TMI Blog2021 (3) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... unflavoured supari, flavoured supari, and boiled supari. - Ruling No. CAAR/Mum/ARC/3/2021 in Application No. CAAR/Mum/ARC/1/2021 - - - Dated:- 15-3-2021 - M.R. Mohanty Present for the Application : Sh. Somesh Arora (Advocate). Present for the Department : None. RULING M/s. Samreen International Pvt. Ltd., through their legal representatives, M/s. Amicus Rarus, have filed an application for advance ruling under section 28-H of the Customs Act, 1962 seeking advance rulings on the classification of four products, namely, API supari, chikni supari, unflavoured supari, and flavoured supari. It is the applicant's contention that these products do not merit classification under chapter 8(08029000) of the customs tariff and are more appropriately classifiable under chapter 21, and more specifically under sub-heading 2106 90 30. The application dated 30.12.2020 was received in the registry/secretariat of Authority for Advance Ruling, New Delhi (AAR, in short) on 31.12.2020. Consequent upon the appointment of customs Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai w.e.f. 04.01.2021, the said application was transferred to CAAR, Mumbai in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general rules for interpretation of tariff, as well as chapter notes, has opined that areca nuts (boiled as well as dried) merit classification under chapter 8 of the Schedule I to the Customs Tariff Act, 1975 and that the word 'supari' in the tariff entry has been wrongly interpreted while seeking classification of areca nuts under heading 21.06. It has been pointed out that 'Supari' in Hindi, refers both to the areca nut, the primary agricultural produce as well as the preparations of areca nut (secondary products), i.e., betelnut preparations classifiable under sub-heading 2106 90 30. The Principal Commissioner, Nhava Sheva-I, in his comments, has given reference to the two advance rulings of the erstwhile AAR, New Delhi in the cases of M/s. Excellent Betelnuts and M/s Isha Exim, and has stated that pure betelnut or supari, which has not undergone changes, do not merit being labelled as a product of supari' would remain classified under chapter 8, and that there doesn't appear to be any change in the nature of the end product, and therefore, doesn't merit classification under sub-heading 2106 90 20 Reference has also been made to the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s. Excellent Betelnut Products, which is in respect of the first four products listed in the preceding paragraph and M/s Oliya Steel Pvt Ltd. which covers all the five products involved in the present proceedings. In both these rulings, it has been concluded that the products mentioned above merit classification under sub-heading 2106 90 30. In coming to such a decision, reliance has been placed on the supplementary note 2 to chapter 21, insofar as, a conclusion has been drawn that it is not necessary to undergo a change of character for the betelnut (supari) to be classified under chapter 21 in view of the positive language of the supplementary notes, referred supra, which doesn't require any such basic change of character. The erstwhile AAR, in both the aforementioned rulings, was of the opinion that the decision of the Hon'ble supreme court in the case of M/s crane Betel Nut powder Works reported at 2007 (210) E.L.T. 171 (S.C.) has no application in the facts of the cases before them. 9. In the aforementioned backdrop, it is necessary to examine the contending chapters of the tariff. The relevant notes to chapter 8 lay down the following :- 3. Dried fruits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r freeze-dried) and whether the nuts could also be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. 11. Keeping the relevant chapter notes and general guidelines in view, the processes undergone by API/chikni/unflavoured/flavoured/boiled supari need to be examined to determine whether such processes result in products which can be described as preparations containing betel nut, or even after such processes, the resultant products still substantially retain the original character of the raw material, i.e., areca or betel nuts. Examination of the processes undertaken on the raw betel nuts, as submitted by the applicant, reveal that some of the processes are nothing but mere cleaning or removal of impurities, e.g., removal of small/large impurities, blowing of weightless particles, gravity/magnetic separation etc. It is nobody's case that undertaking of such activities would result in a substantially different commodity than the starting raw material, so as to be called as a preparation. The same would be the conclusion with respect to garbling, which refers to the separation of the unwanted portions from the desired end products or sterilization to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the fact that mere crushing of betel nuts into smaller pieces did not bring into existence a different commodity which had a distinct character of its own. ln the aforesaid factual backdrop, the Hon'ble Apex Court observed that. 30. In our view, the process of manufacture employed by the appellant-company did not change the nature of the end product. which in the words of the Tribunal. was that in the end product the 'betel nut remains a betel nut'. The said observation of the Tribunal depicts the status of the product prior ta manufacture and thereafter. In those circumstances, the views expressed in the D.C.M. General Mills Ltd. (supra) and the passage from the American Judgement (supra) become meaningful. The observation that manufacture implies a change. but every change of not manufacture and yet every change of an article is the result of treatment, labour and manipulation is opposite to the situation at hand. The process involved in the manufacture of sweetened betel nut pieces does not result in the manufacture of o new product as the end product continues to retain its original character though in a modified form. (emphasis supplied) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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