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CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT No. I Customs Appeal No. 40433 of 2025 (Arising out of Order-in-Appeal SEAPORT C.Cus.II No. 64/2025 dated 08.01.2025 passed by the Commissioner of Customs (Appeals-II), No. 60, Rajaji Salai, Custom House, Chennai – 600 001)

Commissioner of Customs ...Appellant Chennai II Commissionerate, No. 60, Rajaji Salai, Custom House, Chennai – 600 001.

Versus M/s. Guru Krupa Traders ...Respondent Flat No. 302, Shri Harpal Singh Ninak Ashtvinayak Apartment, Nari Road, Kalpana Nagar, Nagpur, Maharashtra – 440 026.

APPEARANCE:

For the Appellant : Ms. O.M. Reena, Authorised Representative For the Respondent : Mr. B. Satish Sundar, Advocate CORAM:

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

HON’BLE MR. AJAYAN T.V., MEMBER (JUDICIAL)

FINAL ORDER No. 41119 / 2026 DATE OF HEARING : 07.05.2026 DATE OF DECISION : 28.10.2026 Per Mr. VASA SESHAGIRI RAO The present appeal has been filed by the Revenue assailing Order-in-Appeal No. Seaport C.Cus.II No.64/2025 dated 08.01.2025, whereby the learned Commissioner (Appeals-II), Chennai, set aside Order-in-Original No.106410/2024 dated 24.04.2024 passed by the Additional Commissioner of Customs, Group I. The controversy in the present appeal relates principally to the classification of the goods imported by the respondent and declared as “Betel Nut Product Known as Supari (Unflavoured Supari)”. While the respondent declared the goods under CTH 2106 90 30, the adjudicating authority classified the same under CTH 0802 80 20, as split areca nuts. The Revenue contends that the learned Commissioner (Appeals) erred in accepting the classification under Chapter 21 notwithstanding the physical examination of the goods and the CRCL reports describing the samples as split pieces of betel nuts. The respondent filed four Bills of Entry bearing Nos. 7666971, 7666975, 7666976 and 7666978, all dated 27.02.2022, covering approximately 432.08 MTs of goods declared as “Betel Nut Product Known as Supari (Unflavoured Supari)” and classified under CTH 2106 90 30. The consignments were subjected to examination and representative samples were drawn and forwarded for testing. The CRCL reports recorded the samples as being in the form of split pieces of betel nuts, not fully dehusked and containing fibre, and further recorded that the samples did not contain lime, katha or tobacco. Proceedings were thereafter initiated proposing, inter alia, rejection of the declared classification and reclassification of the goods under CTH 0802 80 20, redetermination of assessable value, consequential reassessment of duty and confiscation under Section 111(d), 111(m) and 111(o) of the Customs Act,1962 and penalties under Section 112/114AA of the Customs Act, 1962.

1.1 The Ld. Additional Commissioner of Customs, Group I, vide Order-in-Original No.106410/2024 dated 24.04.2024, confirmed the proposals and imposed, inter alia, redemption fine of Rs.2 crores, penalty of Rs.1 crore under Section 112(a), penalty of Rs.50 lakhs under Section 114AA and penalty of Rs.4 lakhs under Section 117 of the Customs Act, 1962.On appeal, the learned Commissioner (Appeals), relying principally upon Supplementary Note 2 to Chapter 21and the judicial decisions relied upon by the respondent, set aside the adjudication order and accepted classification under CTH 2106 90 30. Aggrieved by the said order, the Revenue preferred an appeal before this Tribunal, and hence the present appeal.

1.2 The issues examined in this order are listed in the index below: -

Submissions of the Revenue

2. The Ld. Authorized Representative, Smt. O.M. Reena, appearing on behalf of the Revenue reiterated the grounds of appeal and submitted that the learned Commissioner (Appeals) had erred in setting aside the Order- in-Original and accepting the classification of the impugned goods under CTI 2106 90 30.

2.1 She has submitted that the advance ruling relied upon by the learned