2003 (3) TMI 563 - AT - Central Excise

Summary

Issues involved:
Interpretation of Notification No. 16/98-Central Excise (N.T.) regarding the applicability of tariff values to Pan Masala manufactured without tobacco.

Detailed Analysis:

1. Issue of Applicability of Tariff Values:
The central issue in this appeal was whether the Tariff Values set under Notification No. 16/98-Central Excise (N.T.) applied to Pan Masala produced by the appellant without tobacco. The appellant argued that their product, not containing tobacco, fell under Heading 21.06 of the Tariff and was covered by the Notification. They contended that the Revenue's interpretation of Para 2 of the Notification, excluding products without tobacco, was erroneous and would render the Notification redundant. The appellant emphasized that Para 2 should only exclude Pan Masala with less than 10% betel-nut content and no tobacco. They cited legal precedent to support their interpretation.

2. Revenue's Counter-Argument:
The Senior Departmental Representative for the Revenue countered that the tariff values were not applicable to goods with less than 10% betel-nut and no tobacco, as per the Notification. They argued that all conditions in the Notification must be met for the tariff values to apply. The Revenue contended that the appellant's interpretation would render part of the Notification ineffective, which was impermissible.

3. Judgment and Interpretation of Notification:
The Tribunal analyzed the Notification and noted the historical changes in the Central Excise Tariff regarding Pan Masala and tobacco content. The Tribunal observed that the Notification was issued when Pan Masala could contain tobacco under Heading 21.06. However, subsequent amendments separated Pan Masala with tobacco under a different sub-heading. Therefore, the Tribunal concluded that the Notification applied only to Pan Masala with over 10% betel-nut and no tobacco, as per Para 2. Since the appellant's product did not contain any tobacco, the Notification was deemed inapplicable. The Tribunal upheld the Central Excise duty demand but set aside the penalty imposed on the appellant, considering their compliance with filing declarations and duty payments.

4. Conclusion:
The Tribunal disposed of the appeal by affirming the duty demand while relieving the appellant of the penalty. The judgment clarified the application of the Notification in light of the changes in the Central Excise Tariff, emphasizing the specific criteria for tariff values to be applicable to Pan Masala products without tobacco.