Classification for the proposed import of 1) Processed API Betel-nut product known as Supari and 2) Processed Betel-nuts unflavoured chemically processed Supari in small cut-pieces (not split).
Roasted Areca Nuts – whole as well as cut – merit classification under Heading 2008 and specifically under subheading 2008 19 20 of the First Schedule of the Customs Tariff Act, 1975.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/ S. Shahnaz Commodities International Private Limited (IEC No.: ABFCS0068P) filed an application for advance ruling – CAAR-1 – on 29.09.2022 seeking a ruling on the classification of “Roasted Areca Nuts”. Applicant submitted two more CAAR-1 applications on the same issue on 31/10/2022 pertaining to two more jurisdictional Commissionerates of Customs.
2.1 The applicant intends to import “Roasted Areca Nuts (Whole) And Roasted Areca Nuts Cut” from Burma, Indonesia, Sri Lanka and Singapore. As per the applicant. the process of ‘roasting’ is neither defined in the Customs Tariff nor in the HSN Explanatory/Sections/Chapters Note. They have submitted the processes carried out on the imputed goods as follows:
1) De-husking the raw betel/ areca nut and drying the same before being fed into the roasting oven;
2) Feeding the fresh areca nuts into a seed roasting oven, heating up to 100 deg. C and roasting the fresh areca nuts in an oven of the seed roasting machine;
3) Take the areca nuts out of the oven, cooling at room temperature and feeding back into the oven, heat and roast them again, and perform this cycle until the water content of the fresh areca nuts is 10 to 15 per cent; and
4) The fresh areca nuts are repeatedly heated. roasted and cooled to ensure that the areca nuts are quickly cooled and shrunk after thermal expansion so that the roasted areca nuts have higher quality; the roasting time is around 2-3 days.
In India, areca nut is chewed for a variety of reasons such as stress reliever, mouth freshener, concentration improver and digestive following food intake.
2.2 As per the applicant. the above-mentioned goods are specifically covered and are classifiable under CTH 2008 19 20 of the Customs Tariff Act, 1975. As per the HSN Explanatory Notes to Heading 2008, given below, Dry Roasted Areca (or Betel) Nuts are specifically covered under Chapter Heading 2008. They have cited case laws of L.M.L. Ltd. Versus Commissioner of Customs Reported in 2010 (258) E.L.T 321 (S.C), Holostick India Ltd. Versus Commissioner of Central Excise, Noida Reported in 2015 (318) E.L.T 529 (S.C), Collector of Central Excise, Shillong Versus Wood Craft Products Ltd Reported in 1995 (77) E.L.T 23 (S.C.) to submit that the HSN Explanatory Note is the safe and dependable guide in the matters of classification of items.
As per the explanatory note to Chapter 8 fruit and nuts of this Chapter remain classified here even if put up in airtight packing (e.g., dried prunes, dried nuts in cans). In most cases, however, products put up in these packing have been prepared or preserved otherwise than as provided for in the headings of this Chapter, and are therefore excluded ,from chapter 8 (and will fall under Chapter 20). The applicant states that as the processes mentioned in Chapter 8 are different from the processes performed on impugned goods, they are excluded for the purpose of classification from Chapter 8 of the Customs Tariff Act, 1975 (hereinafter also referred as ‘Tariff ).
2.3 In respect of alternate CTH 2106, the applicant draws attention to Note 2 and explanatory note (A) to Chapter 21. As per Note 2 to Chapter 21, “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. As per the Explanatory Note, the heading covers preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk. etc.), for human consumption. As per the applicant, the goods have undergone roasting, but they don’t contain lime, Katha (catechu) and tobacco.
Further, roasted betel nuts can be consumed directly by merely cutting them into pieces. Therefore, the goods are equally classifiable under Chapter 21 of the Customs Tariff Act, 1975.
2.4 In their application, the applicant also refers to and discusses the case law of M/s. Crane Betelnut Powder Works reported in 2007 (210) E.L.T 171 (S.C). In this case, Hon’ble SC purely went into the aspect of whether crushing and adding other ingredients to betel-nut would amount to manufacture or not. Upon convincing that crushing and mixing other ingredients to the betel-nut into powder would not amount to manufacture, the Court ruled in favour of the party thus permitting them to classify the item under the CTH 0803. Based on the above, earlier rulings issued by the Customs Authority for Advance Rulings rejected the classification of betel-nut products under the HS Code 2106 90 30 and confirmed the same under Heading 0802 by holding that the processes such as boiling, slicing, removal of impurities, metal deflection, garbling, polishing, roasting, cutting and adding flavours to the betel-nut do not alter the nature and characteristics of the product so as to take it outside the purview of the Heading 0802. However, after the subsequent amendment to the Central Excise Tariff Act, 1985 vide The Finance (No.2) Act, 2009 (Act No. 33 of 2009 dated 19th August 2009) with the insertion of Note to Chapter 21, the decision of Hon’ble SC in the above-mentioned case law was rendered infructuous. In support of the above, they have cited the ruling issued in the case of M/s Excellent Betel Nut Products by the Authority for Advance Rulings, wherein the authority took proper judicial notice and distinguished the decision in the case of Crane Betel nut powder works Vs Commissioner of Customs & C. EX, Thirupathi (2007 (210) ELT 171 (SC)) and held the classification of processed betel nuts under the CTH 21069030.
In the context of their above-mentioned submissions, the applicant has requested the correct classification of the roasted areca nuts as CTH 2008 19 20 of the Customs Tariff Act, 1975.
3.1 The applicant in their CAAR-1 indicated that they intend to import the impugned goods from the jurisdiction of Commissioner of Customs II, Chennai Customs. The application was forwarded to the jurisdictional Commissioner of Customs for comments on 3/10/2022. Further the additional submissions dated 9/11/2022 received during the course of hearing were forwarded on 16/11/2022 for response from the jurisdiction of Commissioner of Customs. Since the applicant submitted two more CAAR-1 applications on the same issue on 31/10/2022 pertaining to two more jurisdictional Commissionerates of Customs, namely Indore and Tuticorin, these applications and additional submissions were forwarded to respective jurisdictional Customs Commissionerate on 16/11/2022 seeking their response.
3.2 The jurisdictional Customs Commissionerate, Chennai sent the comments vide letter dated 14.11.2022. No comments were received from other two jurisdictional Commissionerates. The comments received from jurisdictional Customs Commissionerate, Chennai are summarised below:
1. For the goods to be imported there are two sets of processes that are followed for making roasted betel nuts. One set of processes is intended for cleaning and the second set is for heating and roasting. These processes are covered under Note 3 to Chapter 8. In the present case, the roastingansen .ent cooling of betel nut would not take the end product (out) from the scope of dried fruit. They have cited a ruling issued by CAAR New Delhi vide ruling no. CAAR/Del/Vaibhav/21/2021 in the case of M/s Vaibhav Enterprises, wherein the CAAR classified API Supari, chikni supari, boiled supari, unflavoured supari and flavoured supari under Chapter 8 of the first schedule of the Customs Tariff Act, 1975.
2. The roasting or mere addition of certain additives for the limited purpose of enhancing preservation or appearance or ease of consumption per se does not result in obtaining a preparation of betel nut. Further, every irreversible process does not result in a “preparation of the raw material”. Even after these processes, the betel nuts retain the character of betel nut and do not qualify to be considered as “preparations” of betel nut. The goods do not change the essential character. Therefore, they do not merit a change in classification from Chapter 8 to Chapter 21. They have cited the case law of M/s. Crane Betelnut Powder Works reported in 2007 (210) E.L.T 171 (S.C) in support of the They have also submitted that the ratio of said judgement was applied to the CAAR New Delhi ruling no. CAAR/Del/Sarveshwari/11/2021 in the case of M/s Sarveshwari Industries.
3. Note 2 to Chapter 21 states that “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. Betel nut is one of the ingredients in the preparation. It is not clear in the submission as to what are the other ingredients in the preparation and what the process is for adding those ingredients.
4. The term roasted betel nut is not mentioned in the Customs Tariff Act, 1975. Roasted betel nut is a term of common trade parlance/ invented word.
5. In respect of Chapter 20, it is pointed out that chapter 20 does not cover vegetables. fruit or nuts, prepared or preserved by the processes specified in Chapters 7, 8 and 11. Mere roasting of betel nut does not render a new product or does not alter the character of the original good, but remains the betel nut which is already classified under Chapter As the betel nut is already mentioned in Chapter 8, it can’t be classified in Chapter 20.
6. They have also submitted the list of rulings issued by CAAR New Delhi in cases of M/s Cosmos International, M/s Dry Nut Enterprises, M/s Exor Overseas, M/s Global Impex, M/s Great Nuts Impex Pvt. Ltd., M/s Perfect Trading, M/s PG International, M/s Sarveshwari Industries, M/s Star Spices, M/s UBS Exports International Pvt. Ltd. and M/s Vaibhav Enterprises, wherein the betel nut products were classified under Chapter 8.
4.1 A personal hearing was held on 09.11.2022 at 03:12 pm. Shri Sithik Gani (Director) and E. Ramesh, (Advocate) appeared for the hearing. No one appeared on behalf of the jurisdictional commissionerate. The applicant submitted additional submissions supported by few empirical studies. During the course of hearing they presented samples of raw areca nuts, roasted areca nuts, and cut roasted areca nuts. They also submitted samples of ready-to-sale shredded roasted supari approved by FSSAI in which the ingredient is only a roasted areca nut. Additionally, they submitted samples of raw areca nut and dried areca nut. They stated that the process of roasting changes the chemical and physical characteristics of areca nut reducing arecoline and tannin content as well as colour and moisture. On the basis of their submissions, they stated that their product does not fall under Chapter 8 of the Tariff. They requested to issue a ruling upholding their claim to classification under CTH 20081920 based on HSN explanatory notes and their submissions.
4.2 The applicant made some additional submissions on 09.11.2022. The summary of additional submissions is as follows:
1) The roasting is done using firewood/ palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius. As a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius.
2) Roasted betel nut undergoes a change in its appearance as well as chemical characteristics on account of the roasting process. There is a visible deposition of an ash-like substance on the outer surface of the betel nut. There is a substantial change in the chemical characteristics of the betel nut product on account of the roasting process. It has been established through research (submitted along with additional submission) that the tannin and arecoline content of raw betel nut/ areca nut gets substantially changed by subjecting the same to roasting and boiling. Therefore, roasted betel nut is a distinctive product of betel nut making it suitable for immediate consumption.
3) Roasting is not aimed at additional preservation or stabilisation or to improve or maintain their appearance.
4) The article titled “Estimation of arecoline content of various forms of areca nut preparations by high-pressure thin-layer chromatography” throws light on the chemical composition of various forms of areca nuts. As per the article, Polyphenols (flavonols, tannins) constitute a large proportion of the dry weight of the nut. Its content in areca nut may vary depending on the degree of maturity and its processing method. The tannin content is highest in unripe areca nuts and decreases significantly with increasing The roasted nut possesses the highest average content of tannins, ranging from 5 to 41% (mean, 1.4%); the average tannin content of sun-dried nuts is 25%; and the lowest levels are seen in boiled nuts, which contain 17%. The article further states that raw areca nut contains the highest concentration of arecoline (1.15 ± 0.008) followed by pan masala preparations (0.94 ± 0.006), least content in boiled areca nut (0.79 ± 0.009), while roasted variety exhibited an intermediate level (0.85 + 0.007).
5.1 I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing as well as the response received from the jurisdictional Customs Commissionerate. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework having bearing on the classification of the betel-nut in its various forms. The issue before me is the classification of roasted areca nuts and roasted areca nuts cut.
Arecanut is a tropical plant. This tree belongs to the palm tree species. The kernel obtained from the fruit of areca nut palm is known as the betel nut or supari in India. The raw betel nut obtained is subjected to various processes to produce various products. Depending upon the specific value additions nia,.:+wfv.-mecut, different varieties of betel nut such as API Supari, chikni supari, boiled supari, dried supari, unflavoured supari, roasted supari, supari preparations etc are obtained. The goods covered under the present application are roasted betel nuts. Applicant has stated that the following processes are involved in producing roasted betel nuts. The raw betel nut is de-husked and then sun-dried. The dried betel nuts are then fed to roasting ovens where they are roasted at the temperature of 130-150 degrees Celsius. Subsequently, the roasted betel nuts are cooled at room temperature. This cycle of roasting and cooling is repeated a few times till the desired quality of the product is obtained. The processes mentioned above cause changes in physical and chemical characteristics. Roasting causes the deposition of an ash-like substance on the outer surface of the betel nut. It imparts a charred appearance to the betel nut. Roasting also causes a substantial change in chemical composition, especially in respect of tannin and arecoline content. Roasted Areca Nut is used for eating (mukhwas) directly as well as with paan (betel leaf). During the course of the hearing, the samples of roasted supari were presented by the applicant and same were examined. On visual comparison the colours of roasted supari and normal supari were found different. Roasted supari was dark grey in colour while normal supari was brown in colour. Roasted supari without the addition of any ingredients to it is saleable in the Indian market in various forms like tukda (pieces) roasted supari as well as shredded roasted supari. It was observed that these roasted supari products are sold in the market without any additives or without subjecting to any other preparation than the roasting process. These roasted supari variants are approved by FASSI, a government agency.
5.2 Before deciding on the issue, let me deliberate on the legal framework and relevance of various case laws and rulings cited by both the applicant and jurisdictional commissionerate. The present application of the applicant needs to be seen in the context of a legal framework governed by the Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes.
Now, let me discuss the relevance of M/s. Crane Betelnut Powder Works reported in 2007 (210) E.L.T 171 (S.C) cited by the jurisdictional commissionerate, which formed the base for various rulings mentioned by both the applicant as well as jurisdictional commissionerate. The aforementioned decision was in relation to the Central Excise Act, 1944 and the question was as to whether any such changes brought in the betel nut amount to manufacture under definition in section 2(f) of the Central Excise Act or not. The Supreme Court judgement in the case of M/s Crane Beetlenuts stands nullified due to subsequent amendment in Chapter 21 of the Central Excise Tariff Act, 1985 due to the insertion of a chapter note in chapter 21. Hence recourse to any rulings which were primarily based on the honourable Supreme Court judgement in M/s Crane’s case is futile under the present legal framework. Further, I find that the betel nut finds classification in its various forms in chapters 8, 20 and 21 of the schedule I of the Customs Tariff Act, 1975 read with HSN Explanatory notes to the relevant headings under these chapters. General Rules of Interpretation (GRI), specifically rule 1 and rule 3(a), to the Customs Tariff Act, 1975 provide further context for understanding of various tariff entries in the Tariff The legal framework mentioned above has to be factored in while deciding classification of betel-nut proposed to be imported by the applicant.
5.3 I observe that none of the rulings referred by both the applicant as well as jurisdictional commissionerate dealt with the impugned goods i.e. roasted betel nuts. Any reference to API Supari, Chikni supari, boiled supari and Unfiavoured supari is not relevant in the present case as a product for which an application for advance ruling is filed is distinctly different from all these varieties of supari. Roasted areca nut, which is a roasted supari, is a distinctly different product in terms of physical & chemical character, colour as well as the presence in the market as a distinct saleable product. I find that none of the advance rulings referred to in the Chennai Commissionerate’s reply pertains to issue of classification of the roasted supari and any reference to these rulings will not help us decide the present matter. We cannot import and apply the ratio of classification decisions in case of any other variant of supari to the roasted supari, be they may be from chapter 8 or chapter 21. Doing so will be against the provisions of the General Rules of Interpretations (GRI) of Customs Tariff Act, 1975. Therefore, in the absence of relevant legal case laws for impugned goods while deciding the present application, the section note, chapter note and HSN explanatory note form the foremost basis for the classification of goods. In the case of Collector of Customs, Bombay Vs Business Forms Ltd, 2002-TIOL-277-SC-CUS-LB, the Hon’ble court held that Explanatory Notes to HSN need to be given due consideration, for classifying goods. Similarly, in various other case laws specified in para 2.1, it was held that HSN Explanatory Note is the safe and dependable guide in the matters of classification of items.
5.4 From the submissions of the applicant and the comments from the jurisdictional commissionerate, the classification of roasted betel nuts involves examination of three different chapter entries in the Tariff reproduced below:
Chapter 8 Edible fruit and nuts; peel of citrus fruits or melons
Chapter 20 Preparations of vegetables, fruit. nuts or other parts of plants
Chapter 21 Miscellaneous edible preparations
Rule 1 of the General Interpretation Rules (GIR) lays down that 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. Based on this fundamental rule I proceed further to analyse present issue.
5.5 Chapter 8 covers fruit, nuts and peel of citrus fruit or melons (including watermelons), generally intended for human consumption (whether as presented or after processing). As per HSN explanatory notes these goods may be .fresh (including chilled), frozen (whether or not previously cooked by steaming or boiling in water or containing added sweetening matter) or dried (including dehydrated, evaporated or freeze-dried); provided they are unsuitable for immediate consumption in that state, they may be provisionally preserved (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions). The note specifies the physical status of the goods along with corresponding processes that could be carried on those goods under this chapter. Note 3 to Chapter 8 further states that Dried fruit or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes:
(a) for additional preservation or stabilisation treatment, sulphuring, the addition?
(b) to improve or maintain their appearance (for example, by the addition of vegetable oil or small quantities ofglucose syrup), provided that they retain the character of dried fruit or dried nuts.
The areca/ betel nut is mentioned in Heading 0802, specifically under subheading 080280. The explanatory note to Heading 0802 states that This heading also covers areca (betel) nuts used chiefly as a masticatory. One of the main use of the goods under consideration is masticatory. Therefore, the impugned goods satisfy this note. However, the process of roasting is not finding mention anywhere in this Explanatory Note. I also find that the roasted betel nuts – complete or cut – are fit for immediate human consumption without addition of any other ingredient as seen during the course of hearing on the basis of examination of FASSAI approved samples.
5.6 Now let me examine whether processes carried out on the subject goods are covered by the processes specified in this chapter. The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here it is important to understand the difference between the processes of drying and roasting. The terms, however, are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon’ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that “the commonly accepted sense of a term should prevail in construing the description of an article offood”. In common trade parlance, “drying” is a method of food preservation by the removal of water. On the other hand, “roasting” means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process.
5.7 The jurisdictional Commissonerate in their comments stated that the term roasted betel nut is not mentioned in the Customs Tariff Act and that roasted betel nut is a term of common trade parlance/invented word. In this regard, I disagree with the observations of the jurisdictional commissionerate that the term is not mentioned in the Customs Tariff Act. I find following CTH specifically mentioned in the Tariff.
CTH 2008: Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included
-Nuts, ground nuts and other seeds, whether or not mixed together: 2008 19 20 — Other roasted nuts and seeds
While examining the scope of CTH 2008 I find that, as per HSN Explanatory Notes, heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. Specifying what is included in this heading, the explanatory note states that Almonds, ground nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives.
From the forgoing it is observed that the impugned goods i.e. roasted betel nuts, find specific reference in the chapter 20 of the schedule I of the Customs Tariff Act 1975 as well as corresponding HSN Explanatory Note. It is important to pay attention to the fact that in the above explanatory note a process of roasting is not specifically mentioned as a process of preservation or stabilisation or a process to improve or maintain the appearance. This corroborates the finding that the process of roasting is not covered by Note 3 to Chapter 8 and hence these products, roasted betel nuts – complete as well as cut – are not classifiable under chapter 8 of the Tariff.
5.8 Further, I don’t find the term- “roasted betel nuts”, as the invented words of the applicant. The applicant submitted sample products packaged, labelled and marketed as roasted betel nuts during the personal hearing. Even on various online marketplaces like https://www.amazon.in/, hups://indiamart.com, haps://flipkart.com etc roasted betel nuts as products are sold. This clearly indicates that the goods have both buyers and sellers and that they are known in the trade and sold in the market as roasted betel nuts. Therefore, assuming without admitting, even if the term is not defined in the statute, the product has to be understood and recognised in terms of common trade parlance. It is a well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning. Hon’ble Apex Court in the matter of M/s. United Offset Process Pvt. Ltd. Vs. Asst. Collector of Customs, Bombay and Others [1989 Supp. (1) SCC 131], “If there is no meaning attributed to the expressions used in the particular enacted statute then the items in the customs entries should be judged and analysed on the basis of how these expressions are used in the trade or industry or in the market or, in other words, how these are dealt with by the people who deal in them, provided that there is a market for these types of goods”. The roasted betel nut is an independent product, which is sold in the market in both packed and unpacked form. The applicant submitted samples of both during the personal hearing. The packed roasted betel nuts are labelled and marketed as roasted betel nuts/ roasted supari and carry the stamp of approval by the FASSAI. Therefore, impugned goods are known in the trade as roasted betel nuts only. In view of forgoing discussion and based on this specific tariff heading in the Tariff and corresponding HSN Explanatory Note explaining the scope of the heading 2008 I set aside the contention of the jurisdictional commissionerate.
5.9 Note 3 to Chapter 8 specifies certain treatments that could be carried out on the dried nuts for additional preservation or stabilisation or to improve or maintain their appearance. The applicant in their application has declared that the objectives of the roasting are not as specified in the said note. Further, as per the above note, the processes that could be carried out are moderate heat treatment, sulphuring, and the addition of sorbic acid or potassium sorbate by the addition of vegetable oil or small quantities of glucose syrup. Roasting is different from all the processes mentioned above. Roasting, as submitted by the applicant, is carried out using firewood/ palm kernel-based ovens and the temperature of the flames is around 600 degrees Celsius, due to which betel nuts are roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. This clearly_irldicates that the roasting is much more than mild heat treatment. Even in the generally understood meaning of the terms, it is understood that roasting involves severe heat treatment and is different from moderate heat treatment. Therefore, the impugned goods do not satisfy Note 3 to Chapter 8. Consequently, the submission of the jurisdictional commissionerate that the process of roasting is covered in only Chapter 8 is untenable.
6.1 Chapter 20 of the Tariff covers the Preparations of vegetables, fruit, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapters 7, 8 or 11. Therefore, vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are classifiable in Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of a plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Heading 2008 covers Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included. Roasting is a process used for bringing in to existence roasted nuts and as discussed earlier I find that the processes mentioned in chapter 8 do not cover roasting process.
6.2 The jurisdictional Commissionerate in their comments submitted that mere roasting of the betel nut does not constitute preparation. Here, I observe that Chapter 20 covers the preparation of nuts. One of the processes for preparing the impugned goods is specified in Heading 2008, i.e. roasting. Roasting is the essential process for the preparation of impugned goods. I observe that in the previously referred HSN Explanatory Note to chapter 20 a reference to “dry-roasted, oil-roasted or fat-roasted” indicates the principal processes of preparation that would change the classification of nuts from Chapter 8 to Chapter 20. Further, the goods under consideration are not excluded by any chapter note or explanatory note from Heading 2008. Therefore, it is evident that the roasted betel nuts are classifiable under Heading 2008 based on the terms of the Heading 2008 and Notes to Chapter 20. Therefore, I find the submission of the jurisdictional commissionerate is legally untenable.
7. As per General Rules of Interpretation (GIR) 3(a) of the Customs Tariff Act, 1975, when by application of GIR 2(b) or for any other reason, the goods are, prima facie, classifiable under more than one Heading, the most specific description’ is preferred. When the Chapter/ Section notes along with terms of heading and explanatory notes are examined for both Headings 0802 and 2008, it is observed that roasted betel nuts find a specific description in Heading 2008. Therefore, on the application of GIR 3(b), the subject goods merits classification under Heading 2008 and more specifically under Subheading 2008 19 20 as “Other roasted nuts and seeds–.
8. In regards to remaining competing Chapter 21. it is observed that it includes within its ambit, miscellaneous edible preparations. The relevance of Chapter 21 is already discussed in para 5.1. Supplementary note 2 to Chapter 21 states that in this Chapter “betel nut product known as Supari” means any preparation co 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. Betel nut product known as “Supari” is mentioned in Subheading 21069030. Heading 2106 covers food preparations not elsewhere specified or included. Those food preparations not specified or included elsewhere in the tariff being preparations for human consumption are to be classified under this heading. Therefore, it appears that it is a residuary entry in respect of edible food preparations. As a result, edible preparations shall be classified under this entry only if the same is not classifiable under any of the other specific entries for edible preparations. As the goods under consideration are already included in Heading 2008 of the Customs Tariff Act, 1975, they stand excluded from the scope of Chapter 21.
9. In view of the foregoing discussions, I rule that Roasted Areca Nuts – whole as well as cut – merit classification under Heading 2008 and specifically under subheading 2008 19 20 of the First Schedule of the Customs Tariff Act, 1975.