CUSTOMS AUTHORITY FOR ADVANCE RULINGS

YASHWANT PLACE, SATYA

MARG,
5 FLOOR, NDMC BUILDING,
CHANAKYAPURI,
NEW DELHI-110021

Email:cus-advrulings.del@gov.in]

Present
for Advance Rulings, New Delhi)
Vijay Singh Chauhan (Customs Authority
The day of 21 October, 2021
R u l i n g No. C A A R / D e l / V a i b h a v / 2 1 / 2 0 2 1

VII/(CAAR/Delhi/Vaibhav/45/2021
In Application No.

Name and address of the applicant M/s Vaibhav Enterprises,

WZ-32A, Shop No.1, Asalatpur,
Janakpuri, New Delhi-110058

Principal Commissioner of Customs,

Commissioner concermed:
Chennai l, Customs House,
60, Rajaji Salai, Chennai-66000 1

Principal Commissioner of Customs

(Preventive), 55-17-3, C-14, 2nd Road,
Industrial Estate, Auto Nagar,
Vijaywada-520007

Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin, Tamil Nadu-628004

Present for the Applicant: Mr. Vaibhav Uppal, Proprietor

Present for the Department: None

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Osthot.
 RULING

1. M/s Vaibhav Enterprises, a resident proprietorship firm having IEC No. 0515063908, PAN
AAYPU3493R and GSTIN No. 07AAYPUB493R 1Z7 (M/s Vaibhav, in short), has filed an
application dated 29.07.2021 secking advance ruling under section 28-H ofthe Customs Act, 1962
before the Customs Authority for Advance Rulings, New Delhi (CAAR, New Delhi in short). On
SCrutiny of the application, it was found to be in order as per CAAR Regulations, 2021 and the
application was accordingly registered under serial No. 13/2021-Delhi dated 29.07.2021.

2. On registration of the application, the concerned Principal Commissioners/Commissioner of

Customs were requested vide letter dated 13.08.2021 to furnish their comments in the matter.
However, despite a subsequent reminder dated 13.09.2021, including intimation regarding
personal hearing on 22.09.2021, no comments or communication have been received from the
concerned Principal Commissioners/Commissioner. The applicant, Shri Vaibhav Uppal
proprietor attended the personal hearing on the said date. In his submission, Shri Uppal described
the products in question, referred to the earlier rulings of the erstwhile AAR and claimed that
import of these products was being allowed under Chapter 21 at some Customs formations in
respect of atleast few importers. The Authority explained the legal framework of advance rulings
including scope of Section 28J of the Customs Act, and cited reference to his own rulings on the
same question of classification of betel nut products, wherein it has been ruled that the same are
classifiable under Chapter 8, even as the preferability of consistency in classification was
recognized.
The applicant, vide the aforesaid application, has sought ruling by CAAR, New Delhi on the
question of classification of six items, the details of which are summarized as under:

6) API Supari': Following processes are conducted on raw green fresh betel nut: removing of
large impurities by labour, boiling in water for 6 hours, mixing food starch, drying, polishing
and packaging.

(ii) Chikni Supari': Following processes are conducted on raw green fresh betel nut. Removing
of large impurities by labour, slicing in small pieces, boiling in water for 6 hours, mixing food
starch, drying, polishing and packaging.

(ii) Unflavored Supari': Following processes are conducted on raw dried betel nut: removing
of large impurities by labour, removing of small impurities by de-stoner, netal detlection
(removal of metal item, if any), garbling, polishing in polishing machine, 3 stage cutting.
blowing of weightless particles by blower, gravity separation by automatic gravity separation

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Deli
RTOr cvance i
 machine, roasting in fire gas
rotary roaster, metal detection by magnetic mctal
packaging detectors and

(iv) Favored Supari': Following

processes are conducted on raw dried betel nut.
large impurities by labor, Removing of
removing
(removal of metal item, if any).
of small impurities
by de-stoner, metal deflection
sterilization to remove bacterial
garbling in automatic garblers,
polishing polishing machinc,
in
count, splitting (half) and/or 3 stage
weightless particles in blowers, gravity separation by cutting, blowing of
automatic gravity separation machine,
roasting in fire gas rotary roaster, flavoring in large size
of different automatic blenders with compound
variety such as spices, methanol, copra, cardamom and/or mulethi etc.
format, metal deflection by Magnetic Metal in liquid
increased due to Deflectors, sterilizing to kill bacteria count
handling in processing and packaging
(V) Boiled Supari': Following processes are conducted on raw
of large green fresh betel nut: removing
impurities by labor, boiling in water for 4 hours, removing the husk, boiling again for
2 hours,
drying by hot air, sterilizing, shorting, polishing and
packaging.
(vi) Boiled & Cut Supari':
Following processed are conducted on raw green fresh betel nut.
Removing of large impurities by labor, boiling in water for 4 hours,
again for 2 hours, drying by hot air, 3 stages cutting thereafter removing husk, boiling
the

and packaging. sterilizing, shorting, polishing

4. The applicant submitted that the main raw material for manufacturing of aforesaid six items
is Betel Nut, which falls under
8, Chapter
specifically heading 0802 90 00; it undergoes material
changes after processing addition/mixing of ingredients and become edible
preparations
approximately classifiable under heading 2106 90 30. The applicant has also referred to the
Supplementary Note 2 of Chapter 21 (Miscellaneous edible preparations) to justify that these
products are classifiable under the Sub-heading 2106 90 30. As per the said Supplementary Note:

2: "In this chapter "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."

Thus, according to the applicant, the final products to be imported being processed betel nut
product, not containing lime, katha or tobacco, by virtue of aforesaid chapter note are specifically
classifiable under Chapter 21.

5. After mentioning above details and processes involved in making of various types of Supari,
the question on which advance ruling has been sought is,

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D o
 The goods sought to be imported namely 'API Supari', "Chikni Supari', 'Flavored Supari',
Unflavored Supari', Boiled Supari' and Boiled & Cut Supari' being processed Betel Nut
products which do not contain lime, katha and tobacco but
containing other
materials/additives as food starch, spices, mulethi, flavors, essence (food grade)flavoring
such
etc. are
classifiable under the CTH 2106 90 30 of the First Schedule to the Customs Tariff Act, 1975. "
6. In
support of his contention, the applicant also relied on the
Authority for Advance Rulings (AAR): following rulings of the erstwhile
1) Ruling dated 07/08/2015 in the matter of M/s
Excellent Betel Nut Products Pvt. Ltd.
Nagpur,
ii) Ruling dated 31/03/2017 in the matter of M/s Isha Exim, Mumbai; and
ii) Ruling dated 31/03/2017 in the matter of
M/s Oliya Steel Private Limited, Kolkata.
7. I find that the
concerned Principal
submitted their comments on this
Commissioner/Commissioner of Customs have not
specific advance ruling application, despite being requested to.
However, the detailed opinion of the concerned
Principal Commissioner of Customs, NS-I and
ICD, Tughlakabad on the similar subject of classification of the
goods covered by the instant
application are available with this Authority. In view of the same, finding that the
valid in terms of the provisions of the Customs Act application is
and the CAAR Regulations, 2021,
heard the having
applicant, and recognizing the importance of timely pronouncement of rulings, I
to examine the question on merits. proceed

8. The
applicant has explained the processes involved in making six different products, as stated
in para 3 above. The applicant has contended that from the
processes mentioned above, it is clear
that though the end-products use betel nut/ areca nut as the main
raw material, in the
process
various other products are mixed and therefore, the products become a
preparation. Hence these
goods fall under the Chapter 21 and more particularly in CTH 21069030; and not under
8. The applicant has also referred to the
Chapter
Supplementary Note 2 of Chapter 21 to justify that these
products are classifiable under the Sub-heading 2106 90 30. As per the said Supplementary Note
2: "In this chapter "Betel Nut product known as
Supari" any preparation containing betel
means
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."
They have also placed significant reliance on the above cited ruling of the erstwhile AAR, New
Delhi in the case of M/s Excellent Betelnut Products Pvt. Ltd, M/s
Oliya Steel Private Limited,
Kolkata and M/s Isha Exim. I will revert to these rnulings, as also
rulings of CAAR, Mumbai and
my own rulings on the same question of classification later in this ruling.
9. On the basis of the submissions of the
applicant, along with the cited reference to the ruling
of the erstwhile AAR, there are two contending entries in the CTH for the aforesaid six goods, viz.

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 sub-heading 2106 90 30 and sub-heading 0802 80 90. Thereforc, would be useful to carefully
Consider the two competing tariff entries and the guidance relating thereto.

9.1 Chapter 8. which covers Edible fruit and uts: peel of citrus fruit or melons includes, inter
alia, the following Note 3: -

3. Dried fiuits or dried nuts of this Chapter may be partially rehydrated, or treated for the
following purposes:
. For additional preservation or stabilization for example, by moderate heat ireatment,
sulphuring. the additiom ofsorbic acid or potassium sorbate)
b. To improve or maintain their appearance (for example, by the addition of vegetable oil
or small quantities of ghucose syrup), provided that they retain the character of dried
fruit or dried nuts.
In the Chapter 8, areca nuts, whole, split, ground, and two residuary sub-headings are
accommodated under 0802 8010, 20, 30, 90, and 0802 9000,
respectively.
9.2 On the other hand, Chapter 21 covers miscellaneous edible preparations. The relevant
Supplementary Note 2 to the said Chapter lays down that,
In this Chapter "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, menthol.'

In this Chapter, the related entry, with respect to betel nuts, is the sub-heading 2106 9030, i.e.,
betel nut products known as supari.
10. Further, since the question relates to classification
of goods proposed to be imported, guidance
of the Harmonized Commodity Description and Coding System of the World Customs
Organization, to which India is a signatory, would be useful. It is seen that with respect to Chapter
8, the HSN prescribes the following as general guidelines: -

Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned. pulped.
grated, peeled or shelled.

The addition of small quantities of sugar does not affect the clasification of fruit in this
Chapter.'
.On perusal ofthe advance rulings given by the erstwhile AAR, New Delhi, which have been
referred to by the applicant, I find that case of M/s Excellent Betelnut Products Pvt. Ltd. do cover
the four goods, i.e., API supari, Chikni supari, Unflavored supari and Flavored supari, involved in
the present proceedings, and in both these rulings, the erstwhile AAR has concluded that the said
products meit classification undersub-heading 21069030. I find that in reaching this conclusion.
AAR has been of the view that on account of the positive language of the Supplementary Note 2
to Chapter 2 1, it is not necessary for betel nut (supari) to undergo a change of character for it to be
classified under Chapter 21. I also find that the AAR had considered the contention of the
department that the said four goods merit classification under Chapter 8, but rejected the same.

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Page -2,

s ,
 However, while doing so, the crstwhile AAR dId iOL ake any comment on the implications of
the Chapter Note 3 to Chapter 8 on the processes l raw betel nuts were subjected to obtain the
said four goods. Further, AAR was or the opinion unat the decision of the Hon'ble Supreme Court
in the case of M/s. Crane Betel Nut rowaer works TCported at 2007 (210) E.L.T. 171 (S.C.)) has
no application in the facts ot the cases DeTore tnc. It 1s my considercd opinion that in order to
arrive at the appropriate classiTICauon O ne said i u goods, all originating from common source
viz. raw green fresh betel nut, a more COmprehenSiVe view needs to be taken than in the aforesaid
M/s Excellent Betelnut case, as nas Decn done by AAR, Mumbai in the case of M/s. Samreen
International Pvt. Ltd. (Ruling No. CAARMum/ARCI3/202I dated 15th of March, 2021) and this
Authority in the case of M/s Dry Nut Enterprises (Ruling No. CAAR/Del/Dry Nut/01/2021 dated
16th March, 2021).
12. In view of the above, summarize the contending positions on the
now
advance ruling. Advance ruling nas question posed for
deen sought on classification of six different goods, each
known as "supari" in common traae parlance, albeit with
differentiator, viz. API, Chikni,
unflavored, flavored, boiled and boiled & cut. The basic raw material for each of the six goods is
raw betel nut, which is classifiable under Chapter 8, more
specifically sub-heading 080280. I also
note that Chapter 8 covers only edible nuts; inedible nuts and fruits
being excluded virtue of
Chapter Note 1; and that betel nuusupari are masticatory. However, these items byhave been
subjected to certain processes and added with certain materials, resulting in the question being
posed whether the said processes and mixing/addition of certain materials are substantive
to lead to the said six goods be considered as
enough
"preparation of betel nut" that would make them
classifiable under Chapter 21 by virtue of Supplementary note 2 of Chapter 21. It is the contention
of the applicant that due to the processes that the raw betel nuts have been
subjected to, the goods
have become preparations of betel nuts. Alternatively, whether the processes carried out on the
same for cleaning, cutting, preserving and making them more attractive to certain tastes/
preferences are too minor to fall short of rendering them as preparations of betel nuts. Further, it
would be inadvisable and inappropriate to approach the issue of classification of the said six
goods
solely with the prism of the positive nature of Supplementary Note 2 to Chapter 21.

13. Before I proceed to answer the question on which advance ruling has been sought, I wish to
clarify that on careful consideration of the legal construct and specific provisions of section 28-J
(1) ofthe Customs Act, 1962, I am of the view that the task before me as the Customs Authority
for Advance Rulings cannot be to pass rulings on questions ofclassification of goods simply based
on the previous ruling of AAR, even as I readily acknowledge the persuasive value of the same.
However, in arriving at this ruling, I also rely on other judgments and ruling of Customs Authority
for Advance Rulings, Mumbai in M/s Samreen International Pvt. Ltd, Chennai and my own ruling
in the case of M/s Dry Nut Enterprises.
14. To answer the posed question, I consider the five goods, namely API supari, Chikni supari.
unflavored supari, boiled supari and boiled & cut supari together. In these cases, one set of
processes are found to be intended for cleaning; the second set for enhancing preservation; and
third set for enhancing appearance or presentation, in addition to cutting. Addition of starch would
be included under such process. I find that these processes are clearly covered by the Chapter Note
to Chapter 8 as well as the HSN, I find thatin the instant case, betel nuts atter being boiled are
dried and this fact per se would not exclude the end-products from the scope of "dried nuts".
Further, it is equally obvious to me that boiling or mere addition of certain additives for the limited

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 se does not result in
purpose of enhancing preservation or appearance or ease of consumption per
obtaining a preparation of betel nut. Speaking more Benerally, in view of the design of the Schedule
to the CTA, HSN and plethora ofjudgements, besides common understanding and parlance, every
irreversible process does not result in obtaining a new product with a distinct classification even
at the eight or ten-digit level; and every irreversible process does not result in coming into being
of a "preparation of the raw material". Therefore, I conclude that the processes to which raw betel
boiled supari and
nuts have been subjected to obtain API supari, Chikni supari, unflavored supari,
boiled & cut supari are squarely in the nature of processes referred to in the Chapter Note 3 to
betel nuts retain the
Chapter 8 and HSN Note. Therefore, at the end of the said processes, the
character of betel nut and do not qualify to be considered as "preparations" of betel nut, which is
sine qua non for a good to be classifiable under Chapter 21.

15. In the case of flavored supari, the question to be answered is whether the addition of special

flavoring agents would render the betel nuts into preparations of betel nuts, classifiable under
Chapter 21. In this regard, the judgment of the Hon'ble Supreme Court of India in the case of M/s
Crane Betel Nut Powder Works and of the CESTAT, Chennai in the case of M/s Azam Laminators
nut into small
Pvt. Ltd. [where scented betel nut was being manufactured by cracking of dried betel
pieces, and thereafter, gently heating it with addition of vanaspati oil, sweetening and flavoring
as Nizam Pakku (in Tamil)/Betel Nut (in English),
the
agents and marketed in small pouches
Hon'ble CESTAT held the resultant product classifiable under sub-heading 08029019 of Central
are relevant. Put
Excise Tariff and not under 21069030 as supari for period after 07.07.2009]
do not
simply, these decisions clearly imply that addition of flavoring agents remain change the character
betel nut and not
of the good, meaning in the present case betel nut would continue
to
become preparation of betel nut.

16. In view of the aforesaid discussions, I have reached the conclusion that all the six goods placed
before me for consideration, i.e., API supari, Chikni supari, boiled supari, boiled & cut supari,
under Chapter 8 of the First Schedule
unflavored supari, and flavored supari, merit classification
to the Customs Tariff Act, and more precisely,
under the heading 0802. This is so in view of the
nuts have been subjected to obtain the said
fact that the processes to which raw green fresh betel
mentioned in Note 3 to Chapter 8, and have not
six goods are squarely in the nature of processes
Hon'ble Supreme Court in
materially changed the essential character of betel nuts, as held by the
the M/s Crane Betel Nuts case. Further, the said six goods are not classifiable under sub-heading
have not attained the character of
2106 9030, as contended by the applicant, since they
fora good to be so considered.
"preparations" of betel nut, which is sine qua non

17. I rule accordingly.

Date: 21.10.2021

(Vijay Singh Chauhan)

New Delhi
Customs Authority for Advance Rulings,

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Page 7
 C. No. VIll/(CAAR)Delhi/Vaibhav/45/2021 Dated: 21.10.2021

1. M/s Vaibhav Enterprises, WZ-32A, Shop No.1, Asalatpur, Janakpuri, New Delhi-110058
2. Principal Commissioner of Customs, Chennai II, Customs House,60, Rajaji Salai, Chennai-
660001
3. Principal Commissioner of Customs (Preventive), 55-17-3, C-14, 2nd Road, Industrial Estate,
Auto Nagar, Vijaywada-520007
4. Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin, Tamil Nadu-
628004
5. The Customs Authority for Advance Rulings, Mumbai, New Custom House, Ballard Estate,
Mumbai-400001
6. The Principal Chief Commissioner of Customs, Delhi Customs Zone, New Custom House,
IGI Airport Complex, New Delhi-110037
7. The Chief Commissioner (AR), Customs Excise & Service Tax Appellate Tribunal
(CESTAT), West Block-2,Wing-2, R.K. Puram, New Delhi-1 10066
8. The Member (L & J), CBIC, North Block, New Delhi
9. Guard file
Je Webmaster, 'cbic.gov.in'
241

(Anamika Singh)
Secretary,
Customs Authority for Advance Rulings, New Delhi

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oms Delhi

0y For Advance Raiogs,