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TMI Blog2022 (2) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain 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 six 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. Five goods, namely API supari, Chikni supari, unflavoured supari, boiled supari and cutting supari are considered together. 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. Addition of starch would be included under such process. It is also noted that during the personal hearing, the Learned Advocate raised the contention that with the process of boiling, betel nut loses the character of being fresh dried nut, therefore, the item will not be covered under Chapter 8. In the instant case betel nuts have been boiled and then dried, the eventual state of betel nuts being indeed dried - the processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavoure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Vijay Singh Chauhan, Authority for Advance Rulings of Customs Shri Shubhankar Jha, Advocate, for the Assessee. RULING M/s. Morchhadi Traders, Kolkata, a resident proprietorship firm having IEC No. AAZHS1123B, PAN AAZHS1123B and GSTIN No. 19AAZHS1123B1Z2, has filed an application dated 5-2-2021 seeking advance ruling under Section 28H of the Customs Act, 1962 before the Customs Authority for Advance Rulings, New Delhi (CAAR, in short). 2. On scrutiny of the application, Secretary, CAAR, New Delhi issued Deficiency Memo and requested the applicant to rectify said deficiencies. Rectification of deficiency was completed by the applicant and rectified application was submitted vide letter dated 22-2-2021 of their Counsel, M/s. Jain Globus Law Firm, which was received in the Secretariat of CAAR, New Delhi on 1-3-2021. The application was accordingly registered under Serial No. 3/2021-Delhi, dated 1-3-2021. 3. On registration of the application, the concerned Principal Commissioner/Commissioner of Customs were requested vide letter dated 2-3-2021 to furnish their comments, in the matter. However, comments of the concerned Principal Commissioner/Commissioner have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n polishing machine, 3 stage cutting, blowing of weightless particles in blowers, gravity separation by automatic gravity separation machine, roasting in fire gas rotary roaster, metal detection by magnetic metal detectors and packaging. (iv) 'Flavoured Supari' : Following processes are conducted on raw dried betel nut: removing of large impurities by labourers, removing of small impurities by de-stoner, metal deflection (removal of metal item, if any), garbling in automatic garblers, polishing in polishing machine, splitting (half) and/or 3 stage cutting, blowing of weightless particles in blowers, gravity separation by automatic gravity separation machine, roasting in fire gas rotary roaster, flavouring in large size automatic blenders with flavouring materials like spices/or mulethi, etc., are mixed in automatic blenders with outsourced liquid flavours such as perfumes, etc., sterilizing to kill bacteria count increased due to handling in processing and packaging. (v) 'Boiled Supari' : Following processes are conducted on raw green fresh betel nut : removing of large impurities by labourers, boiling in water for upto 4 hours, removing the husk, boiling again for 2 hours, dry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Note 2 : "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 or menthol." They have also cited reference to ruling of the erstwhile AAR, New Delhi in the case of M/s. Excellent Betelnut Products Pvt. Ltd., M/s. Oliya Steel Private Limited, Kolkata and M/s. Isha Exim. I will revert to these in my discussion later in the order. 8. On the basis of the submissions of the applicant, along with the cited reference to the ruling of the erstwhile AAR, there are two contending entries in the CTH for the aforesaid six goods, viz. sub-heading 2106 90 30 and sub-heading 0802 80 90. Therefore, it would be useful to carefully consider the two competing tariff entries and the guidance relating thereto. 9. Chapter 8, which covers Edible fruit and nuts; peel of citrus fruit or melons includes, inter alia, the following Note 3 :- '3. Dried fruits or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes : (a) For addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 21.1 also find that the AAR had considered the contention of the department that the said four goods merit classification under Chapter 8. but rejected the same. However, while doing so, the erstwhile AAR did not make any comment on the implications of the Chapter Note 3 to Chapter 8 on the processes that raw betel nuts were subjected to obtain the said four goods. Further, AAR was of the opinion that the decision of the Hon'ble Supreme Court in the case of M/s. Crane Betel Nut Powder Works reported at 2007 (210) E.L.T. 171 (S.C.) has no application in the facts of the cases before them. It is my considered opinion that in order to arrive at the appropriate classification of the said four goods, all originating from common source viz. raw green fresh betel nut, a more comprehensive view needs to be taken than in the aforesaid M/s. Excellent Betelnut case. 14. Having gone through the advance ruling application, supporting arguments for classification of the four goods under Chapter 21 as preparations of betel nuts, precedence of erstwhile AAR in support of the said classification, I summarize the contending positions on the question posed for advance ruling. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the posed question, I consider the five goods, namely API supari, Chikni supari, unflavoured supari, boiled supari and cutting supari together. 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. Addition of starch would be included under such process. I also note that during the personal hearing, the Learned Advocate raised the contention that with the process of boiling, betel nut loses the character of being fresh & dried nut, therefore, the item will not be covered under Chapter 8. I find that in the instant case betel nuts have been boiled and then dried, the eventual state of betel nuts being indeed dried. I do not agree with the submission that process of boiling would render the goods being excluded from being considered as dried. Further, it is obvious that boiling per se or the other processes mentioned by the applicant do not result in obtaining a preparation of betel nut. Speaking more generally, in view of the design of the Schedule to the CTA, HSN and plethora of judgments, besides com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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