In re Harnath Stock Huts (CAAR Mumbai)
In a multi-faceted decision concerning the classification of processed nuts, the Customs Authority for Advance Rulings (CAAR), Mumbai, has provided a definitive ruling for roasted cashew nuts while refraining from passing orders on roasted areca nuts and menthol scented sweet supari, citing adherence to judicial precedents and ongoing litigation. The ruling came in an application filed by Harnath Stock Huts.
The CAAR provided a clear classification for “Roasted and/or Salted Cashew Nuts,” placing them under Customs Tariff Heading (CTH) 2008, specifically under the Tariff Item (CTI) 20081910. The authority reasoned that roasting is a significant preparatory process that distinguishes the product from raw nuts, which fall under Chapter 8 of the Customs Tariff. Chapter 20 is designated for fruits and nuts that are “otherwise prepared or preserved.”
The ruling emphasized that CTI 20081910 is a specific entry for “Cashew nut, roasted, salted or roasted and salted.” Citing Supreme Court judgments, including Commissioner of Central Excise v. Wockhardt Life Sciences Ltd., the authority reiterated the legal principle that a specific entry in the tariff must always prevail over a general or residuary one. The eligibility for preferential duty benefits under trade agreements with ASEAN and Sri Lanka was deemed applicable, provided the importer furnishes valid proof of origin documents to customs officials.
However, the authority took a different approach for the other two products mentioned in the application.
For “Roasted Areca Nuts,” the CAAR declined to issue a new ruling, effectively disallowing the application for this item. This decision was based on the fact that the issue has already been conclusively decided by a higher judicial forum. The authority pointed to the Madras High Court’s judgment of August 1, 2023 (The Commissioner of Customs vs. M/s Shahnaz Commodities International P. Ltd. and others), which upheld that roasted areca nuts are correctly classified under CTH 20081920. The High Court had affirmed that roasting is distinct from simple drying and that the specific entry for roasted nuts must be applied.
Invoking proviso (b) to Section 28-I(2) of the Customs Act, 1962, which bars the authority from ruling on a question already decided by a court, the CAAR stated that since no new facts were presented, it would not re-examine the settled matter.
Similarly, the CAAR refrained from ruling on the classification of “Menthol Scented Sweet Supari.” It noted that an identical matter, in the case of M/s Bag Industries, is currently sub judice before the Delhi High Court, which has also stayed the operation of a previous CAAR ruling on the subject. Citing judicial discipline and the provisions of the Customs Act that restrict rulings on matters pending before a court, the authority deferred its decision. It informed the applicant that they would have the liberty to approach the authority again after the matter is finally decided by the High Court.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
