TMI Blog2022 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ss does not result in coming into being of a preparation of the raw material . The processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavoured supari, boiled supari and boiled cut supari are squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Note. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as preparations of betel nut, which is sine qua non for a goods to be classifiable under Chapter 21. Flavoured supari - whether the addition of special flavouring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21? - HELD THAT:- In a recent judgment of the CESTAT, Chennai, in the case of S.T. Enterprises [ 2021 (3) TMI 27 - CESTAT CHENNAI ], the Hon ble Tribunal has noticed that the question is whether by mere boiling and drying whole betel nut it would merit classification under 2106 90 30 and observed that it is needless to say that the earlier decision of the Authority of Advance Rulings are binding and applicable to the parties to the litigation only. The Hon ble Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm that the declarations made in the earlier application remain valid and unchanged, at the earliest to this Authority. It was also informed that the date of receipt of such resubmitted application or affirmation, as the case may be, shall be taken as the date of receipt of their application under Regulation 8(4); and no separate payment of the prescribed fee under Regulation 6(6) of CAAR Regulations, 2021 is required to be made. 5. The applicant vide letter dated 23-2-2021 affirmed that declarations made by them in their earlier application stand valid and unchanged, and requested that they are interested in obtaining ruling of the Authority. Therefore, 23-2-2021 has been taken as the relevant date for reckoning the time limits prescribed under the Customs Act. 6. The concerned Principal Commissioner of Customs (NS-I), JNCH vide his letter dated 4-3-2021 has submitted that the comments in the matter of the applicant as forwarded vide letter of even number dated 23-10-2020 remain unchanged The said Principal Commissioner of Customs (NS-I), JNCH, vide letter dated 23-10-2020, had commented that the goods do not merit classification under CTH 2106 90 20 and would remain classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. In this regard, I note that the concerned Commissioner of Customs, viz. Commissioner of Customs, Tuticorin has commented that any process which changes basic nature of the original product betel nut would result in a product that would fall under Chapter Heading 2106 90 30. 8. In accordance with the procedure prescribed under the CAAR Regulations, 2021. personal hearing was scheduled on 25-3-2021. However, due to internet connectivity issue, the hearing in virtual mode could not take place. Thereafter, hearing in the virtual mode took place on 8-4-2021 wherein Shri B.K. Singh, Advocate submitted that the goods covered by the application are essentially preparations of betel nut (called supari, with various specific names) and therefore, merit classification under Chapter 21. He explained the various processes involved in preparation of different types of Supari, viz. API Supari, Chikni Supari, Unflavoured Supari and Boiled Supari. Shri Singh referred to the rulings pronounced by the erstwhile Authority for Advance Rulings on the similar matters, wherein it has been held that such goods are classifiable under Chapter 21 of the Import Tariff. He submitted that the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nut : removing of large impurities by labourers, boiling in water for 6 hours, mixing food starch, drying, polishing and packaging. (ii ) Chikni Supari : Following processes are conducted on raw green fresh betel nut : removing of large impurities by labourers, slicing in small pieces, boiling in water for 6 hours, mixing food starch, drying, polishing and packaging. (iii ) Unflavoured Supari : Following processes are conducted on raw dried betel nut : removing of large impurities by labourers, removing of small impurities by de-stoner, metal deflection (removal of metal item, if any), garbling, polishing in polishing machine, 3 stage cutting, blowing of weightless particles in blowers, gravity separation by automatic gravity separation machine, roasting in fire gas rotary roaster, metal detection by magnetic metal detectors and packaging. (iv ) Flavoured Supari : Following processes are conducted on raw dried betel nut : removing of large impurities by labourers, removing of small impurities by de-stoner, metal deflection (removal of metal item, if any), garbling, polishing in polishing machine, sterilization to remove bacterial count, splitting (half) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been given wherein apart from preparation of Boiled Supari, process of preparation involved in a number of other product, namely, API Supari, Chikni Supari, Unflavoured and Flavoured Supari has also been elaborated. Since the applicant proposes to import a preparation of betel nuts known as Boiled Supari packed in consumer packing and bulk packing, admitting in parallel that the principal raw material used by the foreign manufacturer for the proposed import goods is raw betel nut covered under Chapter 8, specifically falling in Heading 0802 90 00 of the Schedule to the Customs Tariff Act, 1975. The question on which ruling has been sought relates to the items proposed to be imported i.e. Boiled Supari. However, the processes involved in obtaining six different types of Supari that have been described in the application, there is no specific reference to the process of boiling in respect of flavoured and unflavoured supari. However, I note that the process in the said two cases is described to begin with raw dried betel nut, presumably obtained involving the process of boiling. 12. The applicant has contended that the item proposed to be imported, that is the processed betel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) To improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities of glucose syrup), provided that they retain the character of dried fruit or dried nuts. 14.2 In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are accommodated under 0802 80 10, 20, 30, 90, and 0802 90 00, respectively. 14.3 On the other hand, Chapter 21 covers miscellaneous edible preparations. The relevant Supplementary Note 2 to the said Chapter lays down that, 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, menthol. 14.4 In this Chapter, the related entry, with respect to betel nuts, is the sub-heading 2106 90 30, i.e., betel nut products known as supari. 15. Further, since the question relates to classification of goods proposed to be imported, guidance of the Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six different goods, each known as supari in common trade parlance, albeit with differentiator, viz. API, Chikni, unflavoured, flavoured, boiled and boiled cut. The basic raw material for each of the six goods is raw betel nut, which is classifiable under Chapter 8, more specifically sub-heading 0802 80. I also note that Chapter 8 covers only edible nuts; inedible nuts and fruits being excluded by virtue of Chapter Note 1; and that betel nut/supari are masticatory. However, these items have been subjected to certain processes and added with certain materials, resulting in the question being posed whether the said processes and mixing/addition of certain materials are substantive enough to lead to the said six goods be considered as preparation of betel nut that would make them classifiable under Chapter 21 by virtue of Supplementary Note 2 of Chapter 21. Alternatively, whether the processes carried out on the same for cleaning, preserving and making them more attractive to certain tastes/preferences are too minor to fall short of rendering them as preparations of betel nuts. Further, it would be inadvisable and inappropriate to approach the issue of classification of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a preparation of the raw material . Notwithstanding the vehemence with which the said argument was made, I do not consider the same worth further belabouring. Therefore, I conclude that the processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavoured supari, boiled supari and boiled cut supari are squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Note. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as preparations of betel nut, which is sine qua non for a goods to be classifiable under Chapter 21. 21. In the case of flavoured supari, the question to be answered is whether the addition of special flavouring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21. In this regard, the judgment of the Hon ble Supreme Court of India in the case of M/s. Crane Betel Nut Powder Works and of the CESTAT, Chennai in the case of M/s. Azam Laminators Pvt. Ltd. [2019 (367) E.L.T. A22 (Tri. - Chennai)] [where scented betel nut was being manufactured by cracking of dried betel nut into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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