining classification. Hence, the subject goods i.e. Roasted Areca Nuts are covered under the classification 2008 19 20 and cannot be covered under CTH 08 which stand has been taken by the customs authority before this Hon'ble Authority as well as before the Hon'ble High Court and their said contention has been rejected. m. That the applicant has made the present application bonafide and seeks the kind indulgence of this Hon'ble authority thereby seeking the subject goods under classification CTH 20 and more ....
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....ct of Customs port Commissionerate of Patparganj, New Delhi; ICD, Tughlakabad, New Delhi; NS-1 Mumbai; and Mundra and informed that he does not want any opportunity of personal hearing in above said instant matters and requested for taken the additional submissions on record. 5. The additional submissions of the AR of the applicant, is under: i. That it is submitted that roasting is falls under the process of Moderate Heat Treatment which mentioned under Chapter Note 3 of Chapter 8 which examined as under and found that the term "Moderate heat Treatment" moisture content in 'Raw areca nut' is anywhere between 10% to 15%. After, the process of drying the moisture content is reduced to a maximum of 6% to 7%. Further any amount of drying or moderate heat treatment cannot remove the moisture content below the said level of 6%. Further, only by the process of roasting, by use of roasting ovens / furnace, the moisture content in "Roasted Areca Nut" is brought below 4% by process of competing of multiple cycle of heating and cooling of the nuts at room temperature. The roasting of the nuts also made it crispy by changing its internal structure as well as chemical chang....
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....treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat- roasting referred in chapter 20. The terms dry-roasting, oil roasting and fat- roasting however are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that "the commonly accepted sense of a term should prevail in construing the description of an article of food In common trade parlance, "drying is a method of food preservation by the removal of water content. On the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process completed in multiple cycles of process of heating and cooling. v. That on examining the scope of CTH 2008 it is found that, as per HSN Explanatory Notes, head....
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....ted to the aforesaid containers. Moreover, the packaging of a product, cannot decide the description of the goods, which would lead to absurdity. Further, the packaging is made to prevent the goods from deterioration and enable easy access to marketability. Once, the product/goods is unaffected by outside parameters of nature, the packaging heed not be in airtight containers. Further, packaging is a means of convenience and no other significance can be attached to it. viii. That the vital question as to whether roasted nuts would fall under Chapter 0802 or Chapter 008 was affirmatively answered in favour of Chapter 2008 by the decision of Hon'ble Supreme Court in the case of Commissioner of Customs & Central Excise, Goa vs Phil Corporation Ltd. reported in 2008 (223) EL.T9/S.C. Hence, the settled position of law is that nuts falling under Chapter 08 would be classified under Chapter 20, if the same is subjected to the process of roasting. ix. That the classification as far as possible must be in conformity and in consonance with the HSN explanatory Notes. The law says that whenever there is specific entry, the same would prevail over general entry; the said ge....
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....h the Customs Tariff Act, 1975 and GST Tariff Act, 2017. xii. That it is submitted that the betel nut in its various forms finds classification in chapters 8, 20 and 21 of the schedule I of the Customs Tariff Act, 1975 read with HSN Explanatory notes to the relevant headings under these chapters. General Rules of Interpretation (GRI), specifically rule 1 and rule 3(a), to the Customs Tariff Act, 1975 provide further context for understanding of various tariff entries in the Tariff. The legal framework mentioned above has to be factored in while deciding classification of roasted arena nut which is proposed to be imported by the applicant. xiii. That the judgement of M/s Crane Betel nut judgment of the apex court cannot be applicable in case of present application due to legislative change in the Central Excise Tariff subsequent to M/s Crane Betel nut Powder Work's judgment, and for deciding the classification under chapter 20 as the legal dispute in that case involved a classification of variants of betel nut between chapters 8 and 21, and also due to availability of commodity specific SC judgments (1) Amrit Agro Industries Ltd. & Anr. v. Commissioner of Centr....
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.... roasted nuts and seeds", xvii. That it is submitted that in view of specific CTH 2008 19 20: Other roasted nuts & seeds in chapter 20 of the first schedule to the Customs Tariff, HSN Explanatory note to CTH 2008, various Supreme Court rulings upholding guiding value of the HSN Explanatory notes for deciding classification under Customs Tariff Act, 1975 and previously mentioned two Supreme Court judgments classifying roasted nuts which include almonds, betel nut and other nuts under chapter 20 by taking recourse to HSN explanatory note to Tariff Heading 2008. In view of the above, it is submitted that roasted betel nuts are correctly classifiable under the tariff item 2008 19 20 of chapter 20 of the first schedule of the Customs Tariff Act, 1975. xviii. That on the basis of foregoing it is submitted that the Roasted betel nuts fall under Tariff heading 2008, specifically under Tariff entry 2008 1920: "Other roasted nuts & seeds of chapter 20 of the first schedule of the Customs Tariff Act, 1975. Findings, Discussion and Conclusion 6. I have taken into consideration of all the materials placed on record in respect of the subject goods including the submission....
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...., 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that "the commonly accepted sense of a term should prevail in construing the description of an article of food". In common trade parlance, "drying" is a method of food preservation by the removal of water content. On the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process". 6.3. I also note that Chapter 20 of the Tariff covers the Preparations of vegetables, fruits, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified i....
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....explanatory note states that almonds. ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. Dry-roasting, oil-roasting & fat-roasting, as a process, are very much a part of chapter heading 2008 by virtue of HSN Explanatory Notes. It is also pertinent to observe that none of these processes are mentioned in the Chapter Note 3 to Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802. 6.6. Moreover, it is, an established fact that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Tariff Act. While delivering Phil Corporation Judgment Honourable Supreme Court has clearly spelt out importance of HSN Explanatory notes in deciding the matters of classification placing reliance on the judgment of Supreme Court in the case of Collector of Central Excise, Shillong v. Wood Craft Products Ltd. (1995) 3 SCC 454. Honourable Supreme Court in paragraph 12 of the said judgment observed as under: "Accordingly, for resolving any dispute relating ....