Customs Tariff Act, 1975 – "Anardana" to Be Classified Under Heading 1209 of Tariff Entries - Supreme Court
A Supreme Court Bench of Justice Sanjiv Khanna and Justice Bela M Trivedi heard Appeals which raised a common question - should dried pomegranate seeds, domestically known as "anardana", be classified under Heading 0813 of the Tariff entries issued under the Customs Tariff Act, 1975, or under Heading 1209?
To that end, the Bench held that "we accept the finding of fact recorded by the CESTAT that 'anardana' is a dried product of local 'daru' or wild pomegranate, which grows in mid hill conditions and which fruit in its fresh form is different from the pomegranate included in clause 7 to Heading 08.10, as this wild pomegranate is not consumed as a fresh fruit".
Mr Mukesh Kumar Maroria and Mr Rupesh Kumar appeared before the Court.
The Bench referred to the Harmonised System of Nomenclature, developed by the World Customs Organisation, which has been adopted by Indian by way of the Customs Tariff Act, 1975.
The Bench took on record the well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning.
It was noted that the title of the Heading 0813 itself notes that it is not applicable to those fruits, which when fresh are covered under the Headings 08.01 to 08.06. It was further noted that if the dried fruits are related to the fresh fruits classified under the Headings 08.07 to 08.10, they would fall under the category of "other fruits" in Heading 0813.40.
The Court observed that pomegranates are expressly included in Clause 7 to the Explanatory Notes to sub-heading 0810.90, and therefore, it could be said that dried pomegranate would fall under sub-heading 0813.40.
However, the Court proceeded to make an important observation about the uniqueness of pomegranates. It held that "the finding of the CESTAT is that wild pomegranates from which 'anardana' is made are different from the pomegranate fruit. This finding of fact is supported by considerable literature which states that 'anardana' is prepared by dehydrating the arils of wild pomegranates, and not from the pomegranate which is eaten as a fresh fruit. The conventional utilization of the wild pomegranate fruit lies in drying the seeds along with pulp to make 'anardana'. The wild pomegranate fruit is widely found on the hilly slopes of the Himalayas. It contains high acid content along with other quality characteristics, which distinguishes it from the pomegranate fruit which is consumed as a fresh fruit. The dried wild pomegranate arils have a distinct tart and sour flavour, owing to the high acid content, which gives it the commercial value".
Therefore, the Court affirmed that "anardana" is distinct from the pomegranate which is included in Clause 7 to Heading 08.10 and advised the Revenue to examine the data and ascertain the views of the trade associations on classification of 'anardana' before taking any policy decision. It held that in the interim the classification determined by the CESTAT would operate in order to avoid confusion and further litigation.