TMI Blog2021 (7) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... ble? - HELD THAT:- The supari which is the a processed betel nut cut into pieces at three stages, free of finer particles and roasted could only be considered as a product which will fall under CTH 21. Whereas, the appellants are clearly attempting to mislead the department that whole betel nut has to be treated as API Supari. They have not provided any kind of evidence to prove that what is known as API supari in the market parlance. It is also on record that M/s. Nadaraj International company Ltd., has issued identical type of certificate in the case of Commercial Invoice 03/2020 related to M/s. S.T. Enterprises. Chapter 8 clearly covers edible fruits and Chapter Notes 3 states dried nuts of this chapter may be partially rehydrated or treated for the following purposes, i.e. moderate heat treatment for additional preservation or stabilization and by addition of vegetable oil to improve or maintain their appearance. The GENERAL notes of Chapter 8 states that Fruits and nuts of the Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled - As per Chapter Notes 3 the character of the betel nut is retained. The appellants have not provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le nuts and classifiable U/CTH 0802 80 10 and a prohibited item for import if the CIF value of the impugned goods is lesser than ₹ 251/- per kg.; that on a reasonable doubt samples were drawn and forwarded to the Chemical Examiner, Customs Laboratory, Custom House, Chennai-600001 with the certain queries. 3. After test, the Chemical Examiner, CRCL had reported that the sample is in the form of Whole Betel-nut. Whether it is Boiled/Roasted Betel-nut could not be ascertained here for want of specification for the same. It is free of Cardamom and added food starch ; that the appellants classified the impugned goods U/CTH 2106 90 30; that according to the chemical examiner s report the betel-nuts had not been boiled/roasted to the extent and could not be detected that the cardamom and other relevant spices were added or not; that none of the other processes, said to have been undertaken, can make the betel-nuts be termed as a product of betel-nut or preparations containing betel-nut ; that according to the Supplementary Note 4 to the Chapter 21 of the Customs tariff, the impugned goods do not merit classification U/CTH 2106 90 30; that as per Chapter Note 3 of Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tel nuts (commonly known as API supari in trade parlance). The matured raw betel nuts harvested from the trees were dried in open space and grade wise charting done in grading machine, the prime quality nuts obtained at the time of grading is mostly sold in the market as betel nut whole. The other grade nuts received are commonly used for preparation of suparis by various process. In the preparation of the API supari (boiled betel nuts the various process involved namely removing of large impurities by labour, boiling in water for 6 to 8 hrs. with lemon peelings/mixing food starch (optional), drying in the sunlight, removal of any metal pieces by magnetic metal detectors, polishing (optional) and packaging. 5.1 The Authorised Officer mainly relied on the chemical examiner report received from the Customs Laboratory vide para 3 of the order. 5.2 The chemical examiner in her report certified that she could not ascertain whether the goods under import is boiled/roasted for want of specification in the laboratory. The analysis report given by the Scientific Food Testing Services (P) Ltd., NABL Accredited FSSAI Notified laboratory dated 23-11-2020 have certified the sample as be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning agents like cardamom, copra, menthol and foods starch can be present or absent. Similarly, shape of the product does not alter the classification as the product has undergone process like cleaning for removing the impurities and boiled in water for 6 hours, dried in sunlight in the open yard, polished (optional) and packed. This product is known as API supari (Boiled betel nut) in common trade parlance. Further reference is invited to the Chapter note provided in HSN under Chapter No. 8, heading general; it reproduced below for ready reference : This chapter covers fruit, nuts and peel of citrus fruit or melons (including watermelons), generally intended for human consumption (whether as presented or after processing). They may be fresh (including chilled), frozen (whether or not previously cooked by steaming or boiling in water or containing added sweetening matter) or dried (including dehydrated, evaporated or freeze-dried); provided they are unsuitable for immediate consumption in that state, they may be provisionally preserved (e.g. by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions) . Similarly, under the same heading vide par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings classifying the goods under CTH 21 and they are applicable to them also. He also relied upon the SIIB clearance in this matter vide F. No. 348/2020-SIIB, dated 19-11-2020, wherein they have clearly noted the advance rulings in this matter. Vide HSN (general notes) CTH 8 also it is clear that betel nut gets covered only if not suitable for immediate consumption in that state. He also referred to FSSAI certificate dated 23-11-2020 issued by the Scientific Food Testing Services Pvt. Ltd., whereas it has been stated that the impugned goods i.e. betel nuts (boiled supari) were brown colour whole nuts. He also relied upon the Custom House Chemical Lab report, which says that they could not ascertain for want of specification whether it is boiled or not. Regarding the value he has mentioned that the item is less inferior quality that is why the price is low, being a prepared product classifiable under CTH 21, the minimum index price is not applicable. In view of the above he pleaded that both the appeals may be allowed and the impugned goods may be classified under CTH 21 by setting aside the speaking order of the Authorised Officer. 7. The Authorised Officer, J. matadee FTWZ has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by the DRI authorities contradicting the stand of the Commissioner of Customs before the advance ruling authority and after the advance ruling authority has ruled in favour of the applicant in that case. The Hon ble HC has only stated the applicability and binding nature of the ruling advance ruling authority in paras 9 10 of the judgment in the above writ petition. 7.4 The appellant has contended that in view of the supplementary Notes 4 to Chapter 21 of the CTH that a product to qualify as Supari it has to be product of betel nut without containing Lime, Katha (catechu) and Tobacco and with or without any flavouring/conditioning agent such as cardamom, menthol copra and the shape and condition of the product has not been altered and that their product is known as API Supari in trade parlance. The claim of the appellant based on the write up of the supplier from Myanmar, M/s. Nadaraj International Company Ltd., that the goods were roasted and spices added were factually incorrect as revealed in the report of the Chemical Examiner, Custom House, Chennai recording that the item is free of cardamom and any food starch. 7.5 The goods being whole areca nut is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Z, Kancheepuram, TN are legally correct or not in the case of the imported goods? (iv) Whether the citation of the advance rulings in the case of M/s. Excellent Betelnut Products Pvt. Ltd., Nagpur is applicable to both the appellants i.e. M/s. S.T. Enterprises, New Delhi. Ans. M/s. Ayush Business Overseas, New Delhi? (v) Whether the SIIB letter in F. No. 348/2020-SIIB, dated 19-4-2020 cited by the consultant has any bearing in the issue on hand? (vi) Whether both the appeals have any merit? 10. To decide the first question, it would be appropriate to refer to the test reports issued by FASSAI notified laboratory - Scientific Food Testing Services (P) Ltd., Anna Nagar West, Chennai. The test report issued in the case of M/s. Aayush Business Overseas is scanned and reproduced below for easy reference; The report very clearly stated in its first page that the physical appearance of the betel nuts are Brown Colour Whole Nuts and in the page No. 3, the opinion has been given by the Lab stating that the sample description confirms to BETEL NUTS (BOILED SUPARI) as stated in the test memo. The FSSAI notified lab report can be considered only for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the exporter s letter/certificate, M/s. Nadaraj International Company Ltd., Yangon issued with respect of the consignments vide Bill of lading - BLPLRGM/2002/348, dated 4-11-2020 in the case of M/s. Ayush Business Overseas (available in Case file F. No. JMFTWZ/107/2020-21) (B/E No. 1017898/18-11-2020). From the certificate it is observed that generally the betel nut is boiled in water and polished and it is cut in 3 stages and the fine particles created have been blown away. The last part of the process is to give a better look by roasting it by fire gas roaster and add cardamom or any other relevant spices. The above said copy of the exporter s letter/certificate is scanned and reproduced for easy reference and to make the things clear. IMAGE NOT REPRODUCED From the above clinching evidence it is very clear that what they generally export as supari is cut and processed betel nut and not the whole betel nut. Therefore, the supari which is the a processed betel nut cut into pieces at three stages, free of finer particles and roasted could only be considered as a product which will fall under CTH 21. Whereas, the appellants are clearly attempting to mislead th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As discussed earlier in paras 13 14 of this order, the impugned goods are different from the goods i.e. API Supari Chikni Supari discussed in the advance ruling order and therefore, they cannot seek the benefit of API Supari . But the appellants are hell bent to mislead the department and get an undue benefit by classifying the betel nuts-whole under CTH 21. As proved by the test reports and by the evidences the betel nut is whole and just boiled and it is rightly to be classified under CTH 0802. 15. The consultant in his written submission dated 22-12-2020 stated that the classification issue of supari has attained finality in view of the advance rulings by the Principal Bench, New Delhi (ref. para 3.6 of this order) and it must be stated that already this point has been clarified in the above paras and the issue of classification depends upon each and every case and it has to be approached before the Advance Ruling Authority to get a specific order from it. Therefore, the issue of classification of whole betel nut has attained finality is totally misconceived. 16. He also drawn the attention to the Hon ble High Court of Madras orders in the case of M/s. Isha Exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants goods. 18. For classification of goods the only and right option available is to refer to the HSN explanatory notes. Reliance is also placed on the following case laws; (i) L.M.L. Limited v. Commissioner of Customs [2010 (258) E.L.T. 321 (S.C.)], the Hon ble Supreme Court has held; Safe guide to resolve dispute on tariff classification is internationally accepted nomenclature emerging from Harmonised System of Nomenclature (HSN) - HSN Explanatory Notes are dependable guide for interpretation of Customs Tariff. (ii) O.K. Play (India) Ltd. v. CCE, Delhi III [2005 (180) E.L.T. 300 (S.C.)] 8. The scheme of the Central Excise Tariff is based on Harmonized System of Nomenclature (for short HSN ) and the explanatory notes thereto. Therefore, HSN along with the explanatory notes provide a safe guide for interpretation of an Entry. 9. Further, equal importance is required to be given to the Rules of Interpretation of the Excise Tariff. Under Rule 3(a), it is provided that the heading which provides a specific description shall be preferred to a heading having a more general description. For example, in the case of toys referred to in the HSN Heading and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the exterior of which may be covered with a deposit of dried natural sugar thus giving the fruit an appearance somewhat similar to that of the crystallised fruit of heading 20.06. However, this Chapter does not cover fruit preserved by osmotic dehydration. The expression osmotic dehydration refers to a process whereby pieces of fruit are subjected to prolonged soaking in a concentrated sugar syrup so that much of the water and the natural sugar of the fruit is replaced by sugar from the syrup. The fruit may subsequently be air-dried to further reduce the moisture content. Such fruit is classified in Chapter 20 (heading 20.08). Chapter 8 clearly covers edible fruits and Chapter Notes 3 states dried nuts of this chapter may be partially rehydrated or treated for the following purposes, i.e. moderate heat treatment for additional preservation or stabilization and by addition of vegetable oil to improve or maintain their appearance. The GENERAL notes of Chapter 8 states that Fruits and nuts of the Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. In this case the shell of the betel nut has been removed, and the outer layer of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er purposes. Such preparations may contain a small quantity of visible pieces of ingredients. SUPPLEMENTARY NOTES : 1. In this Chapter, Pan masala means any preparation containing betel nuts and any one or more of the following ingredients, namely : lime, katha (catechu) and tobacco whether or not containing any other ingredient, such as cardamom, copra or menthol 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 or menthol. 3. For the purposes of tariff item 2106 90 11, the expression Sharbat means any non-alcoholic sweetened beverage or syrup containing not less than 10% fruit juice or flavoured with non-fruit flavours, such as rose, Khus, Kevara, but not including aerated preparations. 4. Tariff item 2106 90 50. inter alia, includes preparations for lemonades or other beverages, consisting, for example, of flavoured or coloured syrup, syrup flavoured with an added concentrated extract, syrup flavoured with fruit juice and intended ..... X X X X Extracts X X X X X X X X Extracts X X X X
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