TaxTMI 
TaxTMI 
2024 (8) TMI 1769
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....), Roasted Areca Nuts (Split) and Roasted Areca Nuts (Cut)" from Myanmar, Indonesia, Sri Lanka, Bangladesh, UAE and Singapore etc. The applicant submitted as under: 1.1 That the applicant, M/S. LUJEE INTERNATIONAL COMPANY LIMITED, 140/7, Soi Nabg Linchi 6 Lane, 1 Babg Linchi RD, Thungmahamek, Sathan, Bangkok- 10120, Thailand is a registered company having registered office at 140/7, Soi Nabg Linchi 6 Lane, 1 Babg Linchi RD, Thungmahamek, Sathan, Bangkok- 10120, Thailand and is represented by Mr. Phumravit Chaiyaponggosone. That the company is a reputed company based in Thailand and duly registered with the respective statutory authorities at Thailand and other t departments. 1.2. That the company is in the business of trading, import and export of various items. The applicant is in the process of setting up its business of trading/Export of Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) from Thailand, Burma (Mynmaar), Indonesia, Sri Lanka, Bangladesh, UAE and Singapore. 1.3. That the applicant is approaching this Hon'ble Authority, seeking advance ruling qua the goods as mentioned in the following paras as applican....
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....975. As per the HSN Explanatory Notes to Heading 2008, given below, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. 1.4.7. That the CTH headings describe as bellow: CTH 2008- Furit, 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 & CTH 2008 19 20- Other Roasted Nuts and seeds. 1.4.8. That as per the Explanatory Notes to Chapter 8, fruits 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 will fall under Chapter 20). 1.4.9. 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"). Further HSN explanatory note qua Chapter 20 explai....
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....bai, by way of a Civil Miscellaneous Appeal (CMA) No's 600/2023, No. 1206/2023 and No. 1750/2023, dated 01.08.2023 respectively before the Hon'ble Madras High Court, wherein the Division Bench of Hon'ble Madras High Court after elaborately hearing all the parties dismissed the CMA's of the Customs Department, thereby upholding the aforesaid ruling of the CAAR, Mumbai. 1.4.12 That Ruling No. CAAR/Del/Shree Durga/26, 27 & 28/2023 dated 17.11.2023 of Hon'ble Authority passed in the matter of M/s. Shree Durga Traders, Kolkata Vs the Commissioner of Customs (Preventive) Kolkata, The Principal Commissioner of Customs, Chennai II (Import) & The Principal Commissioner of Customs Nagpur in Application No. 22, 23 & 24/2023-DELHI O/o Commr-CAAR-NEW DELHI, where identical goods are held classifiable under 20081920. That Ruling No. CAAR/Mum/ARC/67/2023 dated 16.10.2023 of Hon'ble Authority passed in the matter of M/s. Shree Ganesh Traders, Chennai Vs. The Commissioner of Customs II (Import), Chennai, in Application No. CAAR/ CUS/APPL/95/2023-O/0 Commr-CAAR-MUMBAI, where identical goods are held classifiable under 20081920. 1.4.13 As per the interpretati....
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....t-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. f. That so far as the goods sought to be classified i.e. roasted areca nut these goods is chewed for a variety of reasons such as stress reliever, mouth freshener, concentration improver and digestive following food intake. a. The subject goods are specifically covered and are classifiable under CTH 2008 19 20 of the Customs Tariff Act, 1975. As per the HSN Explanatory Notes to Heading 2008, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. b. CHANGE IN THE BETEL NUT BY THE PROCESS OF ROASTING: With regard to the goods in question it is submitted that during the process of roasting, the roasting is done using firewood / palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius and as a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. c. That roasted betel nut undergoes a change in its appearance as well as in respect of its chemical characteristics on account of the roasting process. d. There....
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....e CAAR Mumbai has already issued a Ruling thereby declaring the above said goods falls under CTH 20 and particularly under CTH 200819 20 and not under CTH 8. The said ruling has been given in the case of in Ruling dated 07.12.2022 no. CAAR/Mum/ARC/44, 45 & 46/ 2022 in Application no. AAR/Cus/APPL/70,77 & 78/2022 - 0/o Commr-CAAR-Mumbai (Applicant-M/s Shahnaz Commodities International, Chennai) j. Further, in fact, the customs authority challenged the said Advance Ruling before the Hon'ble High Court of Madras vide CMA No. 600, 1206 and 1750 of 2023 - The Commissioner of Customs Chennai Vs. M/s Shahnaz Commodities International P. Ltd. However, the said case were rejected by the Hon'ble High Court vide its judgment dated 01.08.2023. k. The Hon'ble High Court has after considering all the other chapter including chapter 08, and chapter 21 of Customs Tariff and also considered the other rulings as submitted by the customs authority though qua other goods i.e. boiled areca nuts, API supari, unflavoured supari etc. l. It has been observed by the Hon'ble High Court that the Rulings of the Advance Ruling Authority did not deal with Roasted Areca ....
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....sted to furnish the requisite comment in the instant matter. However, unfortunately, the response from the Customs Port Commissionerate, has not been received in spite of multiple reminders issued to the Commissionerate of ICD, Tughlakabad (Import), New Delhi. 3. The instant applicant had filed five applications pertaining to five different Customs ports on the same matter and same goods for seeking of Rulings. The requisite comments from the Customs port Commissionerate of NS-1, JNCH, Maharashtra, received first, on the same issue and same goods and the personal hearing was conducted on 31.07.2024 and accordingly, rulings was pronounced. Thereafter, comments in respect of Customs ports Commissionerate of Visakhapatnam and Custom Port Commissionerate of Dadri have been received in the matter and action have been taken accordingly. The Custom Port Commissionerate of ICD, Tughlakabad (Import), New Delhi was also asked to provide the comments and to participate in the hearing, as the matter under consideration, was same, in filed all five applications. However, the Commissionerate did not participate in hearing, neither shared any comments in the matter. In this situation, the auth....
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.... nuts by reducing of arcoline by homarcoline. iv. That the process is not uncontrolled repeat roasting. The process is controlled to the extent of converting "Raw Areca Nut" to "Roasted Areca Nut" of given standard. The process is controlled as to not resulting in overcooking which would spoil the product. All imports are tested for FSSAI standards before clearance of home consumption and the applicants shall abide by all the laws of the land applicable on the products. The product under consideration is prepared with processes other than those Chapter Note 3 and is thus excluded from chapter 8 In terms of HSN General Exclusion Note 3 to Chapter 8. The process of roasting cannot be equated with the term drying as this would render the heading description "Roasted Nuts" of 2008.19.20 of schedule I to the Customs Tariff Act 1975, as otiose. v. That Chapter 20 of the Customs Tariff Act 1975, covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20 of the Customs Tariff Act 1975, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Ther....
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....vers 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 the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca for 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, is very much a part of chapter heading 2008 by virtue of HON Explanatory Notes. It is also pertinent to mention here that none of these processes are mentioned in the chapter note 3 of Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter heading 0802. viii. That Chapter 8 specifically certain treatments that could be carried out on the dried nuts for additional preservation or stabilization or to improve or maintain their appearance. The applicant in their application has declared that the objectives of the roasting are not as specified in the said note. Further, as....
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....uts. It is submitted that the issue dealt with i.e. Classification of "Roasted betel nuts" in the judgement of the Honourable High Court of Madras is of exactly the same issue that is impugned in this application and therefore is squarely applicable to this case. xi. 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 general principal is statutorily incorporated in General Rules of Interpretation, in particular, under Rule 3(a) of the General Rules of Interpretation. CTH 2008 1920 is a special entry covering nuts subject to the process of roasting when contrasted with CTH 08 02 90 which covers dried nuts. Having come to the conclusion that the classification of areca nuts is made on the basis of the process which it is subject to with a distinction between dried and roasted nut being maintained CTH 2008.19.20 which covers roasted nut including areca nut is a specific entry which opposed with the entries/items covering nuts under CTH 08. xii. That the Hon'ble Tribunal in respect of the case of M/....
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....t 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 Central Excise, Ghaziabad (2007) 201 ELT 183 (SC), and Commissioner of Customs & Central Excise vs Phil Corporation Ltd in Appeal (civil) 2215 of 2002 dated 07/02/2008 on the classification of roasted nuts under chapter 20 of Central Excise Tariff Act. xvi. That as per General Rules of Interpretation (GIR) 3(a) of the Customs Tariff Act 1975, when by application of GIR 2(b) or for any other reason, the goods are prime facie, classifiable under more than one Heading, the 'most specific description' is Section notes along with terms of heading and explanatory notes are examined for both Headings 0802 and 2008, it is observed that roasted nuts which include roasted betel nuts find a specific description in Heading 2008. Theref....
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....stoms (N.T.) dated 04.01.2021 as amended vide Notification No.63/2022- Customs (N.T.) dated 20.07.2022, Hearing of application ex parte. - Where on the day fixed for hearing or any other day to which the case is adjourned, the applicant or the Principal Commissioner or Commissioner does not appear in person or through an authorised representative when the application is called for hearing, the Authority may dispose of the application ex parte on merit: Provided that where an application has been disposed of 1[under this regulation]and the applicant or the Principal Commissioner or Commissioner, as the case may be, applies within seven days of receipt of a copy of the order or advance ruling and the Authority is satisfied that there was sufficient cause for his non-appearance when the application was called for hearing, the Authority may, after allowing the opposite party a reasonable opportunity of being heard, make an order setting aside the ex parte order or advance ruling and restore the application for fresh hearing." 6.2. I note that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifi....
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....atments that could be carried out on the dried nuts for additional preservation or stabilization or to improve or maintain their appearance. The applicant in their application has declared that the objectives of the roasting are not as specified in the said note. Further, as per the above note, the processes that could be carried out are moderate heat treatment, sulphuring, and the addition of sorbic acid or potassium sorbate by the addition of vegetable oil or small quantities of glucose syrup. Roasting is different from all the processes mentioned above. Roasting, as submitted by the applicant, is carried out using roasting ovens due to which betel nuts are roasted in the range of 150 degrees Celsius then cooled in room temperature and the cycle is repeated until the moisture content is less than 6 %. This clearly indicates that the roasting is much more than mild heat treatment. Even in the generally understood meaning of the terms, it is understood that roasting involves severe heat treatment and is different from moderate heat treatment as well as dehydration. Therefore, the impugned goods do not satisfy Note 3 to Chapter 8. 6.5. While examining the scope of CTH 2008, I fin....
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....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", I rule 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." 6.8. Also, the Hon'ble High Court of Madras in its recent judgement on Civil Miscellaneous Appeal (CMA) No's 600/2023, No. 1206/2023 and No. 1750/2023, dated 01.08.2023, had upheld the classification of Roasted Betel Nuts under CTH 2008 19 20. The Honourable High Court went on to analyse the various aspects in determining classification and summed up that: (a) Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH. (b) 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. (c) HSN Explanatory Notes are normally a ....