TMI Blog2006 (6) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... nactment of CETA (Amendment) Act, 2004 on 28-2-2005. CSH 21062 hitherto adopted by the appellants reads as betel nut product known as supari, whereas the new CSH they sought to adopt reads as betel nut other , viz. betel nuts in forms other than whole, split, powdered and ground. As per the impugned order, the subject item is classifiable under CSH 08029019. 3. The product, Nizam Pakku , is manufactured by pulverizing dried betel nuts into pieces and treating those pieces with vanaspathy, sugar, saccharin, glucose syrup, cloves, cardamom, and at times also mixing with borneoflakes. According to the respondents, the broken nuts are mildly roasted with vegetable oil and treated with the other materials to produce scented supari . In the process, the pieces of nuts mildly heated with vegetable oil are flavoured with spices, sweetened with sugar and saccharin, perfumed with menthol and then packed in small paper pouches in which it is sold. The paper packets bear the name Nizam Pakku (pakku is tamil for betel nut and Nizam, the brand name). The packets also carry the description sugantha supari in a few vernacular languages and its English version scented betelnut . 4. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority. The subject product was marketed by the respondents as ready to eat food product and they had been classifying the same under the CH 2106 before the CETA (Amendment ) Act, 2004 was passed. The product was known as scented betel nut or scented supari. From 28-2-2005, the following supplementary note defining betel nut product known as supari was introduced in Chapter 21 :- NOTE 2. In this chapter Betel nut product known as supari means any preparation containing betel nuts but not containing any one or more of the following ingredients, namely lime, katha (catechu) and tobacco, whether or not containing any other ingredients, such as cardamom, copra and menthol. 8. On 12-4-2005, in CCE v. Crane Betel Nut Powder Works, Bangalore Bench of the Tribunal vide Final Order No. 562/2005 and in appeal against that order, the honourable Andhra Pradesh High Court in their judgment dated 5-9-2005 in Central Excise Appeal No. 20 of 2005 had rejected the claim of M/s. Crane Betel Nut Powder Works to classify a similar product produced and marketed by them as unmanufactured betel nuts not exigible to duty. Both the authorities decided the correct classification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that the changes introduced in the tariff with effect from 28-2-2005 did not affect the existing classification of various commodities. 12. With effect from 28-2-2005, the erstwhile Chapter 8 was enlarged to cover, inter alia, various edible nuts in various forms such as shelled, whole, split, ground etc. under separate and specific headings. Thus betel nut was covered under Chapter Heading 0802 with sub-headings for betel nuts whole, split, ground etc. The relevant entries under CSH 0802 90 for betel nuts and other nuts not mentioned by name in the tariff were as follows: Tariff item Description of goods Unit Rate of duty 1 2 3 4 Betel Nuts 0802 90 11 -----whole Kg. Nil 0802 90 12 -----Split Kg. Nil 0802 90 13 -----ground Kg. Nil 0802 90 19 -----Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 328 (Del.)], an established classification could not be changed unless fresh facts were brought on record, a process of manufacture was changed, the relevant entry underwent a change or there was a judicial pronouncement which necessitated change of classification. Various changes were made to the entries in the tariff w.e.f. 28-2-2005. In their Cross-objection, the respondents claimed that Chapter Notes 2 and 3 were introduced in Chapter 8 on 28-2-2005 and the revision of classification was sought owing to changes in the Tariff Act. Since the amendment to the act, betel nuts (in various physical forms) were specifically covered under Heading 0802. As per the ratio of the Gujarat High Court in the case of Darshan Hosiery Works v. UOI [1980 (6) E.L.T. 390 (Guj.)] such food preparations alone would be covered by Chapter Heading 2106 which were not elsewhere specified or included , whereas the subject product figured in Chapter 8 as betel nuts. The decisions on the subject product cited by revenue were rendered before the item betel nuts was enlisted (by name) in a Tariff heading and therefore, the earlier decisions did not apply in the changed legal context. There was no estoppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hes under heading for Dhana Dal (CH2108) or as spices (CH 0903) were relevant and supported their argument that specific entry of Chapter 8 had to be followed in preference to a residuary entry in the subject case also. The appellants produced a shipping bill to show that for assessment of export of the subject product Chapter sub-heading 0802 90 12 was adopted by Tuticorin Customs. This fact was relevant for its classification in the Central Excise Tariff under Chapter 8. In their case, betel nuts were not roasted but mildly heated for mixing with vanaspathy. The HSN covered betel nuts under heading 0802 and described its use as masticatory. Their product betel nuts were also used as masticatory. Therefore, the product fell under Chapter 8. It was also submitted that the judgment in the case of CCE v. Crane Betel Nut Powder Works delivered by the Hon ble High Court of Andhra Pradesh and the Bangalore Bench of the Tribunal were rendered prior to the introduction of Note 3 to the Chapter 8 and so were not relevant to the issue on hand. Moreover, in the present tariff betel nuts was specifically mentioned under Chapter 8. It was to be noted that the heading 2106 covered only food p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 excluded the impugned goods since edible nuts of Chapter 8 covered betel nuts and were therefore a food preparation specified or included elsewhere than in 2106 is fallacious as Chapter 8 covers nuts and not food preparations. He has also held that Notes 3(a) and 3(b) to Chapter 8 and specific entry for betel nuts under Chapter 8 came into force only from 28-2-2005. This is also not relevant as these guidelines always existed in the explanatory notes to the Chapter 8 in HSN and the present Heading for edible nuts was in Chapter 8 of the CETA Schedule for a very long time. 20. Classification of excisable goods is governed by the Interpretative Rules. As per Rule 1, classification shall be determined according to the terms of the Heading and any relative Section or Chapter notes and, provided such Headings or Notes do not otherwise require, according to the other Rules. If for any reason the classification of the product appears appropriate under more than one heading, the heading which provides the most specific description has to be preferred to headings providing a more general description. 21. In the subject case the rival headings canvassed for the product are 08029019 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccharin, which help neither in preservation of the nuts nor in improving its appearance. In the circumstances, the product cannot be classified as dried nuts of Chapter 8. 24. Chapter Heading 21 covers miscellaneous edible preparations. Chapter Sub Heading 2106 90 30 covers Betel nut product known as supari . Supplementary Note 2 to Chapter 21 defines this item as any preparation containing betel nut, but not containing any one or more of the following ingredients, namely, lime, katha(catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copra and menthol. The subject product fully conforms to the description preparation containing betel nut along with several other permitted ingredients. There cannot be any dispute that the impugned item is a product manufactured with betel nuts as the main raw material, sold and known in the market as Supari . In G.S. Auto International Ltd. v. CCE, Chandigarh [2003 (152) E.L.T. 3 (S.C.)] the Apex Court ruled that the goods are to be classified as to how they are referred to in the market by those who dealt with them. Therefore, the impugned goods are correctly classifiable under Chapter Sub-Heading 210690 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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