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2021 (5) TMI 1078 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS DELHIClassification of goods intended to be imported - preparation/product of betel nut (API supari, Chikni supari, unflavoured supari and boiled supari) commonly known as Supari, which does not contain lime or katha (catechu) or tobacco but may or may not contain any other ingredients such as food starch, cardamom, copra, mulethi, menthol (flavours), perfume etc. - classifiable under the CTH 2106 90 30 as food preparation or not? - HELD THAT:- 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, Addition of starch would be included under such process. It is found that these processes are clearly covered by the Chapter Note 3 to Chapter 8. It is also noted that during the personal hearings the learned advocate requested to consider the distinction arising out of moderate and heavy boiling. In this regard, it is also submitted in the application 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. It is found in the instant case, betel nuts after being boiled are dried; and this fact per se would not exclude the end-products from the scope of "dried nuts". Further, it is equally obvious to me that boiling 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. Speaking more generally, in view of the design of the Schedule to the CTA, HSN and plethora of judgements, besides common understanding and parlance, every irreversible process docs not result in obtaining a new product with a distinct classification even at the eight or ten-digit level; and every irreversible process does not result in coming into being of a "preparation of the raw material". The processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavoured supari and boiled supari are squarely 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, which is sine qua non for a good to be classifiable under Chapter 21. Flavoured supari - whether the addition of special flavouring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21? - HELD THAT:- Hon'ble Supreme Court of India in the case of CRANE BETEL NUT POWDER WORKS VERSUS COMMR. OF CUS. & C. EX., TIRUPATHI [2007 (3) TMI 6 - SUPREME COURT] in the case of AZAM LAMINATORS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY (VICE-VERSA) [2019 (3) TMI 782 - CESTAT CHENNAI] [where scented betel nut was being manufactured by cracking of dried betel nut into small pieces, and thereafter, gently heating it with addition of vanaspati oil, sweetening and flavouring agents and marketed in small pouches as Nizam Pakku (in Tamil)/Betel Nut (in English), the Hon'ble CES TAT held the resultant product classifiable under sub-heading 08029019 of Central Excise Tariff and not under 21069030 as supari for period after 07.07.2009] are relevant. Put simply, these decisions clearly imply that addition of flavouring agents do not change the character of the good, meaning in the present case betel nut would continue to remain betel nut and not become preparation of betel nut. Thus, all the five goods placed before me for consideration, i.e., API supari, chikni supari, boiled supari, unflavoured supari, and flavoured supari, merit classification under Chapter 8 of the First Schedule to the Customs Tariff Act, and more precisely, under the heading 0802. This is so in view of the fact that the processes to which raw green fresh betel nuts have been subjected to obtain the said five goods are squarely in the nature of processes mentioned in Note 3 to Chapter 85 and have not materially changed the essential character of betel nuts, as held by the Hon'ble Supreme Court in the M/S Crane Betel Nuts case. Further, the said five goods are not classifiable under sub-heading 21069030, as contended by the applicant, since they have not attained the character of "preparations" of betel nut, which is sine qua non for a good to be so considered.
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