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TMI Blog2023 (3) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. M/s Great Nuts Impex Pvt. Ltd. proposed to import into India a preparation of Betal Nuts known as 'Boiled Supari' packed in consumer packing and bulk packing. The proposed items included, (i) API Supari; (ii) Chikni Supari; (iii) Unflavoured Supari; (iv) Flavoured Supari; and (v) Boiled and Cut Supari. The said appellant proposed that the afore-mentioned goods be classified as "Betel nut product known as 'Supari'" under sub-heading 2106 90 30 in Chapter 21 of the First Schedule to the Customs Tariff Act (the First Schedule to the Customs Tariff Act is hereafter referred to as 'Customs Tariff') and sought a ruling on the following question: "Whether the goods sought to be imported is preparation of betel nut commonly known as Supari as described herein above, whether or not containing added ingredients such as food starch, spices, mulethi, menthol (flavors), perfume etc. Though not containing lime or katha (catechu) or tobacco and will the resultant product be classifiable under Chapter/ heading 2106 90 30 as Food Preparation." 3. According to M/s Great Nuts Impex Pvt. Ltd., the said goods were not classifiable under Chapter 8 of the Customs Tariff as Areca nuts (heading 080 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, polishing in 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, sterilization to remove bacterial count, 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, flavoring in large size automatic blenders with compound, metal detection by magnetic metal detectors, sterilization to kill bacteria count increased due to handling in processing and packaging. (v) 'Boiled Supari': Following processes are conducted on raw green fresh bete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis that the processes for preparing boiled supari, flavoured supari, unflavoured supari, chikni supari and API supari could not be considered as a preparation of betel nuts. 12. Next, Mr. Sunil submitted that the CAAR had erred in relying on Note 3 to Chapter 8 of the Customs Tariff, as none of the processes resulting in the products in question, namely, boiled supari, API supari, chikni supari, flavoured supari, unflavoured supari, boiled and cut supari, were for the purposes of additional preservation or stabilisation or to improve or maintain their appearance. The said processes were for the purpose of resulting in an edible product recognised and sold in the market. 13. Lastly, he contended that the CAAR had erred in relying on the decision of the Supreme Court in Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr. (supra) and submitted that the said decision was concerning the question whether betel nut powder, along with permitted ingredients, amounted to manufacture for the purposes of excise duty. He also submitted that, at the material time, the relevant heading read as "Betel nut known as 'Supari'". He stated that there was a materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view of the Custom Excise and Service Tax Appellate Tribunal that "Betel nut remains a Betel nut". The Supreme Court held that "the process of manufacture employed by the appellant-company did not change the nature of the end product" and agreed with the conclusion that "the process of cutting betel nuts into small pieces and addition of essential/non-essential oils, menthol, sweetening agents etc. did not result in a new and distinct product having a different character and use". Accordingly, the Supreme Court held that the product in question is covered by sub-heading 0801 00 under Chapter 8 of the First Schedule of the Central Excise Tariff Act, 1985. 16. Concededly, the Tariff sub-heading 0801 of the First Schedule to the Central Excise Tariff Act, 1985 at the material time is identical to the heading 0802 of the Customs Tariff which fell for consideration of the Supreme Court in Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr. (supra). However, the heading under entry 21 07 of the First Schedule to the Central Excise Tariff Act, 1985 (which was considered by the Supreme Court in that case) read as "Betel nut powder known as 'Supari'". I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said note reads as under:- "3. Dried fruit or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes: (a) for additional preservation or stabilisation (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." 22. The CAAR had referred to the aforesaid Note and had observed that the same was not considered by the learned AAR in Re: Excellent Betelnut Products Pvt. Ltd. (supra). The CAAR had also referred to the Guidelines to Chapter 8 of the Harmonized Commodity Description and the Coding System of the World's Customs Organization, which provided that fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled and that the addition of small quantities of sugar would not affect the classification of fruit. 23. The CAAR had ruled that that the processes for making API Supari, flavoured supari, unflavoured supari chikni supari, boiled supari, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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