2024 (7) TMI 1324 - HC - Customs

Classification of imported goods - Roasted Area Nut/Beetle Nut and Roasted Area Nut/Beetle Nut Cut - classifiable under CTH 080280 or not - HELD THAT - In Commissioner of Customs, Chennai-II vs. Shahnaz Commodities International Pvt Ltd. 2023 (8) TMI 492 - MADRAS HIGH COURT , this Court considered the similar issue and held 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. The said judgment is squarely applicable to the facts of this case - appeal dismissed.

Issues Involved:

1. Classification of Roasted Areca Nut/Betel Nut and Roasted Areca Nut/Betel Nut Cut.
2. Applicability of Chapter Notes and HSN Explanatory Notes.
3. Specific Entry vs. General Entry in Customs Tariff Classification.
4. Evidence and Process Validity.
5. Packaging and Presentation Requirements under Chapter 20.
6. Relevance of Previous Judgments.

Issue-wise Detailed Analysis:

1. Classification of Roasted Areca Nut/Betel Nut and Roasted Areca Nut/Betel Nut Cut:

The respondent sought an advance ruling on the classification of Roasted Areca Nut/Betel Nut and Roasted Areca Nut/Betel Nut Cut, intending to import these from various countries into India. The Customs Authority for Advance Ruling (CAAR) classified these goods under Custom Tariff Heading (CTH) 2008, specifically CTI 2008 19 20, as "Other roasted nuts and seeds" of Chapter 20 of the Customs Tariff Act, 1975. The appellant contested this classification, arguing that the goods should fall under CTH 0802 80, which covers areca nuts.

2. Applicability of Chapter Notes and HSN Explanatory Notes:

The appellant argued that the process of roasting should fall under "moderate heat treatment" as mentioned in Chapter Note 3(a) of Chapter 8. They contended that the process of roasting is not defined in the Customs Tariff Act or HSN Explanatory Notes, but the process described by the respondent aligns with moderate heat treatment, which is covered under Chapter 8. The appellant also pointed out that the moisture content reduction claimed by the respondent was not backed by evidence.

3. Specific Entry vs. General Entry in Customs Tariff Classification:

The court referenced the principle that a specific entry prevails over a general entry, as per Rule 3(a) of the General Rules of Interpretation. The court cited the case of Commissioner of Customs, Chennai-II vs. Shahnaz Commodities International Pvt Ltd., which held that roasted betel/areca nut is specifically classified under CTH 2008 19 20, and cannot be classified under the more general entry of CTH 0802 80. The court emphasized that the classification should be based on tariff entries, not on whether the products are commercially the same.

4. Evidence and Process Validity:

The appellant contended that the respondent's claims about the roasting process and moisture content reduction were not supported by empirical evidence. They argued that the goods are only subjected to moderate heat treatment, which is covered under CTH 0802. The court, however, did not find this argument persuasive in light of the specific classification provided under CTH 2008 19 20.

5. Packaging and Presentation Requirements under Chapter 20:

The appellant argued that Chapter 20 deals with preparations of vegetables, fruits, nuts, or other parts of plants, which should be presented in packaged conditions as specified in the HSN Explanatory Notes. They contended that the goods imported in bulk do not meet these packaging requirements and should therefore be classified under Chapter 8. The court noted that the HSN Explanatory Notes are a safe guide for tariff classification and that roasted areca nuts are included under Chapter 20, regardless of packaging.

6. Relevance of Previous Judgments:

The court reviewed previous judgments, including the Supreme Court case of Crane Betel Nut Powder Works, which dealt with whether boiling and drying constitute manufacturing. The court clarified that the current issue is about classification, not manufacturing. The court also referenced the case of Alladi Venkateswarlu vs. Government of Andhra Pradesh to differentiate between moderate heat treatment and roasting.

Conclusion:

The court concluded that the classification of roasted areca nut under CTH 2008 19 20 is appropriate, as it aligns with the specific entry in the tariff and the HSN Explanatory Notes. The appeal was dismissed, and the order of the Customs Authority for Advance Ruling was upheld. The court emphasized that specific entries take precedence over general entries and that the HSN Explanatory Notes are a reliable guide for classification.

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