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2023 (6) TMI 1011 - AAR - CustomsClassification of goods proposed to be imported - Processed API Betel-nut product known as Supari - Processed Betel-nuts unflavoured chemically processed Supari in small cut-pieces (not split) - classifiable under Chapter heading 0802 80 or 2106 90 30? - HELD THAT:- In this chapter, the entry 0802.80 refers to areca nuts, used chiefly as a masticatory. Thus the Explanatory Notes to Chapter-I indicate that chapter I covers nuts intended for human consumption (whether as presented or after processing); whether they are fresh, frozen (whether or not previously cooked by steaming or boiling in water) or dried (including dehydrated, evaporated or freeze-dried) and whether the nuts could also be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. The processes to which the subject goods would be subjected to, as described in their submission, appear more of a process for additional preservation or stabilization and/or to improve or maintain their appearance only and they retain their original character. In this context the decision of the Hon'ble Calcutta High Court in the case of Killing Valley Tea Co. v/s Secretary to State [1920 (5) TMI 1 - CALCUTTA HIGH COURT] is worth mentioning, wherein it was held that a tea leaf remains the same even after being subjected to mechanical processes like withering, crushing, roasting, fermenting etc. is a definite pointer to the principle that needs to be applied for classification in such matters. he observations of the Hon'ble Supreme Court in the case of M/S. Crane Betelnut Powder Works [2007 (3) TMI 6 - SUPREME COURT], that the process of cutting betel nuts into small pieces and addition of essential/non-essential oils, menthol, sweetening agent etc. did not result in a new and distinct product having a different character and use also an extension of the same line of reasoning. However, after amendment by insertion of a note in chapter 21 of Central Excise Tariff these decisions are of no relevance at present in deciding classification matters under the Customs law. The claim of applicant that these processes are very crucial for changing the essential characteristics of raw tendered betel nuts with the resultant betel nut product which, as argued by the applicant, is chemically processed and is most appropriately classifiable under CTH 2106 90 30 falls flat solely due to the fact that these are carried out to preserve or to stabilize and/or to improve or maintain their appearance, and in fact they aid to retain the character of betel nut. In my opinion the applicant has failed to substantiate their claim that the subject goods are chemically processed. Notwithstanding the claim of the applicant to any chemical process discussed above it is observed that the resultant product remains the same — betel nut may be with variation in arecoline and tannin contents. Due to this no preparation of betel nut has come in to existence requiring classification under chapter 21. Hence it is not found that the applicant's recourse to and reliance placed on the research paper as legally acceptable for deciding the classification of subject goods. HSN Explanatory Note under heading "General" to chapter 8 provides that fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. Further, it is also provided that the addition of small quantities of sugar does not affect the classification of fruit in this Chapter.' Thus, the HSN explanatory notes to Section I indicate that chapter 8 covers nuts intended for human consumption (whether as presented or after processing); whether they are fresh, frozen (whether or not previously cooked by steaming or boiling in water) or dried (including dehydrated, evaporated or freeze-dried) and whether the nuts could also be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled - it is thus concluded that the processes described by the applicant do not necessitate the subject goods to be moved from the purview of chapter 8 to bring under the ambit of chapter 21 for the purpose of classification. Thus, the subject goods placed before me for consideration, i.e., 1) Processed API Betel-nut product known as Supari and 2) Processed Betel-nuts unflavoured chemically processed Supari in small cut- pieces (not split) merit classification under chapter 8 of the Customs Tariff, and more appropriately, under the heading 0802, as under: Processed API Betel-nut product known as SUPARI (Not Prepared): 0802 80 10. Processed Betel-nuts unflavoured chemically processed SUPARI in small cut pieces (Not split): 0802 80 90.
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