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2023 (2) TMI 673 - AAR - CustomsClassification of import goods - preparation of Scented & Flavoured and/or Sweetened Betel Nut imported from Vietnam, Thailand or any other country having the description as given in the body of application - whether the addition of flavor or menthol and/or sweetening agent will turn the betel nut into a preparation of betel nut? - to be classified under 0802 80 of the First Schedule to the Customs Tariff Act or not? HELD THAT:- In the case of COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, GOA VERSUS PHIL CORPORATION LTD. [2008 (2) TMI 3 - SUPREME COURT], the issue was whether roasted/salted ground nut and other nuts are classifiable under Tariff Heading 08 or under Heading 20. After discussing the issue in great detail, the Hon’ble Apex Court held that the courts have to make serious endeavour to ascertain spirits and intention of the Parliament in enacting these provisions and once the legislative intention is properly gathered, then the bounden duty and obligation of the courts is to decide the cases in consonance with the legislative intention of the Parliament. In the instant case, the intention of the Parliament is obvious when they inserted Supplementary Note 2 in the Customs Tariff in the year 2008. The Authority has to ascertain whether the product intended to be imported is covered by the said Supplementary Note of Chapter 21. The basic raw material for “Scented & Flavoured and/or Sweetened Betel Nut” is raw betel nut, which is classifiable under Chapter 8, more specifically sub-heading 0802 80. Chapter 8 covers only edible nuts; inedible nuts and fruits being excluded by virtue of Chapter Note 1; and that betel nut/supari are masticatory. However, this item has been subjected to certain processes and added with certain materials, resulting in the question being posed whether the said processes and mixing/addition of certain materials are substantive enough to lead to the said goods being considered as “preparation of betel nut”, that would make them classifiable under Chapter 21 by virtue of Supplementary Note 2 of Chapter 21. At this juncture, it is important to mention that the goods covered by the present application are prima facie “Scented & Flavoured and/or Sweetened Betel Nut” and not “preparation of Scented & Flavoured and/or Sweetened Betel Nut”, as submitted by the applicant; and the question posed for ruling is whether the said “Scented & Flavoured and/or Sweetened Betel Nut” are covered by the scope of expression “preparation containing betel nuts ..” in Supplementary Note 2 to Chapter 21. The decisions in the case of Scented & Flavoured and/or Sweetened supari, M/s. Crane Betel Nut Powder Works [2007 (3) TMI 6 - SUPREME COURT] and M/s. Azam Laminators Pvt. Ltd. [2019 (3) TMI 782 - CESTAT CHENNAI] clearly imply that addition of flavouring agents do not change the character of the goods, meaning in the present case betel nut would continue to remain betel nut and not become preparation of betel nut. Thus, ‘Scented & Flavoured and/or Sweetened Betel Nut’ merit classification under Chapter 8, more specifically 0802 80 of the First Schedule to the Customs Tariff Act.
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