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TMI Blog2021 (8) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 8, more specifically sub-heading 080280. It is also noted that Chapter 8 covers only edible nuts; inedible nuts and fruits being excluded by virtue of Chapter Note 1; and that betel nut/supari are masticatory. However, these items have been subjected to certain processes and added with certain materials, resulting in the question being posed whether the said processes and mixing/addition of certain materials are substantive enough to lead to the said four goods be considered as preparation of betel nut that would make them classifiable under Chapter 21 by virtue of Supplementary note 2 of Chapter 21. The three goods, namely API supari, Chikni supari and unflavoured supari together - HELD THAT:- In these cases, one set of processes are found to be intended for cleaning; the second set for enhancing preservation; and third set for enhancing appearance or presentation, which are clearly covered by the Chapter Note 3 to Chapter 8. Cutting into pieces, boiling of raw betel and addition of starch would be included under such processes - the processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari and unflavoured supari are in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Vijay Singh Chauhan, (Customs Authority for Advance Rulings, New Delhi) Present for the Applicant: Shri Piyush Kumar, Advocate and Shri Jitendra Singh, Advocate Present for the Department: None RULING M/s Star Spices, New Delhi, a resident partnership firm, having IEC No. AEEFS0535A and PAN AEEFS0535A, had filed an application dated 30.09.2020 seeking advance ruling under section 28-H of the Customs Act, 1962 before the Advance Ruling Authority (Central Excise, Customs Service Tax), New Delhi (AAR, in short). The said application was received in the O/o of AAR on 30.09.2020. 2. The said application was being processed in terms of section 28-I ibid by the O/o AAR. Consequent upon the appointment of Customs Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai with effect from 04.01.2021, the said application was transferred to CAAR, New Delhi in terms of section 28-F (3) ibid and regulation 31 of CAAR Regulations, 2021. 3. On perusal thereof, in view of the time limit of three months for pronouncing its advance rulings from the date of receipt of this application prescribed under section 28-I (6) ibid, it was held that the Iafor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance ruling received from the Principal Commissioner of Customs, Tughlakabad and Commissioner of Customs, Ludhiana be provided to Sh. Piyush Kumar. They submitted that they would like to go through the comments and will prepare their submissions accordingly. Shri Piyush Kumar requested that next date of hearing be given. 7.1 Accordingly, next personal hearing was scheduled on 08.04.2021 and the same was attended by Shri Piyush Kumar, Advocate and Shri Jitendra Singh, Advocate. During the hearing, Shri Piyush Kumar referred to earlier rulings of the Authority of Advance Rulings in the similar matter (which are discussed later in this order), wherein such goods were ruled to be classified under Chapter 21 of the Customs Import Tariff. Shri Piyush Kumar explained the process of obtaining the four goods and claimed that they are rightly classifiable under Chapter 21. Concluding his arguments, he reiterated that it is settled position that issues once decided must be followed in the subsequent similar matters. However, Shri Kumar was informed that present law with regard to advance rulings requires that every matter be taken up afresh. 7.2 On being queried about the averment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... polishing machines. Thereafter, the same are sterilized to remove bacterial count. After going through three stage cutting the betel nuts are subjected to blowing of weightless particulars by blower machine and gravity separation by automatic gravity separation machine and roasting in fire gas rotary roaster or oven to minimize moisture content for longevity of product. Then it is ready for packaging (sic). (iv) For 'Flavoured Supari ', large impurities are removed through labours from raw semi dried betel nuts. Then small impurities are removed by de-stoner and metal detection. Thereafter, the same are garbled in automatic garblers and polishing machines. Thereafter, the same are sterilized to remove bacterial count. After going through three stages cutting the betel nuts are subjected to blowing of weightless particulars by blower machine and gravity separation by automatic gravity separation machine and roasting in fire gas rotary roaster or oven to minimize moisture content for longevity of product. Thereafter the so cut betel nuts are flavoured in automatic blending machines with flavouring compounds of different variety such as spices, menthol, copra, cardamom and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 01.03.2021 has commented that, the activity in respect of which an advance ruling is sought has already been imported by the applicant during the period 01.09.2020 to 15.02.2021. From the plain reading of the supplementary note 4 to Chapter 21, it appears that only the preparations of Betel Nuts fall under chapter 21 of First Schedule of the Customs Tariff Act and the wholenut does not fall under this chapter and are correctly classifiable under CTH 080280. From Chapter Note 3 to Chapter 8, Areca Nuts whole/split/grounded even if partially rehydrated or treated by way of moderate heat for additional preservation or stabilization falls under CTH 080280. In the present case, the consignments are of 'Areca Nuts-Whole/Split/grounded' and are not the preparation as mentioned in Supplementary Note 4 to Chapter 21 and as such are not classifiable under Chapter 21. Even if the goods are boiled; as per Note 3 to Chapter 8, the goods proposed to be imported by the importer remained classifiable under CTH 080280. The applicant has referred Ruling No. AAR/CUS/08/2015 in Application No. AAR/44/CUS/21/2014 issued by the Authority for Advance Rulings. The said Rulings held that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional preservation or stabilization (for example, by moderate heat treatment, sulphuring, the addition of sorbic acid or potassium sorbate); b. To improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts.' 12.2 In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are accommodated under 08028010, 20, 30, 90, and 08029000, respectively. 12.3 On the other hand, Chapter 21 covers miscellaneous edible preparations. The relevant Supplementary Note 2 to the said Chapter lays down that, 'In this Chapter betel nut product known as Supari means any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copra, menthol. ' 12.4 In this Chapter, the related entry, with respect to betel nuts, is the sub-heading 21069030, i.e., betel nut products known as supari. 13. Further, since the question relates to classification of goods propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce ruling. 16. Advance ruling has been sought on classification of four different goods, each known as supari in common trade parlance, albeit with differentiator, viz. API, Chikni, unflavoured and flavoured. The basic raw material for each of the four goods is raw betel nut, which is indisputably classifiable under Chapter 8, more specifically sub-heading 080280. I also note that Chapter 8 covers only edible nuts; inedible nuts and fruits being excluded by virtue of Chapter Note 1; and that betel nut/supari are masticatory. However, these items have been subjected to certain processes and added with certain materials, resulting in the question being posed whether the said processes and mixing/addition of certain materials are substantive enough to lead to the said four goods be considered as preparation of betel nut that would make them classifiable under Chapter 21 by virtue of Supplementary note 2 of Chapter 21. Alternatively, whether the processes carried out on the same for cleaning, preserving and making them more attractive to certain tastes/ preferences are too minor to fall short of rendering them as preparations of betel nuts. 17. Before I proceed to answer the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Betel Nut (in English), the Hon'ble CESTAT held the resultant product classifiable under sub-heading 08029019 of Central Excise Tariff and not under 21069030 as supari for period after 07.07.2009] are relevant. Put simply, these decisions clearly imply that addition of flavouring agents do not change the character of the good, meaning in the present case betel nut would continue to remain betel nut and not become preparations of betel nut. 20. In view of the aforesaid discussions, I have reached the conclusion that all the four goods placed before me for consideration, i.e., API supari, chikni supari, unflavoured supari, flavoured supari merit classification under Chapter 8 of the First Schedule to the Customs Tariff Act, and more precisely, under the heading 0802 80 90, and not under sub-heading 21069030, since the processes the raw betel nuts have been subjected to and addition of starch (and flavouring agents in the case of flavoured supari) are squarely covered by the scope of the Chapter Note 3 to Chapter 8. These processes are not substantive enough to render the goods with character of preparations of betel nut , sine qua non for being eligible for classification un ..... 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