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2015 (12) TMI 481

Head Note:
Classification of processed betel nut - deemed manufacture - whether or not containing ingredients such as food starch, spices, mulethi, flavors, perfume etc., though not containing lime or katha (catechu) or tobacco, and will the resultant products be classifiable under the Chapter/Heading 21069030 - Held that:- From the preparation process of the four products, it is clearly seen that the original betel nut which is a main ingredient in all these four preparations is mixed with food starch after it undergoes the process of boiling. The addition of food starch is common in first two of products namely API Supari and Chikni Supari. - Insofar as the other two products are concerned, the unflavored Supari undergoes a process like removal of metal item then the product undergoes the process garbling and polishing in the polishing machine then it is further cut and cleaned in a blower machine then it is roasted in fire gas and thus undergoes a change in its character. Fourth product is a flavored supari which undergoes all the processes like unflavored supari but thereafter the products such as spices/or Mulethi are mixed with the cut pieces of supari. There can be no dispute that all these four products would be essentially known as supari. But as the learned counsel points out the original betel nut undergoes changes and is mixed with some other items like food starch, Mulethi, Copra etc. In our opinion, therefore, the products which the applicant intends to import prima facie fits in Chapter 21 Supplementary Note No. 2 which we have quoted.

The Supreme Court in cranes reported in [2007 (3) TMI 6 - SUPREME COURT OF INDIA] held that since the betel nut which has undergone the processes does not lose its original character of supari, it does not amount to the manufacture or a new product and thus found in favour of the manufacturer. We would have ordinarily been persuaded to accept this contention that the preparation of the new product does not change its character of the betel nut but for the fact that immediately thereafter an amendment was brought even to the Central Excise Tariff which is to the following effect :

'6. In relation to product of tariff item 2106 9030, the process of adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients other than line, katha (catechu) or tobacco to betel nut, in any form, shall amount to “manufacture”.'

The query put by the applicant is answered in affirmative that these products shall be covered in Chapter 21 and not in Chapter 8. - Decided in favour of assessee.


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