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2023 (6) TMI 653 - AAR - CustomsClassification of goods intended to be imported - Roasted Areca Nuts - to be classifiable under CTH 2008 19 20 of the Customs Tariff Act, 1975 or under CTH 2106 - HELD 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, prima facie, classifiable under more than one Heading, the 'most specific description' is preferred. When the Chapter/ 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. Therefore, on the application of GIR 3(b), the subject goods merits classification under Heading 2008 and more specifically under Subheading 2008 19 20 as Other roasted nuts and seeds . 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 I hold 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. Thus, the Roasted betel nuts fall under Tariff heading 2008, specifically under Tariff entry 2008 19 20 'Other roasted nuts seeds' of chapter 20 of the first schedule of the Customs Tariff Act, 1975.
Issues Involved:
1. Classification of "Roasted Areca Nuts" under the Customs Tariff Act, 1975. 2. Applicability of Chapter 8 vs. Chapter 20 for roasted areca nuts. 3. Interpretation of relevant legal provisions and case laws. Summary: Issue 1: Classification of "Roasted Areca Nuts" under the Customs Tariff Act, 1975. The applicant sought an advance ruling on the classification of "Roasted Areca Nuts" for imports from Indonesia through various Indian ports. The applicant argued that the product should be classified under Chapter 20 of the Customs Tariff Act, 1975, specifically under CTH 2008 19 20, as roasted nuts. The applicant detailed the process of roasting, which involves de-husking, drying, and repeated roasting at high temperatures, resulting in significant changes to the physical and chemical properties of the nuts. Issue 2: Applicability of Chapter 8 vs. Chapter 20 for roasted areca nuts. The jurisdictional Customs Commissionerates argued that the product should be classified under Chapter 8, specifically under CTH 0802 80, as the processes described fall under "moderate heat treatment" mentioned in Chapter Note 3 of Chapter 8. They contended that the process of roasting does not fundamentally alter the essential character of the betel nut, and thus it should remain classified under Chapter 8. However, the Authority for Advance Rulings (AAR) found that the process of roasting, as described by the applicant, involves severe heat treatment, which is distinct from the moderate heat treatment mentioned in Chapter 8. The AAR noted that roasting results in significant changes in the physical and chemical characteristics of the nuts, making them fit for immediate consumption without any additional ingredients. Issue 3: Interpretation of relevant legal provisions and case laws. The AAR referred to the General Rules of Interpretation (GIR) and relevant Supreme Court judgments, including Amrit Agro Industries Ltd. v. Commissioner of Central Excise and Commissioner of Customs & Central Excise vs. Phil Corporation Ltd., which upheld the classification of roasted nuts under Chapter 20. The AAR emphasized the importance of HSN Explanatory Notes, which specifically mention dry-roasted, oil-roasted, and fat-roasted nuts under CTH 2008. The AAR concluded that the process of roasting constitutes a "preparation" and that roasted areca nuts should be classified under Chapter 20, specifically under CTH 2008 19 20. The ruling highlighted that the process of roasting is not covered by Note 3 to Chapter 8 and that the roasted nuts find specific mention in Chapter 20 of the Customs Tariff Act, 1975. Ruling: The AAR ruled that the roasted betel nuts fall under Tariff heading 2008, specifically under Tariff entry 2008 19 20: "Other roasted nuts & seeds" of Chapter 20 of the first schedule of the Customs Tariff Act, 1975.
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