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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 process, are very much a part of Chapter Heading 2008 by virtue of HSN Explanatory Notes. It is also pertinent to observe that none of these processes are mentioned in the Chapter Note 3 to Chapter 8 of the Customs Tariff Act, 1975 as well as HSN Explanatory Notes to Chapter Heading 0802. It is an established fact that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Tariff Act. The case of Commissioner of Customs Central Excise v. Phil Corporation Ltd. [ 2008 (2) TMI 3 - SUPREME COURT ] is directly relevant and applicable in the instant case of the applicant. In the judgment of the said case Honourable Supreme Court has held a number of cases, this Court has clearly enunciated that HSN is a safe guide for the purpose of deciding issues of classification. In the present case, the HSN Explanatory Notes to Chapter 20 categorically state that the products in question are so included in Chapter 20. The HSN Explanatory Notes to Chapter 20 also categorically state that It s products are excluded from Chapter 8 as they fail in Chapter 20. From the Apex Court s foregoing judgments, it is observed that the roasted nuts find spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) The fresh areca nuts are repeatedly heated, roasted and cooled to ensure that the areca nuts are quickly cooled and shrunk after thermal expansion so that the roasted areca nuts have higher quality; the roasting time is around 2-3 days. (v) That packaging in industrial packs of 50 kgs. to 80 kg. as per requirement. 1.3 That roasted betel nut, thus undergoes a change in its appearance as well as in its chemical characteristics on account of the roasting process. There is a substantial change in the chemical characteristics of the betel nut product on account of roasting process. The tannin and arecoline content of raw betel nut/areca nut get substantially changed by subjecting the same to roasting. Therefore, roasted betel nut is a distinctive product of betel nut making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 any dispute arises while interpretating the classification of particulars chapters or in case of similar or competing entries and this has been held time and again in catena of judgments by the Hon ble Courts in India in the matters of L.M.L. Ltd. v. Commissioner of Customs Reported in 2010 (258) E.L.T. 321 (S.C.), Holostick India Ltd. v. Commissioner of Central Excise, Noida Reported in 2015 (318) E.L.T. 529 (S.C.), Collector of Central Excise, Shillong v. Wood Craft Products Ltd. Reported in 1995 (77) E.L.T. 23 (S.C.). 1.8 That in fact for similar product Ruling Nos. CAAR/Mum/ARC/39, 40 41/2023, dated 7-12-2022 [2023 (385) E.L.T. 587 (A.A.R. - Cus. - Mum.)] passed in the matter of M/s. Universal Impex, Mumbai v. Commissioner of Customs II, Chennai, Commissioner of Customs, Nhavasheva Commissioner of Customs (Krishnapatnam), Andhra Pradesh in Application Nos. CAAR/CUS/APPL/19, 21, 22/2023-O/o Commr.-CAAR-MUMBA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p 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 Chapter 8 (and will fall under Chapter 20). 2.2 That as the processes mentioned in Chapter 8 are different from the processes performed on the goods intended to be imported by the applicant, they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as Tariff). That there is specific entry for the goods i.e. roasted nuts as given under : CTH 2008 - Fruit, Nuts and other Edible Parts of Plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included : CTH 2008 19 20 - Other Roasted Nuts and seeds. 2.2.1 Further, the HSN Explanatory Note of Chapter 20 also support the contention that the roasted betel nut are covered under CTH 20 as detailed below CHAPTER 20 - This Chapter includes : (i) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by vinegar or acetic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mprove or maintain their appearance. That in this regard applicant takes support from the article titled Estimation of arecoline content of various forms of areca nut preparations by high-pressure thin-layer chromatography which throws light on the chemical composition of various forms of areca nuts. As per the article, Polyphenols (flavonols, tannins) constitute a large proportion of the dry weight of the nut. Its content in areca nut may vary depending on the degree of maturity and its processing method. The tannin content is highest in unripe areca nuts and decreases significantly with increasing maturity. The roasted nut possesses the highest average 17/65 content of tannins, ranging from 5 to 41 % (mean, 1.4%); the average tannin content of sun-dried nuts is 25%; and the lowest levels are seen in boiled nuts, which contain 17%. The article further states that raw areca nut contains the highest concentration of arecoline (1.15 0.008) followed by pan masala preparations (0.94 0.006), least content in boiled areca nut (0.79) that the tannin and arecoline content of raw betel nut/areca nut gets substantially changed by subjecting the same to roasting and boiling. Therefore, roaste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 20 under HSN the impugned Ruling is in consonance with HSN classification and that when there is a specific entry covering a product/commodity, the test of common parlance is irrelevant in determining classification. 2.6 Hence, the subject goods i.e. Roasted areca nuts are squarely covered under the classification 2008 19 20 and cannot be covered under CTH 08 which has been stand taken by the customs authority before this Hon'ble Authority as well as before the Hon ble High Court and their said contention has been rejected. 2.7 That the applicant has made the present application in bona fide and seeks the kind indulgence of this Hon ble authority thereby seeking the subject goods under classification CTH 20 and more particularly under CTH 2008 19 20. 2.8 That the applicant craves leave of this Hon ble Authority to add amend or alter the submission made above during the course of hearing. Accordingly, Hon ble Advance Ruling Authority may pass order for appropriate classification of the goods as explained above. 3. The comments were received from the Port Commissionerate of ICD, Tughlakabad, New Delhi on 26-4-2024, wherein the claim of the applicant has been opposed and submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantially changed by subjecting the same to roasting. Since the claimed process by the applicant is devoid of any test report and roasting is well inclusive in heat treatment mentioned in Chapter Note 3 of Chapter 8, the applicant s contention does not hold any water. After roasting, the end product remains dried areca nut, which is well defined in Chapter 8 up to 6 - digit level. 3.4 In the process flow to make roasted betel nut, one set or process are found to be intended for cleaning, the second set for heating and roasting. These processes are clearly covered by the Chapter Note 3 to Chapter 8 (supra). In the instant case, betel nuts after being roasted are cooled and this fact per se would not exclude the end-products from the scope of dried nuts . Further, it is equally obvious that roasting or mere addition of certain additives for the limited purpose of enhancing preservation or appearance or ease of consumption per se does not result in obtaining a preparation of betel nut. Therefore, the process to which raw betel of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Notes. Hence at the end of the said processes, the betel nuts retain the character of betel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. 3.8 The issue has been examined by the authority itself in number of cases and consistently viewed and held that the Chapters are organised as per evolution which is evident by the fact that the edible nuts and fruits are classified under Chapter 8, preparations of vegetables, fruits, nuts or other parts of plants under Chapter 20 and miscellaneous edible preparations under Chapter 21. Hence, since the roasted betelnut which did not undergo any preparation is rightly classifiable under Chapter 8. Further, reliance is placed on the following Advance Rulings : (i) CAAR Delhi vide Ruling No. CAAR/Del/Vaibhav/21/2021 in the case of M/s. Vaibhav Enterprises; (ii) CAAR Delhi vide Ruling No. CAAR/Del/Sarveshwari/11/2021 in the case of M/s. Sarveshwari Industries; (iii) CAAR Delhi vide Ruling No. CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruling dated 16-10-2023 and 7-11-2023 respectively. 4.6 That further, it is submitted that the contention of the applicant is duly supported by the explanatory note qua Chapter 20 wherein it is duly clarified that : 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) Homogenised 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 : (1) 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. 4.7 The Explanatory notes are guiding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process . 6.2 Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1(a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapter 7, 8 or 11. Therefore. vegetable, fruit or nut products or preparations made other than by the process Specified in Chapter 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapter 7, 8 or II mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Heading 2008 covers Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.5 The applicant has answered all the queries raised by the Jurisdictional Commissionerate during the Personal Hearing. The queries raised regarding the method of packing of the goods in question and the moisture content have been logically answered by the applicant in its rebuttal submitted in this office. In support of it s arguments the applicant has made reference to the results/reports of some tests of the goods in question carried out at Chennai Customs. I concur with the arguments submitted by applicant in its rebuttal. 7. It is an established fact that in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Tariff Act. The case of Commissioner of Customs Central Excise v. Phil Corporation Ltd. in Appeal (Civil) No. 2215 of 2002, dated 7-2-2008 [2008 (223) E.L.T. 9 (S.C.)] is directly relevant and applicable in the instant case of the applicant. In the judgment of the said case Honourable Supreme Court has held a number of cases, this Court has clearly enunciated that HSN is a safe guide for the purpose of deciding issues of classification. In the present case, the HSN Explanatory Notes to Chapter 20 categorically state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 In the CAAR, Mumbai Ruling Nos. CAAR/Mumbai/ARC/39, 40, 41/2023 in the case of M/s. Universal Impex, the Authority has stated his findings and has ruled accordingly - in view of the specific CTH 2008 19 20: Other roasted nuts seeds in Chapter 20 of the first schedule to the Customs Tariff, HSN Explanatory note to CTH 2008, various Supreme Court rulings upholding guiding value of the HSN Explanatory notes for deciding classification under Customs Tariff Act, 1975 and previously mentioned two Supreme Court judgments classifying roasted nuts which include almonds, betel nut and other nuts under Chapter 20 by taking recourse to HSN explanatory note to Tariff Heading 2008 , I rule that roasted betel nuts are correctly classifiable under the Tariff Item 2008 19 20 of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975. 7.4 The Honourable High Court of Madras in its recent judgment on 1-8-2023, has upheld the classification of Roasted Betel Nuts under CTH 2008 19 20. The Honourable High Court went on to analyse the various aspects in determining classification and summed up that : (a) Roasting is a process treated to be distinct from the process of boiling and drying, in fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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