TMI Blog2021 (6) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... ered 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 said five goods solely with the prism of the positive nature of Supplementary Note 2 to Chapter 21. The processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavoured supari and boiled 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 good 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sejal, Advocate For the Department : None Ruling M/s. Sarveshwari Industries, a proprietorship concern, having IEC No. AIMPA8017B and GSTIN 07AJMPA8017B2ZO, had filed an application dated 28.07.2020 seeking advance ruling under section 28-14 of the Customs Act, 1962 before the Authority for Advance Ruling (Central Excise, Customs Service Tax), New Delhi (AAR, in short). The said application was received in the O/o of AAR on 28.07.2020. 2. The said application was being processed in terms of section 28-I ibid by the O/o AAR. Consequent upon the appointment of Customs Authority for Advance Rulings (CAAR, in short) in New Delhi and Mumbai with from 04.01.2021, the said application was transferred to CAAR, New Delhi in terms of section 28-F (3) ibid and regulation 31 of CAAR Regulations, 2021. 3. On perusal thereof, and in view of the time limit of three months for pronouncing its advance rulings from the date of receipt of this application prescribed under section 28-1 (6) ibid, it was held that the aforesaid application received in the O/o AAR, New Delhi on 28.0782020 had become time barred for this Authority. 4. However, on constructive interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reca Nut) which is classifiable under Chapter 8; in the instant case, the product is Areca nut also known as betel nut in broken pieces and is not a preparation, as prescribed in Chapter 21, hence will not fall under Chapter 21 ; all the processes as are done for preservation or stabilization of betel nut or for maintaining or improving their appearance will be covered under Chapter note 3 of Chapter 8 and hence the betel nut having undergone such processes will continue to be covered under Chapter 8; the processes detailed in the application of the applicant are covered by the Chapter Note 3 of Chapter 8. It has also been pointed out that the advance ruling dated 07.08.2015 in the case of M/S Excellent Betelnut Products Private Limited, which was further relied upon in the Advance Ruling dated 31.03.2017, in the case of M/S Oliya Steel Private Limited, was rendered without taking into consideration the Chapter Note 3 of Chapter 8 as the contention was not raised therein. Hence rulings are sub-silentio the provisions of Chapter Note 3 of Chapter 8. Hence, they cannot be relied upon as binding precedents. He has placed reliance on the judgement of the Hon'ble Supreme Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are in the name of same company, I intend to proceed to give ruling on the question posed through the application. 8. As per Annexure - I of the application, it is submitted that the applicant proposes to import preparations of Betel Nuts such as API Supari, Chikni Supari, unflavoured Supari, flavoured Supari and Boiled Supari, packed in consumer packing and bulk packing. The process of preparation of the import item is given as under: (i) 'API Supari' : Following processes are conducted on raw green fresh betel 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 stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d import goods is raw betel nut covered under heading 080280 of the schedule to the Customs Tariff Act, 1975. The process of preparation of the import item has been given. (Refer para 8 above). 11. The applicant has contended that the items proposed to be imported, that is the processed betel nut, which is a food preparation of betel nut product known as 'Supari', falls under Chapter heading 21069030 of the Customs Tariff and referred to the Supplementary Note 2 of Chapter 21, which states 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 or menthol. They have stated that the impugned goods intended for import by the applicant are not containing lime or Katha (catechu) or tobacco. It is also contended that all the end products/goods which are proposed to be imported by the applicant would get squarely covered under the Supplementary Note 2 of Chapter 21. Therefore, goods in question merit classification under Chapter 21. It is further stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-heading 21069030, i.e., betel nut products known as supari. 14. 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 be useful. It is seen that with respect to Chapter 8, the HSN prescribes the following as general guidelines: - 'Fruit and nuts of this Chapter may be whole. sliced. chopped. shredded. stoned pulped. grated. peeled or shelled. The addition of small quantities of sugar does not affect the classification of fruit in this Chapter. 15. Further, on perusal of the advance rulings given by the erstwhile AAR, New Delhi, which have been referred to by the applicant, I find that case of M/s Excellent Betelnut Products Pvt. Ltd. do cover the four goods involved in the present proceedings; and in both these rulings, the erstwhile AAR has concluded that the said products merit classification under sub-heading 21069030. I find that in reaching this conclusion, AAR has been of the view that on account of the positive language of the Supplementary Note 2 to Chapter 21, it is not neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 said five goods solely with the prism of the positive nature of Supplementary Note 2 to Chapter 21. 18. Before I proceed to answer the question on which advance ruling has been sought, I wish to clarify that on careful consideration of the legal construct and specific provisions of section 28-J (l) of the Customs Act, 1962, I am of the view that the task before me as the Customs Authority for Advance Rulings cannot be to pass rulings on questions of classification of goods simply based on the previous ruling of AAR, even as I readily acknowledge the persuasive value of the same, Therefore, in arriving at my ruling, I refer to the judgments relied upon by the applicant, concerned Principal Commissioner/Commissioner of Customs and more recently the Customs Authority for Advance Rulings, Mumbai in his Ruling No. CAAR/Mum/ARC/l/2021 dated 15.03.2021 in the case relating to M/S Samreen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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