2023 (6) TMI 654 - AAR - Customs

Classification of goods proposed to be imported - Provisionally preserved Areca nut - to be classified under tariff entry 0812 9090 or under CTH 0802? - HELD THAT - The process of preservation is mentioned in the proforma invoice as the provisionally preserved Areca Nuts are solely treated with Sulphur-di-oxide gas in closed chambers for two hours and will be confined in the closed condition for 24 hours or shall be preserved by Blanching with Sodium Benzoate solution and Potassium Solution. These Nuts would require further processing before direct human consumption . The preservatives can be removed before consumption through simple processes carried out with sodium benzoate solution and the nuts can be treated with sodium bi-carbonate and when washed with plain water the excess benzoic acid will get removed and by this way of neutralisation. The chapter note 3 specifies the physical status of the goods along with corresponding processes that could be carried on those goods under this chapter. The areca/ betel nut is mentioned in Heading 0802 as well as 0812. The explanatory note to Heading 0802 states that This heading also covers areca (betel) nuts used chiefly as a masticatory. One of the main uses of the goods under CTH 0802 is masticatory. The provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter heading 0812 due to chapter note 4. The subject product is treated with sulphur-di-oxide gas or sodium benzoate solution before packing and export for preservation. The said preservatives can be removed before consumption through simple processes, to make the product suitable for human consumption. It is observed that the subject goods remain unsuitable for immediate consumption in that state and need to be processed further to remove the preservatives to make the same suitable for human consumption. Thus, 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. Thus, the subject goods namely 'provisionally preserved Areca nut' merit classification under Chapter Heading 0812 and more specifically under sub-heading 0812 90 90 of the First schedule of the Customs Tariff Act, 1975.

Summary

Issues involved:
Classification of provisionally preserved Areca nut under Customs Tariff Act, 1975.

Details of the Judgment:

Issue 1:
The applicant sought an advance ruling on the classification of provisionally preserved Areca nut under the Customs Tariff Act, 1975.

The applicant proposed to import Areca nut from Indonesia and other South East Asian countries, which undergoes preservative treatment before packing and export to protect them from fungi and moulds. The preservatives can be removed before consumption through simple processes. The applicant claimed that the provisionally preserved Areca nuts should be classified under chapter heading 0812 of the Customs Tariff Act 1975.

Issue 2:
Interpretation of Chapter Notes and Heading Classification.

Chapter 8 of the Customs Tariff Act covers edible fruit and nuts, and the applicant argued that the provisionally preserved Areca nuts fall under heading 0812. Chapter note (4) specifies that heading 0812 applies to fruit and nuts treated solely for provisional preservation during transport or storage, provided they remain unsuitable for immediate consumption. The applicant provided certificates supporting their claim and stated that the subject goods are not fit for immediate human consumption and need further processing to remove preservatives.

Conclusion:
After reviewing the submissions and relevant legal provisions, the Authority ruled that the provisionally preserved Areca nut should be classified under Chapter Heading 0812, specifically under sub-heading 0812 90 90 of the Customs Tariff Act, 1975. The goods remain unsuitable for immediate consumption and require further processing to remove preservatives before being suitable for human consumption.