2021 (7) TMI 1114 - Commissioner - Customs

Classification of imported goods - Supari - reliability on the opinion of the FSSAI notified laboratory - reliability and completeness on the test report given by the CRCL (Central Revenues Control Laboratory), Chennai - validity of speaking orders - Whether the opinion of the FSSAI notified laboratory can be relied upon for classification of the imported goods? - HELD THAT - The report very clearly stated in its first page that the physical appearance of the betel nuts are Brown Colour Whole Nuts and in the page No. 3, the opinion has been given by the Lab stating that the sample description confirms to BETEL NUTS (BOILED SUPARI) as stated in the test memo. The FSSAI notified lab report can be considered only for the purpose of fitness for human consumption and it cannot be considered for the classification of the goods under the Customs Tariff Act. Therefore, the reliance by the appellants is not correct and totally misconceived. Whether the test report given by the CRCL (Central Revenues Control Laboratory), Chennai is complete and reliable? - HELD THAT - The supari which is the a processed betel nut cut into pieces at three stages, free of finer particles and roasted could only be considered as a product which will fall under CTH 21. Whereas, the appellants are clearly attempting to mislead the department that whole betel nut has to be treated as API Supari. They have not provided any kind of evidence to prove that what is known as API supari in the market parlance. It is also on record that M/s. Nadaraj International company Ltd., has issued identical type of certificate in the case of Commercial Invoice 03/2020 related to M/s. S.T. Enterprises. Chapter 8 clearly covers edible fruits and Chapter Notes 3 states dried nuts of this chapter may be partially rehydrated or treated for the following purposes, i.e. moderate heat treatment for additional preservation or stabilization and by addition of vegetable oil to improve or maintain their appearance. The GENERAL notes of Chapter 8 states that Fruits and nuts of the Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled - As per Chapter Notes 3 the character of the betel nut is retained. The appellants have not provided any evidence to show that the character of the betel nut is not retained by the boiling (re-hydrating) on the drying process. The speaking Order No. 2/2020, dated 9-12-2020 in the case of M/s. S.T. Enterprises, Overseas, No. 308, Kriti Deep Building, DDA Real Business Center, Nangal Raya, New Delhi-110046 (B/E. No. 1017900, dated 18-11-2020) and speaking Order No. 3/2020, dated 9-12-2020 in the case of M/s. Ayush Business Overseas, 3rd Floor, House No. 1/20, Sindhora Kalan City, New Delhi-110052 (B/E No. 1017898, dated 18-11-2020) passed by the respondent i.e. Authorised Officer, J. Matadee Free Trade Warehousing Zone (FTZ), Mannur Village, Sriperumpudur, Kanchipuram Dist.-600210 classifying the impugned goods betel nuts - whole under CTH 0802 80 10, is upheld. Appeal disposed off.

Summary

Issues Involved:
1. Whether the opinion of the FSSAI notified laboratory can be relied upon for classification of the imported goods?
2. Whether the test report given by the CRCL (Central Revenues Control Laboratory), Chennai is complete and reliable?
3. Whether the impugned speaking Orders No. 2 & 3/2020-21, dated 9-12-2020 issued by the Authorised Officer, J. Matadee FTWZ, Kancheepuram, TN are legally correct or not in the case of the imported goods?
4. Whether the citation of the advance rulings in the case of M/s. Excellent Betelnut Products Pvt. Ltd., Nagpur is applicable to both the appellants i.e. M/s. S.T. Enterprises, New Delhi. and M/s. Ayush Business Overseas, New Delhi?
5. Whether the SIIB letter in F. No. 348/2020-SIIB, dated 19-4-2020 cited by the consultant has any bearing on the issue at hand?
6. Whether both the appeals have any merit?

Detailed Analysis:

Issue 1: Reliance on FSSAI Notified Laboratory for Classification
The FSSAI notified laboratory report stated that the physical appearance of the betel nuts was "Brown Colour Whole Nuts" and confirmed to BETEL NUTS (BOILED SUPARI). However, the FSSAI lab report is only for determining the fitness for human consumption and cannot be considered for the classification of goods under the Customs Tariff Act. Therefore, the reliance by the appellants on this report for classification purposes is incorrect and misconceived.

Issue 2: Reliability of CRCL Test Report
The Authorised Officer sent samples to the Chemical Examiner at the Custom House, Chennai, with specific queries about the classification of the goods. The test report confirmed that the samples did not contain cardamom or food starch and were in the form of whole betel nuts. The Chemical Examiner further clarified that the goods do not fall under CTH 2106 90 30 as they are not a preparation but fall under CTH 8. Thus, the CRCL test report is complete and reliable for classifying the goods as whole betel nuts under CTH 0802.

Issue 3: Legality of the Speaking Orders
The speaking orders issued by the Authorised Officer classified the goods as whole betel nuts under CTH 0802 80 10. The appellants argued that the goods should be classified under CTH 2106 90 30 based on the processes they underwent. However, the Chemical Examiner's report and the lack of evidence supporting the appellants' claims led to the conclusion that the goods are correctly classified under CTH 0802 80 10. The speaking orders are legally correct.

Issue 4: Applicability of Advance Rulings
The appellants relied on advance rulings in the cases of M/s. Excellent Betelnut Products Pvt. Ltd. and M/s. Isha Exim. However, as per Sec. 28J of the Customs Act, 1962, advance rulings are binding only on the applicant who sought them and the authorities in respect of that applicant. Therefore, these rulings are not applicable to the appellants in this case.

Issue 5: Relevance of SIIB Letter
The consultant cited a letter from the D.C., SIIB, which recommended the movement of containers for further procedures. However, the D.C., SIIB is not the final authority on classification matters. The letter does not have any bearing on the classification of the goods.

Issue 6: Merit of the Appeals
The appellants' arguments were based on incorrect reliance on FSSAI reports, misinterpretation of advance rulings, and unsupported claims about the processing of the betel nuts. The classification of the goods as whole betel nuts under CTH 0802 80 10 is supported by the Chemical Examiner's report and HSN explanatory notes. Therefore, both appeals lack merit and are rejected.

Conclusion:
The appeals filed by M/s. S.T. Enterprises and M/s. Ayush Business Overseas are rejected. The goods are correctly classified under CTH 0802 80 10 as whole betel nuts. The speaking orders issued by the Authorised Officer are upheld.