Canned Pineapple Slices Classifiable Under Customs Tariff Heading No. 0804, Exemption Not Applicable: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that canned pineapple slices’ are classifiable under Customs Tariff Heading No. 0804.

The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that there was confusion in the department itself regarding the classification of canned sliced pineapples. It has been submitted that there is a ruling dated September 17, 2018, by the AAAR in their own group firm, M/s Bharat Agro, wherein it was held that canned pineapple slices are classifiable under CTH 0811. The Deputy Commissioner passed an order of reassessment on January 31, 2019, in which the canned pineapple slices were reclassified from CTH 20082000 to CTH 0811.

Intelligence was received that the appellant/assessee was importing "canned pineapple slices" from the Philippines and Thailand and claiming exemption from the basic customs duty available to imports from ASEAN countries in terms of Customs Notification No. 46/2011-Cus dated June 1, 2011.

However, it was alleged that the said 'Canned Pineapple Slices’ are classifiable under Customs Tariff Heading No. 0804 3000, and consequently, the benefits of Exemption Notification No. 46/2011-Cus dated June 1, 2011, as amended, are not available.

The premises of the appellant were searched. It was found that the assessee had been importing pineapple for over 2 years, and he also submitted the import data (i.e., invoices, packing list, bill of entry) for the last 2 years.

As per the explanatory notes, it is noted that for any product to be classified under CTH 0804, it has to be fresh or dried. For fruits to be classified under CTH 0811, the said product has to be "frozen," as elaborated above.

The product, canned pineapple slices, being imported by the appellant is not frozen. It is amply clear from the statement of the director that the fresh fruits (pineapples) are received, graded, washed, peeled, cut, cored, sliced, and then put in sterile cans (sterilized by passing under steam). Boiling hot sugar syrup is added to balance the natural sugar content of the fruit and prevent it from draining out. Sugar is added to maintain the taste and palatability of the fruit, and it is not a preservative. The hot syrup (water and sugar pre-mixed) is heated to a boiling point to kill any ambient bacteria that may be present and to create a vacuum in the cans, thus completing the preservation process due to the isolation from atmospheric contact and vacuum. Thereafter, such cans are cooled and released to the market. Nowhere is it stated that the fruits undergo any process of chilling or freezing. The general notes to the HSN explanatory notes of the chapter define what refers to frozen.

The tribunal held that the classification of the canned pineapple slices would have to be decided as per the HSN explanatory notes and would therefore be appropriately classifiable under CTH 0804 only.

“We hold that the classification of the canned pineapple slices would be CTH 0804. However, the demand for differential duty is limited to the normal period only. The interest would accordingly be reduced proportionately. The penalty under Section 114A is set aside. The impugned order is modified to the extent indicated above, and the appeal is partly allowed,” the court said.

Counsel For Appellant: Anup Kumar Srivastava

Counsel For Respondent: Girijesh Kumar

Case Title: Holyland Marketing Pvt Ltd Versus Commissioner Of Customs (Import) Icd, Tughlakabad, New Delhi

Case No.: Customs Appeal No. 54708 Of 2023

Click Here To Read The Order