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2022 (2) TMI 630 - AAR - CustomsClassification of goods - goods namely, API supari, chikni supari, unflavoured supari, and flavoured supari - to be classified under Chapter 21, more specifically under sub-heading 2106 90 30 or not - whether the arguments of applicants that the products intended for import by them do not merit classification under Chapter 8 of the Customs Tariff need to be rejected when the notes to Chapter 8 are read together with the relevant HSN Explanatory Notes? - HELD THAT:- Reliance placed in the Hon’ble Supreme Court in COMMISSIONER OF SALES TAX, LUCKNOW VERSUS DS. BIST AND OTHERS [1979 (9) TMI 168 - SUPREME COURT] wherein it was held that all agricultural produce undergoes some processing on or outside the farm in order to make it non-perishable, transportable, and marketable and just because processing is a bit longer or complicated wouldn’t rob the produce of its agricultural character. The observations of the Hon’ble Supreme Court in the case of CRANE BETEL NUT POWDER WORKS VERSUS COMMR. OF CUS. & C. EX., TIRUPATHI [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 is also an extension of the same line of reasoning. This decision of the Hon’ble Supreme Court has been subsequently followed by the Chennai Bench of the Hon’ble Tribunal 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 this product classifiable under sub-heading 0802 90 19 of Central Excise Tariff which is aligned with Customs Tariff. Thus, even flavoured supari merits classification under Heading 0802 of the Customs Tariff and not under Heading 2106 as argued by the applicant. Therefore, in respect of the products API supari, chikni supari, unflavoured supari, and flavoured supari, it is held that their correct classification is Heading 0802 of the First Schedule to the Customs Tariff Act, 1975 - application allowed.
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