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TMI Blog2024 (12) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... a particular classification or the other. 1.1 That the nomenclature and details of the goods being sought to be imported by the applicant are as under :- (i) Roasted Areca Nuts (whole) (ii) Roasted Areca Nuts (split) (iii) Roasted Areca Nuts (cut) 1.2 That the processes carried out on the Roasted Areca Nut (Whole), Roasted Areca Nut (Split) and Roasted Areca Nut (Cut) are as under :- (i) De-husking the raw betel/areca nut and drying the same before being fed into the roasting oven; (ii) Feeding the fresh areca nuts into a seed roasting oven, heating up the betel nuts would be roasted well beyond 100 degree Celsius, usually in the range of 130-150 degree Celsius and roasting the fresh areca nuts is done using firewood/palm kernel-based ovens of the seed roasting machine and temperature of the flames is around 600 degrees Celsius. (iii) Take the areca nuts out of the oven, cooling at room temperature and feeding back into the oven, heat and roast them again, and perform this cycle until the water content of the fresh areca nuts goes below 6%; and (iv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note qua Chapter 20 explains as bellow : Chapter 20 - This Chapter includes : (1) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by vinegar or acetic acid. (2) Vegetables, fruit, nuts, fruit-peel and other parts of plants preserved by sugar. (3) Jams, fruit jellies, marmalades, fruit or nut purees, fruit or nut pastes, obtained by cooking. (4) Homogenized prepared or preserved vegetables and fruit. (5) Fruit or vegetable juices, neither fermented nor containing added alcohol, or of an alcoholic strength by volume not exceeding 0.5% vol. (6) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by other processes not provided for in Chapter 7, 8 or 11 or elsewhere in the Nomenclature. xx xx xx It includes, inter alia : Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. 1.7 It is submitted that for the purpose of classification of goods the Explanatory notes are guiding factors wherever an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us changes the chemical and physical characteristics of the areca nut by reducing arecoline and tannin as well moisture. 1.12 In view of above the applicant would like to have advance ruling on the following issue : "Whether the goods sought to be imported i.e. Roasted Areca Nuts (Whole) and Roasted Areca Nuts Cut" is classifiable under the CTH 2008 19 20. That the applicant requests the Hon'ble Authority for Advance Rulings that the appropriate classification of the aforesaid goods may kindly be ruled under Section 28H of the Customs Act, 1962. Statements containing applicant's interpretation of law and/or facts, as the case may be :- 2.1 That the goods in question which are to be imported by the applicant is roasted betel nut and hence should rightly be classifiable under CTH 2008 and more particularly in 2008 19 20. That as per the explanatory note to Chapter 8 fruit and nuts of this Chapter remain classified here even if put up in airtight packing (e.g., dried prunes, dried nuts in cans). In most cases, however, products put up in these packing have been prepared or preserved otherwise than as provided for in the headings of this Chapter, and are therefore excluded from Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANGE IN THE BETEL NUT BY THE PROCESS OF ROASTING : With regard to the goods in question it is submitted that during the process of roasting, the roasting is done using firewood/palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius and as a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. 2.4.1 That roasted betel nut undergoes a change in its appearance as well as in respect of its chemical characteristics on account of the roasting process. There is a visible deposition of an ash-like substance on the outer surface of the betel nut. There is a substantial change in the chemical characteristics also of the betel nut product on account of the roasting process. That the tannin and arecoline content of raw betel nut/areca nut gets substantially changed by subjecting the same to roasting and boiling. Therefore, roasted betel nut is a distinctive product of betel nut making it suitable for immediate consumption. 2.4.2 That roasting is not aimed at additional preservation or stabilization or to improve or maintain their appearance. That in this regard applicant takes support from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected by the Hon'ble High Court vide its judgment dated 1-8-2023. 2.5.3 The Hon'ble High Court has after considering all the other chapter including Chapter 8, and Chapter 21 of Customs Tariff and also considered the other rulings as submitted by the customs authority though qua other goods i.e. boiled areca nuts, API supari, unflavoured supari etc. 2.5.4 It has been observed by the Hon'ble High Court that the Rulings of the Advance Ruling Authority did not deal with Roasted areca nut and thus would have no relevant to the issue on hand. Further, it has been held that Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH; 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. Also it is held that HSN explanatory notes is normally a safe guide in determining classification under CTH. Roasted Areca/betel nut having mentioned in CTH 2008 19 20 under HSN the impugned Ruling is in consonance with HSN classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) (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 betel nut, fruit or dried nuts." 3.3 The applicant's claim that after repeated roasting of the areca nuts at the temperature of more than 150 degrees Celsius in a roasting oven due to which the water content is reduced to 6% is a complete misrepresentation of facts. The applicant has claimed that after roasting water content comes down to 6 per cent. It is submitted that the moisture content is normally less than 10% for various consignments of raw betel nuts imported under Chapter 8. Therefore, there is not much difference between the roasted nuts and raw betel nuts in terms of temperature. Applicant did not provide any test report before Advance Ruling authority in support of his claim. Hence, it is clear that the applicant did not provide the complete process before the CAAR and have misrepresented the facts. Further, the applicant did not provide any Test Report/documentary evidence to support its claim that the tannin and arecoline content of raw betel nut/areca nut get s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repared or preserved by the processes specified under Chapter 8 as per the Chapter Note 1 of the Chapter 20 and the Chapter Note 3 of Chapter 8 includes roasting under 'moderate heat treatment', hence the impugned goods cannot be classified under Chapter 20. The said chapter note is reproduced below : "This chapter does not cover. (a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, Chapter 8, or Chapter 11; (b) Vegetables fats and oils (chapter 15); (c) Food preparations containing more than 20% by weight of sausage, meat, meat offal, blood, insects, fish or crustaceans, maltose's or other aquatic invertebrates, or any combination thereof (chapter 16); (d) Bakers wares and other products of heading 1905, or (e) Homogenized composite food preparations of heading 2104." 3.7 Further, as per Rule 3(a) of General Rules for the Interpretation of the Harmonized System since the product is more specifically classified under CTH 08020 classification under Chapter 2008 or 2106 is unwarranted. When by application of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the advance ruling sought by the applicant for the goods i.e. roasted areca nut under CTH 2008 19 20 is without any justification. 4.2 That the contention of the Addl. Comm. that the roasting is for additional preservation or stabilization is not correct as roasting involves severe heat treatment and is different form moderate heat treatment as well as dehydration. Further, the classification as far as possible must be in conformity and in consonance with the HSN explanatory notes and that whenever there is specific entry, the same would prevail over general entry as per the principle incorporated under Rule 3(A) of General Rules of Interpretation. 4.3 That in fact, the Ld. Addl. Comm. in support of its contention has relied upon certain judgments however, with due respect the said judgments are in the case wherein the challenge was between CTH 8 and CTH 21 whereas the present is case of CTH 20 and hence the said judgment are not applicable. 4.4 Further, this Hon'ble Authority has also issued an advance Ruling No. CAAR/Del/Perfect/01/2024 In Application No. 32/2023-Delhi, dated 28-11-2023 in the case of Perfect Trading Co., wherein this Authority has allowed the advance rulin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the submissions made by the applicant during the course of personal hearing. I have gone through the response from the Customs Port Commissionerate. I proceed to decide the present application regarding classification of Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) on the basis of the information on record as well as the existing legal framework having bearing on the classification of the Provisionally preserved Areca nut (whole) and Provisionally preserved Areca nut (split) under the First Schedule of the Customs Tariff Act, 1975. 6.1 The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here it is important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in Chapter 8 and processes of dry roasting, oil-roasting and fat-roasting referred in Chapter 20. The terms dry-roasting, oil roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned above. Roasting, as submitted by the applicant, is carried out using roasting ovens due to which betel nuts are roasted well beyond 150 degrees Celsius then cooled in room temperature and the cycle is repeated until the moisture content is less than 6%. This clearly indicates that the roasting is much more than mild heat treatment. Even in the generally understood meaning of the terms, it is understood that roasting involves severe heat treatment and is different from moderate heat treatment as well as dehydration. Therefore, the impugned goods do not satisfy Note 3 to Chapter 8. 6.4 While examining the scope of CTH 2008 I find that, as per HSN Explanatory Notes, Heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re emerging from the HSN. This being the expressly acknowledged basis of the structure of the Central Excise Tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act." 7.1 From the Apex Court's foregoing judgments, it is observed that the roasted nuts find specific mention in the then Chapter 20 of the then Central Excise Tariff Act and the Chapter 20 of the Schedule I of the Customs Tariff Act, 1975 as well as corresponding HSN Explanatory Note. It is important to pay attention to the fact that, in the above referred HSN explanatory note, a process of roasting is not specifically mentioned as a process of preservation or stabilization or a process to improve or maintain the appearance. Specific attention is invited to the Paras 10 & 11 of the SC judgment (M/s. Phil Corporation) in which Paras 6 & 7 of SC judgment in case of M/s. Amrit Agro [2007 (210) E.L.T. 183 (S.C.)] are relied upon. Para 6 inter alia reads as follows : "roasted peanuts are covered by Chapter 20. Even according to the Explanatory notes of HSN under Heading 20.08 ground-nuts, almonds, peanuts et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible must be in conformity and in consonance with the HSN Explanatory Notes.
In this judgment the Hon'ble High Court has stated about the relevance of CAAR Rulings relied on by the Jurisdictional Commissionerate. Relevant para of the said judgment is reproduced verbatim as follows :- "on perusal of the Rulings relied upon by the appellant, we find that the same did not deal with roasted areca/betel nuts, but boiled/dried nuts and in some cases, the question was whether the commodity in issue was a preparation of betel nut. However, the cases did not deal with roasted betel/areca nut nor was CTH 20 considered. Thus, the above Rulings may have no relevance."
I find that the issue dealt with i.e. Classification of "Roasted betel nuts" in the judgment of the Honourable High Court of Madras is of exactly the same issue that is impugned in this application and therefore is squarely applicable to this case.
8. On the basis of foregoing, I am of the view that the Roasted areca/betel nuts fall under Custom Tariff Heading 2008, specifically under CTI 2008 19 20 'Other roasted nuts & seeds' of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975.
9. I rule accordingly. X X X X Extracts X X X X X X X X Extracts X X X X
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