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TMI Blog2021 (3) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of Section 28F(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 aforesaid application, received in the O/o AAR, New Delhi on 10-12-2019 had become time barred for this Authority. 4. However, on constructive interpretation of the powers vested with this Authority, vide letter dated 3-2-2021, the applicant was advised to intimate whether they continue to be interested in obtaining ruling of this Authority, and if so either resubmit their application in the Form CAAR-I appended to Customs Authority for Advance Rulings Regulations, 2021, or simply affirm that the declarations made in the earlier application remain valid and unchanged at the earliest to this Authority. It was also informed that the date of receipt of such resubmitted application or affirmation, as the case may be, shall be taken as the date of receipt of their application under Regulation 8(4); and no separate payment of the prescribed fee under Regulation 6(6) of CAAR Regulations, 2021 is req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) For making 'Chikni Supari', raw green and fresh betel nuts are processed after removing the impurities by labours and thereafter are sliced in small pieces, as required in machines and then boiled in water for 6-8 hours. After boiling the same are mixed with food starch and then dried fully. After polishing goods are ready for packaging. I therefore, note that the process of making 'Chikni Supari' involve all the processes involved in making API Supari plus slicing the dried nut into small pieces. (iii) For 'Unflavoured 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 polished in 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)& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were squarely covered by the aforesaid advance ruling orders. 13. Before proceeding to discuss the said rulings of AAR, I summarize the opinion of the concerned Principal Commissioner of Customs contending that the four goods proposed to be imported by the applicant are correctly classifiable under sub-heading 080280. 13.1 The processes mentioned in the application are boiling/roasting, drying, removal of impurities by manual labour or blower, polishing, slicing, etc. only which are essentially meant for extraction from kernel, preservation, stabilization of areca nut and these processes are essential to derive saleable/marketable areca nut/betel nut/supari. Areca nut is the seed of the endosperm of the oriental palm, Areca catechu. It is not a true nut, but rather a drupe. While fresh, the husk is green and the nut inside is so soft that it can be easily cut with an average knife. The raw fruit has to be peeled to get its kernel. In the ripe fruit, the husk become yellow or orange, as it dries and the kernel inside becomes hard to become wood-like in consistency. At this stage, areca nut can only be sliced using a special knife like cutter. The fresh fruit with husk ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the process is a bit longer or even a bit complicated would not rob the produce of its character of being an agricultural produce. (ii) Hon'ble Calcutta High Court in "Killing Valley Tea Co. Ltd. v. Secretary to State - AIR 1921 Calcutta 40" : While process of selecting and plucking tea leaves from the tea shrubs could be deemed to be agriculture, the subsequence process which included drying and rolling of the leaf was a manufacturing process. If the Calcutta High Court could be said to have laid down that as a result of those processes the tea leaf ceased to be agricultural produce, it is not correct. The tea leaf remained what it was. It was tea leaf when selected and plucked and it continued to be tea leaf when after the process of withering, crushing and roasting, it was sold in the market. The process applied was intended to bring out the potential qualities of flavour and colour. The potential inhered in the tea leaf when the mechanical processes of withering, crushing and roasting, fermenting covering with wet sheets and roasting again were applied, at no stage did it change its essential substance. It remained tea leaf throughout. In its basic nature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts.' 14.2 In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are accommodated under 0802 80 10, 20, 30, 90, and 0802 90 00, respectively. 14.3 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.' 14.4 In this Chapter, the related entry, with respect to betel nuts, is the sub-heading 2106 90 30, i.e., betel nut products known as supari. 15. Further, since the question relates to classification of goods proposed to be imported, guidance of the Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would be useful. It is seen that with respect to Chapter 8, the HSN prescribes the following as gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST) in the case of M/s. Shah Nagsi Exports Private Limited [2019 (24) G.S.T.L. 317 (A.A.R. - GST)], wherein it has been held that Ready to cook popcorn pre-mix, i.e. Popcorn Maize with edible oil and salt", sold in retail pack size ranging from 30 grams to 350 grams is classifiable under HSN Code 2008 19 90. Shri Kumar readily conceded that this ruling can only have persuasive value in the case before the Authority. 18. Shri Piyush Kumar also submitted that JNCH is allowing clearance of said items imported by the said parties (who have obtained advance rulings) under Chapter 21 of the Customs Tariff Act. He contended that unless these orders are set aside, and are being honoured by JNCH, the same benefit should be made available to the applicant as well. 19. Having gone through the advance ruling application, supporting arguments for classification of the said four goods under Chapter 21 as preparations of betel nuts, precedence of erstwhile AAR in support of the said classification, contention of the concerned Principal Commissioner of Customs, case laws relied by him to argue that the appropriate classification of the said four goods would be under Chapter 8, inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reservation; and third set for enhancing appearance or presentation, which are clearly covered by the Chapter Note 3 to Chapter 8. Addition of starch would be included under such process. The applicant has contended that boiling of raw betel nut is more than moderate heat treatment. However, in view of the Chapter Note referring to moderate heating, HSN Note and common understanding of boiling, I am unable to agree to the contention of the applicant and hold that boiling of betel nut is akin to moderate heat treatment. Therefore, I conclude that the processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari and unflavoured supari are in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Note. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as preparations of betel nut, classifiable under Chapter 21. 23. In the case of flavoured supari, the question to be answered is whether the addition of special flavouring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21. In this regard, the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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