Case Law Details
In re Perfect Trading Co. (CAAR Delhi)
The case of “In re Perfect Trading Co.” before the Customs Authority for Advance Rulings (CAAR), Delhi, has brought to light the complex issue of classifying Roasted Areca Nuts in various forms: whole, split, and cut. M/s. Perfect Trading Co., seeking to import these nuts from several countries into India, requested an advance ruling on their classification under the Customs Tariff Act, 1975.
The applicant argued that the roasted areca nuts are classifiable under chapter sub-heading 20081920, citing the lack of a definition for “roasting” in both the Customs Tariff and the Food Safety and Standards (FSS) explanatory notes. The process of roasting involves de-husking, drying, and subjecting the areca nuts to high temperatures, resulting in a product with a moisture content below 6 percent, aimed at improving quality rather than preservation. The applicant supported their classification with references to various case laws and the Harmonized System Nomenclature (HSN) Explanatory Notes, which explicitly include dry-roasted nuts under Chapter 2008.
The counter-argument from the concerned Commissionerate suggested that the roasted areca nuts fall under Chapter 080280, classifying them as merely dried nuts rather than a product that underwent a substantial transformation. They emphasized the standard procedures of drying and the regulations set by FSSAI, suggesting that the roasting process described by the applicant does not sufficiently alter the product to warrant a different classification.
After considering the submissions, the CAAR Delhi ruled in favor of the applicant, classifying the roasted areca nuts under sub-heading 20081920 as “Other roasted nuts and seeds.” This decision was supported by the specific mention of roasted nuts in the HSN Explanatory Notes and various judicial precedents that underscore the importance of these notes in tariff classification. The ruling acknowledges the distinct process and product outcome of roasting, differentiating it from mere drying or preserving methods. This decision not only clarifies the classification of roasted areca nuts for Perfect Trading Co. but also sets a precedent for similar cases in the customs and trade sector.
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