Provisionally preserved areca nuts, safe for consumption post-treatment, classified under tariff heading 0802, not 0812.

Headnote:The Customs Act, 1962, particularly Sections 28KA, 28-I(2)(b), and tariff headings 0802 and 0812 under the Customs Tariff Act, govern classification of imported goods. The appellant challenged an Advance Ruling classifying provisionally processed areca nuts under heading 0812 (provisionally preserved fruits and nuts unsuitable for immediate consumption). The court examined whether such nuts, treated for preservation and stabilization while retaining dried nut character, fall under 0802 (edible nuts, including dried after rehydration) or 0812. Findings: Nuts approved safe for consumption per lab reports, thus classifiable under 0802.

Issues: Whether the Advance Ruling violated Section 28-I(2)(b) proviso; correct classification of provisionally processed areca nuts under 0802 or 0812, considering Chapter Notes allowing treatments for preservation without altering dried nut status. Ratio: Supreme Court in relevant precedent confirmed Tribunal's classification of similar sulphur-preserved split betel nuts under 0802, as lab tests deemed them safe and fit for consumption, rejecting Rule 3 (last heading prevails) and HS clarifications inapplicable to goods not packed for industry use (para 6-7). Appeal allowed; impugned Advance Ruling set aside; classification under tariff item 0802 upheld in favour of department.

Table of Content
1. appeal challenges advance ruling classification under customs act. (Para 1 , 2)
2. substantial questions on section 28-i violation and tariff classification. (Para 3)
3. issue: areca nuts under 0802 or 0812. (Para 4 , 5)
4. precedent classifies preserved nuts under 0802 per lab safety. (Para 6)
5. nuts fall under 0802; appeal allowed. (Para 7)

(Judgment of the Court was delivered by N.ANAND VENKATESH, J.)

The appeal has been filed under Section 28 KA of the Customs Act 1962 challenging the order passed in Advance Ruling Number dated

22.02.2024.

2. Notice was ordered to the respondent and notice has also been served on the respondent and though the name of the respondent is printed in the cause list, there is no appearance either in person or through counsel.

3. The following substantial questions of law arises in this appeal:

“(i) Whether the impugned order passed by the Advance Ruling Authority is bad in law for violating the restriction imposed under clause (b) of the proviso to subsection (2) of section 28-I of “The Customs Act, 1962” in the light of the judgment delivered by the apex court in confirming the tribunal order in Krishna & Co., Vs. Commr. Of C.E., cus., & S.T., Bolpur 2015(321) E.L.T.530 (Tri.-

Kolkata) & 2015 (321) E.L.T.A205 (S.C.)?

(ii) Whether provisionally processed areca nuts proposed to be imported by the respondent will fall under the classification prescribed under Chapter heading 8 – Edible fruit and nuts; peel of citrus fruit or melons more particularly heading 080280 – Areca nuts; under the several subheadings of 0803 8010, 0802 8020, 0802 8030 and 0802 8090 respectfully describing areca nut as whole, split, ground, and other and particularly when the Chapter notes specifically provide that the said Chapter will include dried nuts as well, even after rehydration and other treatment for the purpose of additional preservation or stabilization like by way of moderate heat treatment, etc., and also for the purpose of improving and maintaining their appearance like by way of adding vegetable oils, small quantities of glucose syrup for the purpose of retaining the character of dried nut or it will fall under Chapter 0812-Fruits and nuts provisionally preserved but unsuitable in that state for immediate consumption more particularly sub-heading under 0812 9090 – other under the Customs Tariff Act.?”

4. We heard the learned Senior Standing counsel appearing on behalf of the appellant and carefully considered the materials available on record.

5. The main issue that is involved in the present case is as to whether the provisionally preserved Arecanut that was proposed to be imported by the respondent will fall under 0812 or 0802.

6. The learned Senior Standing counsel brought to our notice the judgment of the Apex Court in S.Krishna & Co v. Commissioner of Central Excise, Customs and Service Tax reported in 2015 (321) ELT A205(SC), which in turn confirmed the order passed in S.Krishna & Co v. Commissioner of Central Excise, Customs and Service Tax reported in 2015 (321) ELT 530(Tri-Kolkata). The relevant portions in the order passed by the Tribunal are extracted hereunder:

“14. The ld. Advocate has submitted that in this case split betel nuts are preserved by Sulphur Dioxide which is class II preservative and requires various processing after the goods were imported to make them suitable for human consumption and therefore being unsuitable in that state for immediate consumption they are correctly classifiable under chapter 0812. As against this we find that the various lest reports mentioned as under :-

Plant Quarantine Lidianatory in its report dated

3-12-2012, and 27-11-2012 reported that recommended for release (for consumption purpose only)

Central Food laboratory in its report dated 10-12-2012 mentioned that "SO present within limit approved for nuts and opined

2 the sample is found not adulterated in respect of tests mentioned above". Further against a specific query by the department 27-1-2014 clarif

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