CAAR Classifies Cashew Splits Under Tariff Item 0801 32 90

In re Mystique Impex Private Limited (CAAR Mumbai)

The Customs Authority for Advance Rulings, Mumbai considered an application filed by M/s Mystique Impex Private Limited seeking classification of the proposed import of raw, shelled cashew kernels split into two pieces lengthwise, commercially known as “cashew splits” or “split kernels”, and determination of the applicability of DGFT Notification No. 59/2015-2020 dated 21.02.2023 prescribing Minimum Import Price (MIP) for specified cashew kernel categories. The applicant proposed to import the goods for wholesale trading and submitted that the kernels separate along their natural longitudinal seam into two substantially symmetrical halves, retaining the recognizable form and characteristics of the original kernel. The principal dispute concerned Tariff Items 0801 32 10, covering “cashew kernel, broken”, 0801 32 20, covering “cashew kernel, whole”, and 0801 32 90, covering “Other”. The applicant contended that split kernels are commercially and physically distinct from broken kernels, which generally comprise irregular fragments, and therefore fall under the residual entry 0801 32 90. It also submitted that the MIP notification, which specifies “cashew kernel, broken” and “cashew kernel, whole”, could not be extended to goods classified under the residual tariff item.

The Authority examined the Customs Tariff structure, General Rules for Interpretation, HSN Explanatory Notes, dictionary meanings, trade understanding and BIS Standard IS: 7750:2013. It noted that “split” ordinarily denotes a clean division along a natural line of cleavage, whereas “broken” generally connotes rupture, damage or irregular fragmentation. The Authority also considered that the Customs Tariff itself contains separate references to “split” and “broken” in other contexts, including split areca nuts under 0802 80 20 and split pigeon peas under 0713 90 10. The BIS standard was noted to recognise whole, butts, splits and broken pieces as distinct cashew kernel categories, with splits identified as kernels split naturally lengthwise.

The Authority further considered the common-parlance principle relied upon in the judicial precedents cited in the material. It referred to the Supreme Court’s observations concerning the use of ordinary and commercial meaning where tariff expressions are not statutorily defined. The Authority found that the commercial and physical characteristics of split kernels distinguish them from broken kernels. It therefore held that the absence of a specific tariff entry for split kernels meant that they were appropriately covered by the residual entry 0801 32 90 rather than the specific entry for broken kernels.

On the MIP issue, the Authority recorded that DGFT Notification No. 59/2015-2020 dated 21.02.2023 prescribed MIP of Rs. 680 per kg for “cashew kernel, broken” and Rs. 720 per kg for “cashew kernel, whole”, subject to the notification’s conditions. Since the subject goods were classified under 0801 32 90 and were not classifiable as either whole or broken kernels, the Authority held that the MIP conditions prescribed by the notification were not applicable to the proposed imports.

Accordingly, the Authority ruled that “cashew kernel split into two lengthwise (cashew kernel two-piece split)” is correctly classifiable under Customs Tariff Item 0801 32 90; that such cashew splits are excluded from classification under 0801 32 10 covering “cashew kernel, broken”; and that DGFT Notification No. 59/2015-2020 dated 21.02.2023 prescribing MIP is not applicable to the subject goods. The applicant had also sought confidentiality for commercially sensitive material. The Authority approved the request and directed that the ruling be kept confidential under Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021, as amended.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s Mystique Impex Pvt. Ltd. (hereinafter referred to as “the applicant”) has filed an application in Form CAAR-1 before the Customs Authority for Advance Rulings, Mumbai (hereinafter referred to as “CAAR” or “the Authority”). The application, along with the prescribed fee and supporting documents, was received in the Secretariat of CAAR, Mumbai on 12.06.2026 in terms of Section 2811(1) of the Customs Act, 1962. The applicant namely, M/s Mystique Impex Private Limited is a company engaged, inter alia, in the wholesale trading and distribution of edible nuts, dry fruits and agricultural commodities, including cashew kernels. The Applicant proposes to undertake the import of cashew kernels from overseas suppliers for wholesale trading in India, including cashew kernels split into two pieces lengthwise, commonly known in trade as “cashew splits”. The proposed imports may be undertaken in bulk commercial consignments and packs of varying sizes from countries including Vietnam, vori Coast, Ghana, Indonesia and the United Arab Emirates, as well as such other countries as may be commercially feasible. The goods may be imported through one or more ports or Inland Container Depots in India, mainly Kandla including ICI) Morbi and ICD Varnama, depending upon the Applicant’s commercial requirements, availability of the goods and logistical considerations. The Applicant holds a valid Importer Exporter Code (IEC) bearing No. AAQCM8526J and is eligible to undertake import transactions in accordance with the applicable customs and foreign trade laws and regulations and has sought an advance ruling under Section 281-1 of the Customs Act, 1962 on questions relating to the classification of the product described as “Cashew Kernel — split into two lengthwise”. The applicant has also sought a ruling on the applicability of DGFT Notification No.59/2015-2020 dated 21.02.2023, issued under the Foreign Trade Policy, which prescribes a Minimum Import Price (MIP) for the import of “Cashew kernel, broken” and “Cashew kernel, whole”. The applicant seeks clarity as to whether the subject goods are to be treated as “cashew kernel, whole” or “cashew kernel, broken” for the purposes of the said notification and the consequent applicability of the prescribed MIP conditions.

2. Submission by Applicant–

2.1 The present application concerns the proposed import of cashew kernels split into two pieces lengthwise, commonly known in trade and commerce as “cashew splits” or “split kernels.”

2.2 Cashew kernels are the edible seeds of the cashew tree (Anticardium occidental). The kernel comprises two cotyledons naturally joined along a longitudinal scam. Owing to this natural structure, the kernel may separate along the said scam into two substantially symmetrical halves, which arc commercially recognized as split kernels or cashew splits.

2.3 The goods proposed to be imported are raw and shelled cashew kernels separated into two pieces lengthwise. The goods retain the essential characteristics, natural shape and identity of edible cashew kernels and arc not converted into any different commodity by reason of such separation.

2.4 The subject goods are not roasted, salted, flavoured, fried, coated, sweetened, ground or otherwise processed. They remain in their raw, shelled form and are suitable for human consumption in the same manner as other edible cashew kernels.

2.5 In the cashew trade, kernels arc commercially recognized and traded in different forms and grades, including whole kernels, splits, butts and broken pieces. Among these, split kernels are understood in commercial practice as kernels separated into two substantially intact halves along the natural longitudinal scam, whereas broken kernels generally comprise irregular or fragmented pieces. Accordingly, cashew splits possess a distinct commercial identity and arc separately described, graded and traded in the market.

2.6 The principal physical and commercial characteristics distinguishing whole kernels, split kernels and broken kernels are summarized below:

Particulars	Whole Kernels	Split Kernels	Broken Kernels
General Form	Entire kernel intact	Kernel divided into two lengthwise halves	Irregular fragments/pieces
Shape	Complete natural kernel shape	Two substantially symmetrical portions	Uneven/chipped/random pieces
Manner of Formation	Intact after shelling	Separation along natural seam	Fracture during handling/processing
Commercial Identity	Sold as whole grade	Sold as split grade	Sold as broken grade
Typical Pricing	Premium	Mid-range	Lower
Typical Use	Premium retail packs, gifting, direct consumption, decorative use in sweets	Cooking, bakery, confectionery, retail packs, direct consumption	Powdering, paste, confectionery mix, industrial food processing
Trade Description	Whole	Splits	Broken

2.7 By way of illustration, photographs of the above goods are as follows:

in view of the above products, under the First Schedule to the Customs Tariff Act. 1975, shelled cashew nuts are covered under Tariff Item 0801 32, which is further sub-divided into the following tariff items:

S. No.	Code	Description
i.	0801 32 10	Cashew kernel, broken
ii.	0801 32 20	Cashew kernel, whole
iii.	0801 32 90	Other

The tariff structure thus expressly provides specific entries for “cashew kernel, broken” and “cashew kernel, whole”, while also providing a residual entry, namely Tariff Item 0801 32 90 •— “Other”. However, the tariff does not expressly provide a separate tariff item for cashew kernels which are split into two substantially intact pieces lengthwise along the natural longitudinal seam, commonly known in trade and commerce as “cashew splits” or “split kernels.”

The subject goods therefore give rise to a classification issue as to whether cashew kernels split lengthwise into two substantially symmetrical halves are covered by the specific entry 0801 32 10 — “Cashew kernel, broken”, or whether, being neither “whole” nor “broken” in the relevant commercial and physical sense, they fall under the residual entry 0801 32 90 “Other”.

The issue assumes significance because “split” and “broken” are commercially understood as distinct forms of cashew kernels. While a split kernel results from separation along the natural longitudinal seam and retains the recognizable form of the original kernel, a broken kernel generally refers to an irregular piece or fragment resulting from breakage, fracture or damage.

Accordingly, the Applicant seeks an advance ruling on the appropriate classification of the subject goods, particularly whether cashew splits are classifiable under Tariff Item 0801 32 90 —”Other”, rather than under Tariff Item 0801 32 10 —”Cashew kernel, broken.”

3. The issues that arise for determination in the present application is as under:

(i) Whether the goods proposed to be imported, namely, “Cashew Kernel – split into two lengthwise commonly known in trade as cashew splits, are classifiable under Customs Tariff Item (CTI) 0801 32 90 of the First Schedule to the Customs Tari If Act, 1975?

(ii) Whether the said goods are excluded from classification under Tariff Item (CTH) 0801 32 10 of the First Schedule to the Customs Tariff Act, covering “Cashew Kernels, Broken”?

(iii) Whether the provisions of DGFT Notification No. 59/2015-2020dated 21.02.2023, which prescribes a Minimum Import Price (MIP) fbr ‘cashew kernel-broken’ and “cashew kernel-whole”, are applicable to the import of “Cashew Kernel – split into two lengthwise if classified under CTH 0801 32 90?

4. STATEMENT CONTAINING THE APPLICANT’S INTERPRETATION 0 LAW AND/OR FACTS

4.1 The present application concerns the classification under the First Schedule to the Customs Tariff Act, 1975 (“Customs Tariff Act”) of cashew kernels split into two pieces lengthwise, commonly known in trade and commerce as “cashew splits” or “split kernels.”

4.2 The Applicant respectfully submits that the subject goods are appropriately classifiable under Tariff Item 0801 32 90 —”Other”, and not under Tariff Item 0801 32 10 “Cashew kernel, broken”, as the subject goods are neither whole kernels nor broken kernels, but cashew kernels cleanly separated into two substantially intact halves along their natural longitudinal seam.

4.3 The Applicant further submits that, if the subject goods are classified under Customs Tariff Item 0801 32 90, a DGFT Minimum Import Price (MIP) notification specifically prescribing MIP with reference to other tariff items cannot be extended to the subject goods unless its express terms cover the said tariff item.

4.4 The Applicant’s submissions on the questions raised in the present application are set out hereinbelow.

Whether cashew kernels split into two pieces lengthwise arc classifiable under Tariff Item 0801 32 90 as “Other”

A. Tariff Structure and Scope of the Residual Entry

1. Classification of imported goods is required to be determined in accordance with the terms of the relevant tariff heading and sub-heading, read with the applicable Section Notes, Chapter Notes and the General Rules for the Interpretation of the Import Tariff (GRI).

2. Rule 1 of the GRI provides that classification is to be determined according to the terms of the headings and the relevant Section or Chapter Notes. Accordingly, the language of the tariff entry is the starting point for determining the classification of the subject goods.

3. Chapter heading 0801 covers coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled. Insofar as cashew nuts arc concerned, the relevant tariff structure is:

• • • 0801 31 00 — In shell; and
    • 0801 32 — Shelled.

The tariff further classifies shelled cashew nuts under the following tariff items:

• • • 0801 32 10 – Cashew kernel, broken;
    • 0801 32 20 – Cashew kernel, whole; and
    • 0801 32 90 – Other

Thus, the tariff specifically identifies “cashew kernel, broken” and “cashew kernel, whole”, followed by the residual entry “Other.” The three entries must be construed so as to give effect to each of them.

Accordingly, shelled cashew kernels answering the description “whole” are covered by Tariff Item 0801 32 20, while those answering the description “broken” are covered by Tariff Item 0801 32 10. Shelled cashew kernels which do not answer either specific description fall for consideration under Customs Tariff Item 0801 32 90 “Other.”

4. The subject goods are cashew kernels separated into two substantially intact pieces lengthwise along the natural longitudinal seam. They do not answer the description “whole” and for the reasons set out below, do not answer the description “broken.” The Applicant therefore submits that they fall under Tariff Item 0801 32 90 — “Other.”

5. This interpretation is also consistent with the structure of the tariff. The residua( entry “Other’ would have no meaningful scope if every shelled cashew kernel other than an intact whole kernel were automatically treated as “broken.” The existence of a separate residual entry indicates that forms of shelled cashew kernels not specifically covered by the preceding entries arc intended to fall within its scope.

B. Physical Characteristics of Cashew Splits

1. The subject goods have the following relevant characteristics:

(a) they arc raw and shelled cashew kernels;

(b) each kernel is separated into two pieces lengthwise;

(c) the separation occurs along the natural longitudinal scam of the kernel;

(d) the resulting pieces retain the recognizable form and characteristics of the respective halves of the original kernel; and

(e) the goods are not roasted, salted, flavoured, fried, coated, sweetened, ground or otherwise processed.

The subject goods therefore remain edible cashew kernels in raw, shelled form. The mere separation of a kernel along its natural seam does not transform the goods into a different commodity.

2. A whole kernel is an intact kernel. Since the subject goods consist of two separate lengthwise portions, they do not fall within Tariff Item 0801 32 20 covering “Cashew kernel, whole.”

3. The relevant question is consequently whether the subject goods fall within the expression “Cashew kernel, broken” under Tariff Item 0801 3210.

4. The Applicant respectfully submits that a cashew split is materially different from a broken kernel. A split is formed by separation along the natural longitudinal seam, resulting in two substantially intact and recognizable halves. A broken kernel, in contrast, ordinarily denotes a. piece or fragment resulting from fracture, breakage, chipping or crushing and may assume an irregular shape.

5. The distinction is therefore based not merely on nomenclature but on the physical form and manner of separation. A split retains the recognizable half-kernel structure, whereas a broken piece results from breakage of the kernel and does not necessarily retain such structure.

6. Accordingly, the expressions “split” and “broken” cannot be treated as synonymous merely because both involve separation o f a kernel into pieces. The subject goods are specifically identifiable as split kernels and are physically distinguishable from broken or fragmented kernels.

C. Distinction Between “Split” and “Broken” in the Tariff Scheme

1. The Applicant further submits that the Customs Tariff Act demonstrates, in several contexts, that the expressions “split” and “broken” are capable of denoting different physical or commercial forms of agricultural commodities. Where the legislature intends to cover goods in split form, it has used the expression “split” expressly, while the expression “broken” is used in other tariff contexts to describe goods in broken or fragmented form.

2. By way of illustration, the Customs Tari ff contains separate references to goods described as “Split” and goods described as “Broken”, including entries relating to agricultural commodities such as pulses, areca nuts and rice. The relevant tariff extracts are set out below to demonstrate that the two expressions are not invariably interchangeable in tariff nomenclature.

a) TERM “SPLIT”

Tariff Item	Description	Unit	Rate of Duty	Preferential Area Rate
0713 60 00	Pigeon peas (Cajanus cajan)	Kg	30%	20%
0713 90	Other:
0713 90 10	Split	kg.	30%	20%
0713 90 90	Other	kg.	30%	20%
0802 80	Areca nuts:
0802 80 10	Whole	Kg.	100%	90%
0802 80 20	Split	Kg.	100%	90%
0802 80 30	Ground	Kg.	100%	90%
0802 80 90	Other	Kg.	100%	90%

b) TERM “BROKEN”

Tariff Item	Description	Unit	Rate of Duty	Preferential Area Rate
0801 31 00	Cashew nuts – In shell	kg.	2.5%	Free
0801 32	Cashew nuts – Shelled	—	—	—
0801 32 10	Cashew kernel, broken	kg.	30%	20%
0801 32 20	Cashew kernel, whole	kg.	30%	20%
0801 32 90	Other	kg.	30%	20%
—	Other	—	—	—
1006 30 91	Rice, GI recognised	Kg.	70%	—
1006 30 92	Basmati rice	Kg.	70%	—
1006 30 99	Other	Kg.	70%	—
1006 30 92	Basmati rice	Kg.	70%
1006 30 99	Other	Kg.	70%
1006 40 00	Broken rice	kg.	80%
1202	GROUND-NUTS, NOT ROASTED OR IERWISE COOKED, WHETHER OR NOT SHELLED OR BROKEN
1202 30	Seed:
1.202 30 10	II.P.S :	Kg	30%	20%
1202 30 90	Other	kg.	30%	20%
	Other:
1202 41	In shell:
1202 41 10	H.P.S.	kg.	30%	20%
1202 41 90	Other	Kg	30%	20%
1202 42	Shelled, whether or not broken:
1202 42 10	Kernels, 11.13.S.	kg.	30%	20%
1202 42 20	Kernels, other	kg.	30%	20%
1202 42 90	Other	Kg	30%	20%

3. The use of the terms “split” and “broken” in the aforesaid tariff entries demonstrates that the two expressions are not interchangeable and carry distinct meanings in the context of tariff classification.

4. Further, the I1SN Explanatory Notes, while explaining the expression “broken rice”, state as follows:

“Broken rice, i.e. rice broken during processing.”

This indicates that the expression “broken” denotes fragmentation or breakage occurring during processing, rather than a deliberate or natural separation of the product into identifiable portions.

5. Accordingly, where Customs Tariff Item 0801 32 10 specifically covers “cashew kernel, broken”, the expression cannot be extended to include cashew kernels which have separated into two substantially symmetrical halves along their natural longitudinal seam. The subject cashew splits, being commercially and physically distinct from broken kernels, are therefore appropriately classifiable under the residual Tariff Item 0801 32 90 — Other.

D. Common Parlance Test Supports Distinction Between Splits and Broken Kernels

1. The Applicant submits that, where the tariff does not define a term, the classification of goods is to be determined, inter alia, by their ordinary, popular and commercial meaning, particularly where a dispute arises between competing tariff entries.

2. The Hon’ble Supreme Court has consistently held that words used in taxing statutes should, in the absence of a statutory or technical definition, be understood in the sense in which they are ordinarily understood in trade and commerce. This principle has been reiterated in CCE v. Connaught Plaza Restaurant (P) Ltd. 12012 (286) E.L.T. 321 (S.C.)J, with reference to, inter alia, Rarnavatar Budhaiprasad v. Assistant Sales Tax Officer and Dunlop India Ltd. v. Union of India.

In the present case, cashew kernels are commercially recognized and traded in distinct forms, including whole, butts, splits and broken kernels. A “cashew split” denotes a kernel separated lengthwise along its natural seam into two substantially symmetrical halves, whereas “broken” kernels generally denote irregular pieces resulting from breakage or fragmentation.

3. Thus, in commercial parlance. “split” and “broken” arc distinct descriptions and arc not used interchangeably. The expression “cashew kernel, broken” in Tariff item 0801 32 10 should therefore be understood in its ordinary commercial sense and should not be expanded to cover cashew splits.

4. The subject goods, being commercially recognized as cashew splits and physically distinct from broken kernels, do not answer the specific description under Tariff Item 0801 32 10. They consequently fall within the residual category “Other” under Tariff Item 0801 32 90.

5. Accordingly, the common parlance test also supports classification of the subject cashew splits under CTH 0801 32 90, and not under CTI 0801 32 10.

E. Applicability of the Residual Entry to Cashew Splits

1. In view of the foregoing, the Applicant submits that the tariff specifically covers whole and broken cashew kernels, but contains no specific entry for cashew kernels split into two pieces lengthwise, i.e., cashew splits.

2. The subject goods arc admittedly not whole kernels, as they consist of two separate portions. Equally, for the reasons set out hereinabove and under Question No. 2, they do not answer the description of “cashew kernel, broken” under C’l’H 0801 32 10.

Accordingly, being shelled cashew kernels which are neither whole nor broken within the meaning of the specific tariff entries, the subject goods appropriately fall under CTH 0801 32 90 — “Other”.

3. This conclusion is supported by the structure of the tariff, under which the residual entry covers forms of shelled cashew kernels not specifically enumerated under the preceding entries. every cashew kernel other than an intact whole kernel were treated as “broken”, the residual entry 0801 32 90 — Other would be deprived of meaningful scope. Such an interpretation would render the residual entry largely redundant and would be contrary to the settled principle that each tariff entry must be given its intended meaning and effect.

F. Trade Understanding and BIS Standards Support Distinct Classification

1. The Applicant submits that, in commercial practice, cashew kernels are traded in distinct categories, including whole kernels, butts, splits and broken pieces, each having a separate commercial identity.

2. The Bureau of Indian Standards (BIS), under IS 7750:2013, also recognizes distinct forms and grades of cashew kernels, including splits and broken forms. The standard is relevant in determining the manner in which cashew kernels are ordinarily identified, graded and described in trade. The separate recognition of splits and broken kernels in the 13IS standard supports the Applicant’s submission that the two are not interchangeable descriptions. In commercial practice, they are capable of being separately identified, graded, packed, priced and traded.

3. The same commercial distinction is reflected in the materials published by the Cashew Export Promotion Council of India (CEPCI), which recognizes different commercial categories of cashew kernels, including wholes, pieces, splits and butts, based on their physical characteristics.

Such recognition by the relevant standards and industry body is significant as it evidences the ordinary commercial understanding of the terms used in the cashew trade. It demonstrates that “splits” constitute an identifiable commercial category distinct from “broken” kernels or irregular fragments.

4. Accordingly, the trade and industry understanding, read with the 13IS standard, supports the conclusion that cashew kernels split lengthwise along the natural seam cannot be equated with “cashew kernel, broken” under CTI 0801 32 10. The subject goods therefore appropriately fall under CTI 0801 32 90 — “Other.”

5. Additionally, the Applicant craves leave to rely upon and produce, inter alia, the following material in support of the above submissions:

a) Sample supplier documents: Proforma invoice and commercial quotation bearing Quotation Ref. QTN-2026-0430-B, wherein the subject goods are specifically described as “splits”:

b) Photographs of the relevant products:

d) Comparative Pricing Analysis of Cashew Kernel Grades:

The Applicant has set out below a comparative analysis of the prevailing international prices of different grades of raw cashew kernels, based on the proforma invoice and commercial quotation bearing Quotation Ref. QTN-2026-0430-I3, obtained in the ordinary course of business. The pricing differences further demonstrate the distinct commercial identity and market recognition of the respective cashew kernel grades.

e) Consolidated Global Market Pricing (USD per Metric Ton):

Category	Trade Grade	Description	Price (USD / MT)	Price Variance vs. “Broken” Base (LP)
Premium Whole	WW2z10	Intact Whole Kernels (Premium Size)	$7,600.00	-i- $1,800.00
Standard Whole	WW320	Intact Whole Kernels (Standard Size)	$7,100.00	I- $1,300.00
Splits	WS	Naturally Halved Kernels (Intact Lengthwise)	$3,100.00	-i- $600.00
Broken	LP	Large Broken Pieces (Random Fragments)	$2,500.00	Baseline
Broken	SP	Small 13roken Pieces (Shattered Fragments)	$2,100.00	– $4,00.00
Broken	1313	Raw Cashew Nut Kernels — Broken (Baby Bits)	$1700.00	– $8,00.00

The above trade classification and grading framework further demonstrates that “cashew splits” constitute a distinct and commercially recognized category of cashew kernels, separate from “broken” kernels. The distinction is based on the physical form and manner of separation of the kernel and is reflected in established international trade practices and grading standards. Accordingly, the expression “cashew kernel, broken” under CTI 0801 32 10 ought not to be construed so broadly as to include cashew kernels which are deliberately or naturally separated into two substantially symmetrical halves along the longitudinal seam. The Applicant has summarized below the details such as trade name, description, etc., based on International Al?! Specifications & Commercial Trade Practices:

Primary Category	Commercial Trade Name	Trade Grade Code	Official Structural Description & Physical Characteristics	Commercial Tolerance (Broken/Defects)
I. WHOLE KERNELS	Premium White Whole	WW240	Cashew kernels that have their natural shape completely intact. White, pale ivory, or light ash in color. Count: 220–240 kernels per pound.	Max 5% broken
I. WHOLE KERNELS	Standard White Whole	WW320	Cashew kernels that have their natural shape completely intact. White, pale ivory, or light ash in color. Count: 300–320 kernels per pound.	Max 5% broken
II. SPLIT KERNELS	White Splits	WS	Kernels split naturally and cleanly in half lengthwise (along the longitudinal axis). The cotyledons are separated but retain the distinct, recognizable half-shape of a whole cashew.	Max 5% broken pieces
III. BROKEN KERNELS	Large White Pieces	LWP	Randomly broken cashew kernels that no longer retain the structural shape of a whole or split cashew. Pieces pass through a 4.75 mm sieve.	N/A (Categorized as Broken)
III. BROKEN KERNELS	Small White Pieces	SWP	Severely shattered/broken fragments of cashew kernels. Pieces pass through a 2.80 mm sieve. Commercially utilized as baking ingredients.	N/A (Categorized as Broken)
III. BROKEN KERNELS	Baby Bits	BB	Minute, highly shattered granular fragments of cashew kernels. Pieces pass through a 1.70 mm sieve. Commercially utilized as baking ingredients.	N/A (Categorized as Broken)

The above materials demonstrate that cashew splits are commercially recognized as a distinct category and are not treated as synonymous with broken kernels.

Accordingly, in the absence of any specific statutory definition of the expression “cashew kernel, broken”, the established trade and commercial understanding assumes significance and supports the classification of cashew splits under Tariff Item 0801 32 90 — Other, rather than under Tariff Item 0801 32 10.

Submissions on Question 2 – Whether the said goods arc excluded from classification under Tari ff Item 0801 32 10 of the First Schedule to the Customs Tariff Act, covering “cashew kernels, broken”

G. Ordinary Meaning of the Terms “Split” and “Broken”

1. The Applicant submits that Tariff Item 0801 32 10 specifically covers “cashew kernel, broken”. Since the expressions “split” and “broken” are not defined under the Customs Tariff Act, they should be understood in their ordinary and commercial sense. The relevant dictionary meanings are set out below:

“Split”

• • Merriam-Webster: “to divide length vise usually along a grain or scam”.
  • Cambridge Dictionary: “to (cause to) divide into two or more parts, especially along a particular line”.

“Broken”

• • Merriam-Webster: “violently separated into parts” or “damaged or altered by … breaking”
  • Cambridge Dictionary: “damaged”.

2. The above definitions indicate that “split” connotes a division along a line, seam or natural direction, whereas “broken” connotes fracture, damage or separation resulting from breakage. The distinction is particularly relevant to the subject goods. A cashew split results from the kernel separating longitudinally along its natural seam into two substantially symmetrical halves. It is therefore a controlled and identifiable form of separation, rather than an irregular fracture or fragmentation.

3. Accordingly, the terms “split” and “broken” cannot be treated as synonymous merely because both involve separation of the kernel. In the ordinary and commercial sense, cashew splits constitute a distinct form of kernel and arc not “broken” kernels for the purposes of Tariff Item 0801 32 10.

H. Physical Characteristics Distinguish Cashew Splits from Broken Kernels

The subject goods have distinct physical characteristics. Cashew splits retain the identifiable shape ofthe original kernel and consist oftwo matching or substantially symmetrical halves obtained by separation along the natural longitudinal seam. In contrast, broken kernels generally comprise irregularly shaped and unevenly sized pieces resulting from fracture or breakage during processing, handling or transportation.

Thus, the manner of separation, shape, size and visual appearance of cashew splits arc materially different from those of broken kernels. The comparative photographs and charts have already been illustrated this distinction and support the Applicant’s position that cashew splits constitute a distinct commercial form and cannot be equated with “cashew kernel, broken” under Tariff Item 0801 32 10.

I. Trade Practice Treats Splits and Broken Kernels as Distinct Categories

1. The distinction between cashew splits and broken kernels is not merely theoretical but is reflected in established trade practice. In commercial transactions, cashew kernels are separately described and traded as whole, splits, butts and broken. Suppliers and traders identify goods as “splits” in quotations, invoices, product catalogues and packing documents, evidencing their distinct commercial identity.

2. The distinction is further reflected in market pricing. Whole kernels, splits and broken kernels generally command different prices, with splits typically positioned below whole kernels but above broken kernels, having regard to their respective physical characteristics and commercial utility. Such separate description and price differentiation indicate that splits arc not commercially regarded as broken kernels. I lad the two categories been treated as identical, there would be little commercial basis for their separate identification, grading and valuation.

Accordingly, the Applicant submits that the established trade practice, separate commercial description and price differentiation provide relevantevidencc that cashew. Splits constitute a distinct category from broken kernels and, therefore, do not fall within Tariff Item 0801 32 10.

J. BIS Standards Reinforce the Distinction

1. The BIS specifications applicable to cashew kernels recognize distinct commercial forms and grades of kernels, including split and broken forms.

2. Such standards are relevant in determining the commercial identity of the goods; as they reflect established industry practices relating to the description, grading and classification of cashew kernels. In the absence of a_; specific statutory definition, this provides persuasive evidence of the distinction between the two, Rms.

Accordingly, the separate recognition of split and broken kernels in BI5 specifications, read with established trade practice, supports the Applicant’s submission that the two expressions are not interchangeable. Treating cashew splits as “broken” kernels would disregard their distinct physical characteristics and established commercial identity.

K. Specific Entry Cannot Bc Artificially Enlarged

1. It is a settled principle of tariff classification that a specific tariff entry must be construed in accordance with its plain and precise language and cannot be extended by implication to goods which do not answer the description contained therein. Tariff Item 0801 32 10 specifically employs the expression “cashew kernel, broken”. The legislature has not used broader expressions such as “cashew kernels other than whole” or “cashew kernels in pieces”.

2. The choice of the specific expression “broken” is significant. It cannot be expanded to cover cashew kernels which are deliberately or naturally separated along their longitudinal scam into two substantially symmetrical halves and are commercially identified as “splits.^– Any such interpretation would effectively enlarge or rewrite the, tariff entry beyond its express language and would disregard the distinct physical and commercial identity of cashew splits.

Accordingly, the Applicant submits that the subject goods, being cashew kernels split lengthwise into two pieces, do, not answer the description “cashew kernel, broken” and arc therefore excluded from classification under Tariff Item 080132 10.

L. Residual Entry 0801 32 90 Applies to Cashew Splits

1. In summary, Tariff Item 0801 32 10 specifically covers “cashew kernel, broken”, while Tariff Item 0801 32 20 covers “cashew kernel, whole.'” The subject goods, being cashew kernels split lengthwise into two substantially symmetrical halves, fall within neither description.

2. The subject goods are therefore not covered by either of the specific tariff entries. As shelled cashew kernels not otherwise specifically enumerated, they appropriately fall under the residual entry Tariff’ Item 0801 32 90 ^–Other.”

Accordingly, on a plain and harmonious reading of the tariff structure, the subject cashew splits arc appropriately classifiable under Tariff Item 0801 32 90 and arc excluded from Tariff Item 0801 32 10.

Submissions on Question 3 – Whether Mail’ MIP Notification, prescribing MIP for specified categories of cashew kernels, is inapplicable to the said goods if classified under Tariff Item 0801 32 90

M. GFT Notification Must Follow the Correct Tariff Classification

1. The applicability of the DGFT Minimum Import Price (“MIP”) Notification must be determined with reference to the correct tariff classification of the imported goods and cannot be considered independently of such classification.

2. Accordingly, where the subject goods are correctly classifiable under Tariff Item 0801 32 90, they cannot, merely for the purpose of applying the MIP requirement, be treated as goods falling under Tariff Item 0801 32 10 or any other tariff item.

3. The Applicant therefore submits that the MIP Notification must be applied in accordance with the tariff entry actually applicable to the subject goods. If the Notification prescribes MIP only for specified tariff’ items/categories and does not cover Tariff Item 0801 32 90, .the prescribed MIP cannot be extended to the subject goods by implication.

N. DGFT MIP Notification is Not Applicable to the Subject Goods

The DGFT MIP Notification prescribes Minimum Import Price (“MIP”) with reference to specified tariff items, including:

(a) Cashew kernel, broken – Tariff Item 0801 32 10

(b) Cashew kernel, whole — Tariff Item 0801 32 20

As submitted above, the subject goods -cashew kernels split lengthwise into two substantially symmetrical halves (“cashew splits”)—are appropriately classifiable under Tariff Item 0801 32 90 — “Other”, being distinct from both whole and broken kernels.

Accordingly, where the subject goods fall under Tariff Item 0801 32 90 and the MIP Notification specifically covers only the identified tariff items/categories, its provisions cannot be extended to the subject goods by implication. In the absence of an express provision covering Tariff Item 0801 32 90 or cashew splits, the prescribed MIP would not be applicable to the subject imports.

O. Import Restrictions Should Be Construed Strictly

It is a settled principle that import restrictions, Conditions and regulatory burdens must be construed strictly in accordance with the language of the relevant notification and cannot be extended by implication. Accordingly, where a notification prescribes conditions for specifically identified goods or tariff items, such conditions cannot be applied to goods falling under a different tariff item unless the notification expressly or by necessary implication so provides.

In the present case, once the subject goods are correctly classified under Tariff Item 0801 32 90, they cannot be subjected to the MIP or other conditions prescribed specifically for Tariff Items 0801 32 10 or 0801 32 20, merely by treating cashew splits as broken or whole kernels. Any such extension would amount to enlarging the scope of the notification beyond its express terms.

P. Import Restrictions Should Be Construed Strictly

It is a settled principle that restrictions, conditions, and other burdens imposed on import trade must be construed strictly. The scope of such restrictions cannot be enlarged by implication or by adopting an artificially expansive interpretation of the description of the goods to which they apply.

Accordingly, where a notification prescribes specific conditions in respect of an identified category of goods, those conditions cannot be extended to goods falling under a different tariff classification unless the language of the notification expressly or necessarily so provides.

In the present case, if the goods are correctly classifiable under Tariff Item 0801 32 90, they cannot, in the absence of clear and express language to the contrary, be subjected to conditions prescribed for a distinct and specifically identified category of goods.

Q. No Automatic Extension to Residual Category

The mere fact that the subject goods are shelled cashew kernels cannot, by itself, justify extending the MIP condition to them where the applicable tariff entry and the notification do not expressly cover such goods.

Once it is accepted that cashew splits constitute a commercially distinct form of the goods and arc classifiable under the residual tariff entry, the conditions prescribed by the notification for another specifically identified category cannot be extended to the subject goods merely on the basis of perceived similarity between the two categories.

Such an extension would impermissibly render the tariff distinction nugatory and, in substance, amount to rewriting both the relevant tariff entry and the notification to bring within their scope goods that have not been expressly covered.

Accordingly, the Applicant respectfully submits that the DGF’T MIP Notification is inapplicable to the subject goods insofar as they are correctly classifiable under Tariff Item 0801 32 90.

R. Additional Evidentiary Factors Supporting the Applicant’s Case

Without repeating the detailed submissions made hereinabove, the Applicant respectfully submits that the following evidentiary and commercial factors further support the classification claimed in the present application:

(i) Product morphology: Cashew split kernels retain the characteristic bilateral symmetry and identifiable kernel profile of a kernel divided lengthwise into two substantially corresponding halves. They are therefore distinguishable, by their physical form, from irregular fragments ordinarily understood as broken kernels.

(ii) BIS and industry recognition: The applicable I3lS standards and CEPCI trade-grading practices recognize distinct commercial categories and/or grades for split and broken kernels. Such recognition supports the existence of a commercially meaningful distinction between the two forms.

(iii) Supplier and trade descriptions: Product catalogues, quotations, invoices, packing lists, and packaging descriptions identify the subject goods as “splits” or “split kernels”, rather than as “broken” kernels. These contemporaneous commercial descriptions provide further evidence of the identity and nature of the goods as traded.

(iv) Price differentiation: The distinct pricing of whole, split, and broken kernels reflects their separate market identities, commercial characteristics, and degrees of interchangeability. The existence of differentiated market pricing is further indicative that split kernels constitute a commercially distinct category rather than merely a form of broken kernels.

(v) Residual-entry logic: If every kernel that is not whole were to be treated as a “broken” kernel, the residual entry under Tariff Item 0801 32 90 would be substantially deprived of independent operation. Such an interpretation would fail to give meaningful effect to the tariff structure and the distinction between the specific and residual entries.

In view of the foregoing, the Applicant respectably submits that goods properly classifiable under Tariff Item 0801 32 90 ought not to be subjected to conditions prescribed specifically for whole kernels or broken kernels, particularly where the relevant notification does not expressly extend such conditions to the residual category.

Without prejudice to the foregoing submissions, and in order to obtain authoritative clarity on the issue, the Applicant respectfully requests this Hon’ble Customs Authority for Advance Rulings (“CAAR”) to pronounce a ruling on the applicability of the relevant DGFT MW Notification to the subject goods and, in particular, on the questions and concerns arising in the present advance ruling application.

In light of the facts, evidence, and submissions set out hereinabove, the Applicant respectfully prays that this Hon’ble Authority may be pleased to rule that:

(a) Cashew kernels split into two pieces lengthwise (cashew splits) are classifiable under Tariff Item 0801 32 90;

(b) the said goods are excluded from classification under Tariff Item 0801 32 10, covering “cashew kernel, broken”; and

(c) the DGFT MEP Notification prescribing minimum import prices for specified categories of cashew kernels is not applicable to the said goods when they arc correctly classified under Tariff Item 0801 32 90.

S. Request for Protection of Confidential Information

The Applicant respectfully submits that certain documents and materials relied upon, or proposed to be relied upon, in support of the present application–including supplier invoices, pricing data, product catalogues, commercial agreements, and other trade-related documents-­contain confidential and commercially sensitive information. Disclosure of such information to third parties may adversely affect the Applicant’s competitive position and may result in prejudice to its legitimate commercial interests.

5. In the circumstances, the Applicant requests this Hon’ble Authority to treat the aforesaid documents and the commercially sensitive information contained therein as confidential and to take such appropriate measures as may be necessary to prevent their disclosure or publication, to the extent permissible under the applicable law and regulations and further requests that this Hon’ble Authority may be pleased to keep the Order/Ruling passed in the present proceedings confidential and not publish or disclose the same, or any part thereof, to any person other than the Applicant, in terms of the proviso to Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021, as amended by Notification No. 63/2022-Customs (N.T.) dated 05.07.2022. The. Applicant submits that disclosure of the said Order/Ruling at this stage may cause substantial commercial and competitive prejudice to the Applicant, as the proposed import transactions, pricing arrangements, commercial relationships, and business strategy underlying the present application are commercially sensitive and confidential, and therefore respectfully submits that the circumstances warrant protection of the Order/Ruling from publication or disclosure in accordance with the aforesaid regulatory framework.

6. Port of Import and reply from jurisdictional Commissionerate: The applicant in their Form CAAR-1. indicated that they intend to import the subject goods at the jurisdiction of Office of the Pr. Commissioner of Customs, Customs House, Kandla, Gujarat. The application was forwarded to the concerned Commissionerate for their comments on 22.05.2026 and Reminder letters dated 03.07.2026 & 23.07.2026, however, no comments/reply were received from the jurisdictional authority.

7. Details of Personal Ilearing;_. A personal hearing in the matter was held on 10.07.2026. Shri Murugan K.S., the authorised representative of the applicant, appeared and reiterated the submissions made in the application and the written submissions filed in support thereof. Ile submitted that the goods proposed to be imported, namely, cashew kernels split lengthwise into two halves^., are classifiable under CTII 0801 32 90. I le further sought a ruling as to whether the subject goods are covered by the Minimum Import Price (MIP) prescribed under DGFT Notification No. 59/2015-2020 dated 21.02.2023. The authorised representative also requested that the ruling be kept confidential in terms of Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021, as amended.

7.1 Nobody appeared for the PI -1 from the Department.

8. Discussion and Findings

8.1 I have carefully considered the application filed by the Applicant, the submissions made in the application, the written and oral submissions advanced during the personal hearing held on 16.07.2026. I _.have also examined the relevant provisions (A^–the Customs Act, 1962, the First Schedule to the .Customs Tariff Act, 1975, the General Rules for the Interpretation of the Import Tariff (GIR), the IISN Explanatory Notes, the applicable DUI’ Notification and the judicial precedents relied upon by the Applicant.

8.2 The first schedule to the Customs Tariff Act, 1975 mandates the General Rules of Interpretation (“GRIs”) which arc to be applied to determine classification under the Customs Tariff. Classification of goods in the Nomenclature shall be governed by the following principles:

The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions:

…………

3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall he affected as follows:

(a) The heading which provides the most specific description shall be preferred to providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

8.3 The Section Notes or Chapter Notes and Sub-I leading Notes give detailed explanation as to the scope and ambit of the respective Sections and Chapters. These notes have been given statutory backing and have been incorporated at the beginning of each Chapter.

8.4 The issues that arise for determination in the present application is as under:

(i) Whether the goods proposed to be imported, namely, “Cashew Kernel – split into two lengthwise commonly known in trade as cashew splits, are classifiable under Customs Tariff Item (CTH) 0801 32 90 of the First Schedule to the Customs Tariff Act, 1975?

(ii) Whether the said goods arc excluded from classification under Tariff Item (CTH) 0801 32 10 of the First Schedule to the Customs Tariff Act, covering “Cashew Kernels, Broken”?

(ii) Whether the provisions of I)GFT Notification No. 59/2015-2020 dated 21.02.2023, which prescribes a Minimum Import Price (MIP) for ‘cashew kernel-broken’ and “cashew kernel-whole”, are applicable to the import of “Cashew Kernel – split into two lengthwise if classified under CTI 0801 32 90?

8.5 I observe that the Cashew is the common name of a tropical evergreen tree Anticardium occidental, in the family Anacardiaceous. A cashew is a dicot, which is a flowering plant whose seeds contain two embryonic cotyledons that serve as a food source for the developing seedling. Cashew seeds are examples of dicotyledonous seeds and are often grouped with other common dicots like almonds, peas, and tomatoes. I)icot seeds are characterized by having two embryonic leaves (cotyledons), a protective seed coat made of two layers (teste and tegmen), and an embryo containing the radicle (root) and plumule (shoot). Dicot seeds arc generally easy to split into two halves because they contain two embryonic leaves or cotyledons, which can be separated. This characteristic is a key way to distinguish a dicot seed (like a bean) from a monocot seed (like corn), which has only one cotyledon and cannot be split into two distinct parts. Dicot seeds are generally easy to split into two halves because they contain two embryonic leaves, or cotyledons, which can be separated. This characteristic is a key way to distinguish a dicot seed (like a bean) from a monocot seed (like corn), which has only one cotyledon and cannot be split into two distinct parts. Following are the methods to Identify a I)icon Seed:

a) Examine the Seed: Look at the seed and try to split it in half.

b) Check for Two Halves: If it easily breaks into two equal parts, it is a dicot seed.

c) Look at the Contents: These two halves are the cotyledons, which serve as the seed’s stored food source for the developing embryo.

Examples

• Dicot Seeds (Two cotyledons): Beans, peas, peanuts, sunflower seeds, mangoes, and avocados.
• Monocot Seeds (One cotyledon): Corn, wheat, rice, lilies, and bananas.

Therefore, by very nature and property, the cashew nuts can be split into two and hence the split cashew kernel is different from broken cashew kernel since broken cashew kernels are whole/split cashew kernels broken into many pieces naturally or by purposefully.

From the above, it can be deduced that cashew kernels are dicotyledonous seeds, comprising two cotyledons naturally joined together. Separation along this natural seam results in two symmetrical halves without crushing, shattering or irregular fragmentation. 1 also observe that betel nut or areca nut is monocotyledonous seed/nut and do not have even natural scam to split naturally in two equal halves length-wise. However, the customs tariff, suitably and correctly specifies split areca nut in a specific entry (08028020) under Tariff Sub-heading 080280 with no other reason than its separate identity, marketability and trade parlance. The design of entries under “Tariff sub-heading 0802 80 representing areca nuts arc: Whole-0802 80 10; Split 0802 80 20; Ground 0802 80 30; Other-0802 80 90.

8.6 I observe that I leading 0801 of the Customs Tariff covers “Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled”. It is undisputed that the subject goods are shelled cashew kernels. The goods under consideration are admittedly shelled cashew nuts and therefore fall under sub-heading 0801 32. The relevant tariff entries under sub-heading. 080132 arc as under:

HSN Code	Description
0801	Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled
—	Cashew nuts
0801 31 00	In shell
0801 32	Shelled
0801 32 10	Cashew kernels, broken
0801 32 20	Cashew kernel, whole
0801 32 90	Other

8.6.1 The dispute is confined only to the appropriate tariff item under Sub-heading 0801 32, whether “Split” Cashew Kernels Are “Broken” or otherwise.

(a) Linguistic and Common Parlance Meaning

I observe that, in ordinary language, the term “split” denotes a clean division along a natural line of cleavage, whereas the term “broken” generally connotes rupture, damage or irregular fragmentation. The main difference is in its break. Split cashew are kernels naturally broken in two pieces lengthwise (two halves) like as ‘S’ shape. While broken cashew (pieces. butts, bits) are fragments broken cross wise or into smaller bits during processing. The split is deliberate/non accidental which requires special care and skill to make it whereas broken is accidental and it is emerged during processing. Both types of kernels i.e. split and broken offering similar flavour, cost is comparatively low in comparison with whole cashew kernel. The broken cashew kernel/nuts (butts, pieces, large white piece 1,WP, Small white piece SWP) are ideal for grinding into cashew butter, blending into sauces or Ibr use in granola etc. whereas split or whole cashew kernel are popular for cooking, baking and snacks where a split or whole/large pieces desired. It is also a fact that the whole kernel and split kernel are not one and the same as per utility, price and trade understanding. In nutshell split cashew kernel is form of broken one and all split may be considered as broken but not all broken cashews are split, hence the difference is obvious and is easily recognizable. Broken is general term but split is specific term with certain intent and commercial objectives. The Customs Tariff specifically provides the entry of broken cashew nut together with whole. But it is to underline that split cashew nut is physically and commercially different from whole as well as broken. The applicant has submitted some photographs of whole, split and broken cashew kernels which cannot be ignored and brushed aside.

8.6.2 The arrangement of Customs Tariff under cm 0801 particularly the subheading 080132-Shelled Cashew Nuts is as per follow:

CTH/CTSH/CN	Item description
0801 32	— Shelled:
0801 32 10	— Cashew Kernels, broken
0801 32 20	— Cashew Kernels, whole
0801 32 90	— Others

In view of the above table, it is evident from the tariff structure that shelled cashew kernels are classified under three distinct tariff items, namely, CTH 0801 32 10 for Cashew kernel, broken, CTH 0801 32 20 for cashew kernel, whole, and CTH 0801 32 90 fbr Other. The legislature has, therefore, provided specific entries for “broken” and “whole” kernels, while all other forms of shelled cashew kernels are covered under the residuary entry. A cashew kernel split lengthwise into two symmetrical halves is a distinct and identifiable commercial product, well recognised in the trade as a “split” kernel. Such goods cannot be regarded as either “whole” or “broken” within the meaning of the tariff. Since, no specific tariff entry exists for split cashew kernels, they are appropriately classifiable under the residuary Tariff Item CTH 0801 32 90 —Other.

8.7 Further, I find-that the term ‘split’ is different from ‘broken’ is well. recognised both by ‘dictionary meaning’ arid the scheme of classification in schedule I to ‘the customs tariff Act, 1975. Mariam-Webster dictionary defines the term ‘split’ as follows:

8.8 I find that that the classification scheme under the Indian Customs Tariff Act, 1975 distinguishes the ‘split’ from the ‘broken ones’ as per the classification contained in various chapters given below:

SPLIT:

0713 60 00	– Pigeon peas	(Catania Cajun)	kg.	30%	20%
0713 90	– Other :
0713 90 10	— Split		kg.	30%	20%
0713 90 90	— Other		kg.	30%	20%
0802 80	– Areca nuts :
0802 80 10	— Whole		kg.	100%	90%
0802 80 20	— Split		kg.	100%	90%
0802 80 30	— Ground		kg.	100%	90%
0802 80 90	— Other		kg.	100%	90%

BROKAN:

HS Code	Description	Unit	Rate	Additional Rate / Concession
0801 31 00	Cashew nuts – In shell	kg.	2.5%	Free
0801 32	Cashew nuts – Shelled
0801 32 10	Cashew kernel, broken	kg.	30%	20%
0801 32 20	Cashew kernel, whole	kg.	30%	20%
0801 32 90	Other	kg.	30%	20%
1006 30 10	Rice, parboiled	kg.	70%
1006 30 20	Basmati rice	kg.	70%
1006 30 90	Other	kg.	70%
1006 40 00	Broken rice	kg.	80%
1202	Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken
1202 30	Seed
1202 30 10	H.P.S.	kg.	30%	20%
1202 30 90	Other	kg.	30%	20%
1202 41	In shell
1202 41 10	H.P.S.	kg.	30%	20%
1202 41 90	Other	kg.	30%	20%
1202 42	Shelled, whether or not broken

Further, in addition to the dictionary meaning of the term ‘broken’ given as above, the HSN Explanatory Note provides for meaning of the term ‘broken’ as below: (5) Broken rice, i.e., rice broken during processing.

Therefore, ‘cashew kernel-broken’ having been specifically classified under the Tariff Item 0801 3210, makes ‘cashew kernel- split’ into two- lengthwise classifiable under other entry than 0801 3210.

8.9 I also observe that the Bureau of Indian Standards (BIS) for cashew kernels IS: 7750: 2013 deals with Standards for ‘whole’, ‘butt’, ‘split’ and ‘broken’ cashew kernels under the categories of grades A-1, A-2, A-3, A-4, A-5 & A-6 respectively as produced below:

A-1 Cashew Kernels — White Wholes

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
W-150	White wholes	White/pale ivory/light ash, characteristic shape	140–165	5	5 (NLSG & SW together)
W-180	White wholes	Same as above	175–200	5	5 (NLSG & SW together)
W-210	White wholes	Same as above	220–230	5	5 (NLSG & SW together)
W-240	White wholes	Same as above	240–265	5	5 (NLSG & SW together)
W-320	White wholes	Same as above	330–350	5	5 (NLSG & SW together)
W-450	White wholes	Same as above	440–490	5	5 (NLSG & SW together)
W-500	White wholes	Same as above	495–550	5	5 (NLSG & SW together)

A-2 Cashew Kernels — Scorched Wholes

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
SW	Scorched wholes	Kernels may be scorched/slightly darkened due to over-heating while roasting or drying in drier/borma	N.A.	5	7.5 (SSW)
SW-180	Scorched wholes	Same as above	185–200	5	7.5 (NLSG & SSW together)
SW-210	Scorched wholes	Same as above	220–230	5	7.5 (NLSG & SSW together)
SW-240	Scorched wholes	Same as above	240–265	5	7.5 (NLSG & SSW together)
SW-320	Scorched wholes	Same as above	330–350	5	7.5 (NLSG & SSW together)
SW-360	Scorched wholes	Same as above	375–400	5	7.5 (NLSG & SSW together)
SW-450	Scorched wholes	Same as above	440–495	5	7.5 (NLSG & SSW together)
SW-500	Scorched wholes	Same as above	495–500	5	7.5 (SSW)

A-3 Cashew Kernels — Dessert Wholes

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
SSW	Scorched wholes seconds	Kernels may be over-scorched, immature, shriveled (Pirival), speckled	N.A.	5	7.5 (DW)

A-4 CASHEW KERNELS — WHITE PIECES

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
B	Butts	White/pale ivory or light ash. Kernels broken cross-wise (evenly or unevenly) and naturally attached	N.A.	5	5 (SB)
S	Splits	White/pale ivory or light ash. Kernels split naturally lengthwise	N.A.	5	5 (SS)
LWP	Large white pieces	White/pale ivory or light ash	Kernels broken into more than two pieces and not passing through 4 mesh 16 SWG Sieve/4.75 mm IS Sieve (see IS 460)	Nil	5 (SW & SP together)
SWP	Small white pieces	Do	Broken kernels smaller than those described on LWP but not passing through 6 mesh 20 SWG sieve/2.80 mm IS Sieve (see IS 460)	Nil	5 (BB & SSP together)
BB	Baby bits	Do	Plumules and broken kernels smaller than those described on SWP but not passing through 10 mesh 24 SWG Sieve/1.70 mm IS Sieve (see IS 460)	Nil	1 percent (Cashew powder)

A-5 CASHEW KERNELS — SCORCHED PIECES

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
SB	Scorched butts	Kernels broken crosswise (evenly or unevenly) and naturally attached. Kernels may be scorched/slightly darkened due to overheating while roasting or drying in the drier/borma	N.A.	5	7.5 (DB)
SS	Scorched splits	Kernels split naturally lengthwise. Kernels may be scorched/slightly darkened due to overheating while roasting or drying in the drier/borma	N.A.	5	7.5 (DS)
SP	Scorched pieces	Kernels may be scorched/slightly darkened due to overheating while roasting or drying in the drier/borma	Pieces not passing through a 4 mesh 16 SWG Sieve/4.75 mm IS Sieve (see IS 460)	Nil	7.5 (SSP & SPS together)

A-6 CASHEW KERNELS — DESSERT PIECES

Grade Designation	Trade Name	Colour/Characteristics	Count/500 g Size Description	Broken Maximum (%)	NLSG NLG Maximum (%)
SPS	Scorched pieces seconds	Kernels may be over-scorched, immature, shriveled (Pirival), speckled (Karuniram), discoloured and light blue	Kernels broken into pieces but not passing through a 4 mesh 16 SWG sieve/4.75 mm IS sieve (see IS 460)	Nil	7.5 (DP & DSP together)
DP	Dessert pieces	Kernels may be deep scorched, deep brown, deep blue, speckled, discolored and black spotted	Kernels broken into pieces but not passing through a 4 mesh 16 SWG sieve/4.75 mm IS sieve (see IS 460)	Nil	7.5 (DSP)

From the above, it is clear that the cashew kernel is divided into whole, butts, split and broken pieces. Therefore, the categorisation of cashew kernels is statutorily recognised by the 131S and cashew kernel -split is distinctly identified as kernels that are split naturally lengthwise. It may be mentioned that the item proposed to be imported is the cashew kernel split into two lengthwise naturally (cashew kernel 2-piece split) and hence distinguishable with broken kernels.

9. I also observe that the classification of the item is also governed by common parlance understanding in the trade which is well recognised by various appellate forums including the Hon’ ble Supreme Court in the following decisions. In the case of Cornmr. Of C. Ex., New Delhi Vs Connaught Plaza Restaurant (P) Ltd.( 2012 (286) T.L.T. 321 (S.C.), the Hon’ble Supreme Court has categorically held that in absence of any definition about the product to be classified, the proper course would be to adopt common parlance test, in the following terms:

15. According to the rules of interpretation for the First Schedule to the Tariff Act,. mentioned in Section 2 of the Tariff Act, classification of an excisable goods shall be determined according to the terms of the headings and any corresponding chapter or section notes. Where these are not clearly determinative. of classification, the same shall be effected according to’ Rules 3, 4 and 5 of the general rules of interpretation. However, it is also a well-known principle that in the absence of any statutory definitions, excisable goods mentioned in tariff entries are construed according to the common parlance understanding of such goods.

Common Parlance Test :

18. Time and again the principle of common parlance as the standard_.* interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law maker; “it is an attempt to discover the intention of the Legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts. [(See Oswal Agro Ltd (supra)].

19. A classic example on the concept of common parlance is the decision of the Exchequer Court of Canada in The King v. Planter Nut and Chocolate Company Ltd. – (1951) C.L.R. (Ex. Court) 122. The question involved in the said decision was whether salted peanuts and cashew nuts could be considered to be “fruit” or “vegetable” within the meaning of the Excise Tax Act. Cameron J., delivering the judgment, posed the question as follows :

“…would a householder when asked to bring home fruit or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously ‘no ” Applying the test, the Court held that the words `fruit” and “vegetable” are not defined in the Act or any of the Acts in part materia. They are ordinary words in every-day use and are therefore, to be construed according to their popular sense.

20. In Ramavatar Budhaiprasad Etc. v. Assistant Sales Tax Officer, Akola – (1962) 1 SCR 279, the issue before this Court was whether betel leaves could be considered as “vegetables” in the Schedule of the C.P. & Berar Sales Tax Act, 1947 for availing the benefit qf exemption. While construing the import of the word “vegetables” and holding that betel leave v could not be held to be “vegetables”, the Court observed thus :

“…But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning “that sense which people conversant with the subject matter with which the statute is dealing would attribute to it.

21. In Commissioner of Sales Tax, Madhya Pradesh v. Jaswant Singh Charan Singh ­(1967) 2 SCR 720, the Court had 10 decide whether “charcoal” could be classified as “coal” under Entry 1 of Part III of Schedule II of the Madhya Pradesh General Sales Mx Act, 1958. Answering the question in the affirmative, it was observed as follows

“3. Now, there can he no dispute that while coal is technically understood as a mineral product, charcoal is’ manufactured by human agency from products like wood and other things. But it is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should he had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those cleating in them, that is to say, to their commercial sense … ………

xxx xxx xxx xxxx

“5. The result emerging from these decisions is that while construing the word ‘coal’ in Entry I of Part III of Schedule II, the test that would be applied is what would he the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales lax statute is being one levying a tax on goods must in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance: Viewed from that angle both a merchant dealing in coal and ci consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include ‘charcoal’ in the term ‘coal ‘. It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them ^–would in ordinary parlance as also in their commercial sense be spoken as coal.”

22. In Dunlop India Ltd. v. Union of India & Ors. – (1976) 2 SCC 241 – 1983 (13) L.T. 1566 (S.C.), at page 251, while holding that VP Latex was to be classified as “raw rubber” under Item 39 of the Indian Tariff Act, 1934, this Court observed :

“29. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the trade and its popular meaning should commend itself to the authority.”

“34. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits_ Once the articles •are in circulation and conic to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry.

Similar view was expressed by the Hon’ble Apex Court in the case of Mukesh Kumar Aggarwal &Amp; Co Vs State Of Madhya Pradesh (2004 (178) E.L.T. 3 (S.C.):

4. In a taxing statute word which are not technical expressions or words of art,. but are words of everyday use, must be understood and given a meaning, not in their technical or scientific sense, but in a sense as understood in common parlance i.e. “that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it”. Such words must be understood in their ‘popular sense’. The particular terms used by the legislature in the denomination of articles are to be understood according to the C01711110n, commercial understanding of those terms used and not in their scientific and technical sense “fbr the legislature does not suppose our merchants to be naturalists or geologists or botanists”.

In the case of Commissioner of Central Excise, Delhi-Iii Vs Uni Products India Ltd. (2020 (372) E.L.T. 465 (S.C.), the Hon’ble Supreme Court want on to state that in cases where an item is capable of being classified under two headings, common parlance test is the best way out.

23. “The common parlance test”, “marketability test”, “popular meaning test” are_ all. tools for interpretation to arrive at a decision on proper classification of a tariff entry. These tests, however, would be required to be applied i f a particular tariff entry is capable of being classified in more than one heads. So far as subject-dispute is concerned, we have already referred to Chapter Note 1 of Chapter 57. This note stipulates that carpets and other floor coverings would mean floor coverings in which textile materials serve as the exposed surface of the Article when in use. This feature of the car mats has not really been rejected by the revenue authorities as untrue in the order of the Commissioner, before whom assertion to that effect was made by the respondent.

10. In this regard, it is observed that the Customs Tariff Act, 1975 itself differentiates broken and split kind of classification and it is specifically provided therein. For example, split Areca nut falls under 08028020 (though it is mono cote seed); Pigeon peas split falls under 07139010. Further, the BIS also specifically endorses the cashew kernel.

Therefore, from the above mentioned facts, f3IS standard and the judgements on the common parlance test, the item under consideration, namely, cashew kernel- split into two lengthwise (cashew kernel 2-piece split) is appropriately classifiable under the HS Code 0801 3290 as the residuary entry to the single dash (-) entry ‘cashew nuts.

I also observe that under GRI-1, classification is governed by the terms of the headings and relevant Section or Chapter Notes. The goods are undisputedly shelled cashew nuts falling under I-leading 0801. At the six-digit level, GRI-6 becomes applicable, requiring determination among the tariff items under sub-heading 0801 32.

Since the tariff does not specifically provide for split cashew kernels under either CTH 0801 32 10 or CTI 0801 32 20, those specific entries cannot be extended by interpretation to cover a product which is commercially and physically distinct from both whole and broken kernels. Where the legislature intended to classify only whole and broken kernels under separate tariff items, any other form of shelled cashew kernel necessarily falls outside their scope.

Accordingly, split cashew kernels arc appropriately covered by the residual tariff item CTH 0801 32 90 — “Other”, which is intended to encompass all shelled cashew kernels not specifically described under the preceding tariff items. ‘Phis interpretation is also consistent with the structure of the Indian Customs Tariff, wherein CTH 0801 32 90 serves as the residual entry For shelled cashew kernels other than whole or broken. In the absence of a specific tariff entry covering “splits”.

11. In view of the facts and circumstances, I observed as follows:

(i) Me goods proposed to be ‘imported, namely “Cashew Kernel — split into two lengthwise”, are correctly classifiable residual entry under Customs tariff item (CTH) 0801 32 90 as “Other”. It is therefore submitted that the subject goods do not fall within the scope of either tariff item 0801 32 10 covering “Cashew kernel, broken” or tariff item 0801 32 20 covering “Cashew kernel, whole”.

(ii) The said goods, namely, cashew kernels split into two pieces lengthwise (“cashew splits”), are excluded from classification under Customs Tariff Item (CTH) 0801 32 10 of the First Schedule to the Customs Tariff Act, 1975, which covers “Cashew kernel, broken”, as cashew splits are commercially and physically distinct from broken cashew kernels.

(iii) It is well settled that trade policy restrictions, being fiscal and regulatory in nature, must be strictly construed and cannot be applied to goods not expressly covered therein. Accordingly, I also find that I)GFT Notification No.59/201.5-2020 dated 21.02.2023 prescribes a Minimum Import Price (MIP) of Rs.680 per kg for “Cashew kernel, broken” and Rs.720 per kg for “Cashew kernel, whole”, subject to the conditions specified therein. Since the proposed goods, namely “Cashew Kernel split into two lengthwise”, arc not classifiable under either of the aforesaid tariff items but under tariff item 0801 32 90 as “Other”, the MIP conditions prescribed under the said notification are not applicable to the proposed imports.

12. In view of the foregoing discussion, the findings recorded and the legal provisions discussed above, I rule as under:

(i) The goods proposed to be imported, namely “cashew kernel split into two lengthwise (cashew kernel two-piece split)”, arc rightly classifiable under Customs Tariff Item (CTI) 0801 32 90 of the First Schedule to the Customs Tariff Act, 1975.

(ii) The said goods, namely cashew kernels split into two pieces lengthwise (“cashew splits”), arc excluded from classification under Customs Tariff Item (CTH) 0801 32 10 of the First Schedule to the Customs Tariff Act, 1975, which covers “Cashew kernel, broken”, on the ground that cashew splits arc commercially and physically distinct from broken cashew kernels.

(iii) DGFT Notification No.59/2015-2020 dated 21.02.2023 prescribes a Minimum Import Price (MIP) for the goods proposed to be imported, namely “Cashew Kernel — split into two lengthwise”, is not applicable subject to conditions prescribed under the said notification.

13. The applicant has requested the Authority to keep order/ruling Confidential in their application. Regulation 27 of the Customs Authority for Advance Rulings Regulations, 2021 as amended vide Notification No. 63/2022-Customs (N.T.) dated 20.07.2022 reads as:

27. Publication of orders or advance rulings – Such of the orders or advance rulings of the Authority, as the Authority deems for publication in any authoritative report or the press, may be released for such publication on such terms and conditions as the Authority may specify.

Provided that at the request of the applicant, the Authority may take necessary steps in order to protect commercially confidential information.

Accordingly, the request of the applicant to protect commercially confidential information is approved by keeping the ruling Confidential.

14. I rule accordingly.