Great Nuts Impex Pvt. Ltd. Vs Commissioner of Customs Delhi & Ors. (Delhi High Court)
Delhi High Court held that Betal Nuts known as ‘Boiled Supari’ is classifiable under Chapter 8 of the Customs Tariff Act and not under Chapter 21 of the Customs Tariff Act.
Facts- M/s Great Nuts Impex Pvt. Ltd. (Appellant in CUSAA 17/2022) had filed an application dated 23.09.2020 before the Customs Authority of Advanced Ruling (CAAR) seeking an advance ruling under Section 28H of the Customs Act regarding classification of the goods proposed to be imported. M/s Great Nuts Impex Pvt. Ltd. proposed to import into India a preparation of Betal Nuts known as ‘Boiled Supari’ packed in consumer packing and bulk packing.
The said appellant proposed that the aforementioned goods be classified as “Betel nut product known as ‘Supari’” under sub-heading 2106 90 30 in Chapter 21 of the First Schedule to the Customs Tariff Act
According to M/s Great Nuts Impex Pvt. Ltd., the said goods were not classifiable under Chapter 8 of the Customs Tariff as Areca nuts (heading 0802 80). The CAAR, inter alia, relied upon the decision of Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr.: 2007 (210) E.L.T. 171 to hold that the products in question, merit classification under Chapter 8 of the Customs Tariff.
Conclusion- Insofar as flavoured supari is concerned, the CAAR relied on the decision of the Supreme Court in Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr. and held that the same would continue to be classified under Chapter 8 of the Customs Tariff.
We find no infirmity with the aforesaid view. As noted above, the decision in the case of Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr. squarely covers the issue involved in the present cases.
Given the definition of the sub-heading “Betel nut product known as ‘Supari’”, read in the context of the main title of Chapter 21 and sub-heading 0802 read in the context with the title of Chapter 8 of the Customs Tariff (“Edible fruits and nuts; peel of citrus fruit or melons”); we are of the view that it would not be apposite to classify the products in question as those covered under Chapter 21 of the Customs Tariff.
FULL TEXT OF THE CESTAT DELHI ORDER
1. These appeals, filed under Section 28KA of the Customs Act, 1962 (hereafter ‘the Customs Act’), involve a common question regarding the classification of “Boiled Supari” under the Customs Tariff Act, 1975 (hereafter ‘the Customs Tariff Act’). The orders impugned in these appeals are also somewhat similarly worded. Thus, the present appeals were heard together and are being disposed of by this common order.
2. M/s Great Nuts Impex Pvt. Ltd. (Appellant in CUSAA 17/2022) had filed an application dated 23.09.2020 before the Customs Authority of Advanced Ruling (hereafter ‘CAAR’) seeking an advance ruling under Section 28H of the Customs Act regarding classification of the goods proposed to be imported. M/s Great Nuts Impex Pvt. Ltd. proposed to import into India a preparation of Betal Nuts known as ‘Boiled Supari’ packed in consumer packing and bulk packing. The proposed items included, (i) API Supari; (ii) Chikni Supari; (iii) Unflavoured Supari; (iv) Flavoured Supari; and (v) Boiled and Cut Supari. The said appellant proposed that the aforementioned goods be classified as “Betel nut product known as ‘Supari’” under sub-heading 2106 90 30 in Chapter 21 of the First Schedule to the Customs Tariff Act (the First Schedule to the Customs Tariff Act is hereafter referred to as ‘Customs Tariff’) and sought a ruling on the following question:
“Whether the goods sought to be imported is preparation of betel nut commonly known as Supari as described herein above, whether or not containing added ingredients such as food starch, spices, mulethi, menthol (flavors), perfume etc. Though not containing lime or katha (catechu) or tobacco and will the resultant product be classifiable under Chapter/ heading 2106 90 30 as Food Preparation.”
3. According to M/s Great Nuts Impex Pvt. Ltd., the said goods were not classifiable under Chapter 8 of the Customs Tariff as Areca nuts (heading 0802 80). M/s Great Nuts Impex Pvt. Ltd.’s contention was not accepted and by an order dated 20.05.2021 (Ruling No. CAAR/DEL/GREAT NUTS/05/2021), which is impugned in CUSAA 17/2022, the CAAR ruled to the contrary. The CAAR found that the goods in question were classifiable under heading 0802 and not under sub-heading 2106 90 30 as contended by M/s Great Nuts Impex Pvt. Ltd.
4. M/s The Nuts Co. (Appellant in CUSSA 18/2022) had also filed a similar application before the CAAR proposing to import goods similar to those as proposed to be imported by M/s Great Nuts Impex Pvt. Ltd. in its application. M/s The Nuts Co. also sought a ruling on the question, which was identically worded as the question framed by M/s Great Nuts Impex Pvt. Ltd. in its application. M/s Great Nuts Impex Pvt. Ltd. and M/s The Nuts Co. are hereafter, for the sake of brevity, collectively referred to as ‘the appellants’.
5. The said application filed by M/s The Nuts Co. also met the same fate as the application of M/s Great Nuts Impex Pvt. Ltd. and was disposed of by a ruling dated 04.06.2021 (Ruling No. CAAR/DEL/The Nut/10/2021), in similar terms as the ruling dated 20.05.2021. The CAAR, inter alia, relied upon the decision of Crane Betel Nut Powder Works v. Commissioner of Customs and Excise, Tirupathi & Anr.: 2007 (210) E.L.T. 171 to hold that the products in question, merit classification under Chapter 8 of the Customs Tariff.
6. The rulings dated 20.05.2021 and 04.06.2021 are hereafter referred to as ‘the impugned rulings’.
7. Before proceeding further, it would be relevant to refer to the goods as proposed to be imported by the appellants and the process of preparation. As noted above, both the appellants proposed to import “Boiled Supari packed in consumer packing and bulk packing”. They claimed that the process of preparation of the various types of import items is 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 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 in automatic garblers, polishing in polishing machine, sterilization to remove bacterial count, splitting (half) and/or 3 stage cutting, blowing of weightless particles in blowers; gravity separation by automatic gravity separation machine, roasting in fire gas rotary roaster, flavoring in large size automatic blenders with compound, metal detection by magnetic metal detectors, sterilization to kill bacteria count increased due to handling in processing and packaging.
(v) ‘Boiled Supari’: Following processes are conducted on raw green fresh betel nut: removing of large impurities by labourers, boiling in water for upto 4 hrs, removing the husk, boiling again for upto 2 hours, drying by hot air, sterilizing, shorting, polishing and packaging.”
8. It would be relevant to refer to the two competing entries. Chapter 8 of the Customs Tariff covers goods described as “Edible fruit and nuts; peel of citrus fruit or melons”. The relevant Tariff Item 0802 is set out below:
