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2021 (3) TMI 27 - AT - CustomsClassification of imported goods - betel nut (Areca-nuts) - classified under CTH 21069030 or under CTH 08028010? - prohibited goods or not - According to appellants the raw betel nut obtained from tree has been subjected to boiling and made ready for human consumption - HELD THAT:- The betel nuts which are ‘whole’ nuts and classifiable under CTH 08028010 are prohibited for import if the CIF value of the goods is lesser than ₹ 251/- per kg. The declared quantity of the goods in appeal filed by Ayush Overseas is 79,520 tons valued at ₹ 89,63,892/- @ ₹ 112.75 per kg. Thus, if the classification is under Chapter 8, the import of these nuts would be against the provisions of law. It is not the case of the appellants that the betel nuts are not ‘whole’. In other words, appellants do not have a case that the imported goods are broken or crushed betel nut. They have imported betel nut in the “whole” form and only contention is that nuts have been subjected to certain processes of manufacture and therefore would fall out of Chapter 8. Though several stages/ process are claimed to be done in the write up given by supplier, during the argument the process undertaken was mainly confined to boiling in water and drying in sun light. Even if some stage of drying or rehydrating or treatment is done for preservation / stabilization or maintaining the appearance, as long as the nuts retain the character of dried nuts, they fall under Chapter 8. The counsel for appellants had placed before us samples of dried whole betel nut (without husks) as well as sample of the imported goods. We were able to see that the imported goods are also whole but more dried. It can be seen that CTH 21069030 takes in the items “betel nut product known as suprai”. To be more clear what is described therein is ‘betel nut product’ and not betel nut ‘whole’ as seen in Chapter 8. Chapter Note 2 of Chapter 21 also speaks about ‘betel nut product’ and not betel nut ‘whole’. As per Chapter Note 2 of Chapter 21 ‘betel nut product’ means any preparation containing betel nut, but not containing lime, katha and tobacco. It may or may not contain cardamom, copra, or menthol. The appellants do not have a case that their goods contain cardamom, copra or menthol or any additives. Counsel for appellants has made much effort to contend that after boiling though ‘whole’ the betel nut becomes ‘betel nut product’. Since betel nut has retained its character of being whole and it does not contain any other ingredients such as cardamom, copra or menthol, it cannot be said that impugned goods are ‘preparations containing betel nut’ or ‘betel nut product/supari’ so as to fall under tariff heading 21069030. Hon’ble Supreme Court in the case of Crane Betel Nut Powder Works Vs CC & CE Tirupathi [2007 (3) TMI 6 - SUPREME COURT]. The facts of the case before Hon’ble Apex Court was that the assessee was marketing betel nuts after cutting into different sizes and adding essential / non-essential oils, menthol, sweetening agents etc. The assessee classified the items under Chapter 21 and cleared by paying excise duty. Later, they revised classification to be under Chapter 8 taking the view that crushing betel nuts and adding the above ingredients did not amount to ‘manufacture’. The Hon’ble Apex Court reversed the Tribunal decision to hold that the said process would not amount to ‘manufacture’. The process involving manufacture does not always result in the creation of a new product and the classification was held to be under Chapter 8. Since the import goods are ‘betel nuts whole’, these would merit classification under Chapter 8 and specifically under Chapter 08028010 as classified by the department. We cannot refrain from stating that the Commissioner (Appeals) has made detailed discussion of facts and the law and arrived at the correct classification. Appeal dismissed - decided against appellant.
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