Roasted Betel/Areca Nut classifiable as other Roasted Nuts & Seeds under Customs Tariff Act: Madras HC upholds Decision of CAAR [Read Order]

The Madras High Court in a recent decision observed that Roasted Betel/Areca Nut classifiable as other Roasted Nuts & Seeds under Customs Tariff Act, thereby upholding the decision of the Customs Authority for Advance Rulings (CAAR).

The Civil Miscellaneous Appeals are filed by the Revenue challenging the rulings of the Customs Authority for Advance Rulings (CAAR) that “roasted areca nut / betel nut (whole/cut/split)” merit classification under Customs Tariff Heading (“CTH”), 2008, more particularly, sub heading 2008 19 20 of the First Schedule to the Customs Tariff Act, 1975.

The respondents, M/s.Shahnaz Commodities International P. Ltd, filed applications for Advance Ruling in CAAR-1, seeking ruling on the classification of “roasted areca nuts / betel nuts”. The respondents also submitted applications in CAAR-1 on the same issue pertaining to some other jurisdictional Commissionerates of Customs.

The Advance Rulings Authority held that the processes mentioned in Chapter 8 would not include roasting and found that the distinction between drying and roasting, ought to be borne in mind while determining, whether areca nut would be covered under Chapter 0802 80 or 2008 19 20 and reliance was also placed on the HSN Explanatory Notes in support of its conclusion that roasted betel nuts would be covered under CTH 2008 and more specifically under Sub Heading 2008 19 20 of the First Schedule to CTH.

The Counsel for the appellants contended that impugned ruling failed to appreciate and apply the Chapter Notes contained in Chapters 8 and 20, which would clearly show that the areca nut in question cannot be brought under Chapter 20, in view of the express exclusion contained in Note 1(a) to Chapter 20. CTH 2008 covers only such of those goods which are not specified elsewhere, areca nut having been mentioned / specified in CTH 0802 80, is excluded from being classified under CTH 2008 1920.

A Division Bench of Justices R Mahadevan and Mohammed Shaffiq observed that “Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH. Roasted betel/areca nut having been specifically classified under CTH 2008 19 20, the attempt to classify under CTH 08 02 80 would fall foul of the settled rule of construction that specific entry would prevail over general entry.”

“CTH 2008 19 20 is a special entry covering nuts subject to the process of roasting, when contrasted with CTH 08 02 90 which covers dried nuts. Having come to the conclusion that the classification of areca nut is made on the basis of the process which it is subject to with a distinction between dried and roasted nut being maintained, we would think that CTH 2008 19 20 which covers roasted nuts including areca nut is a specific entry when contrasted with the entries/ items covering nuts under CTH 08” the Court noted.

To Read the full text of the Order CLICK HERE

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