Provisionally preserved areca nuts fit for human consumption classify under tariff heading 0802, not 0812.

(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

15.05.2023.

2. When the appeal was admitted on 17.10.2023, this Court formulated the following substantial questions of law:

“(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 ba 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 2/4 https://www.mhc.tn.gov.in/judis provisionally preserved but unsuitable in that state for immediate consumption more particularly sub-heading under 0812 9090 – other under the Customs Tariff Act.?”

3. 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.

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 sub heading 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 the sample is

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