2008 (8) TMI 685 - AT - Central Excise

Summary

Issues: Classification of Branded Chewing Tobacco under Central Excise Tariff; Applicability of duty under Section 4A of the Central Excise Act; Dispute regarding classification under tariff sub-headings 2403 99 10 and 2403 99 30; Interpretation of tariff entries for Chewing Tobacco and Zarda Scented Tobacco.

Classification of Branded Chewing Tobacco: The judgment revolves around the classification of Branded Chewing Tobacco under the Central Excise Tariff. The impugned order confirmed a duty demand based on the classification of the product under sub-heading 2403 99 30, as it was not notified for assessment under Section 4A of the Central Excise Act. The applicant argued that their product, marketed as Gopal Deluxe Flavoured Chewing Tobacco, should be classified under sub-heading 2403 99 10. They contended that before and after the disputed period, there were no objections raised by the revenue regarding this classification.

Dispute over Classification: The revenue's position was that a new tariff entry for "Zarda Scented Tobacco" was introduced, which included chewing tobacco. They argued that the product in question should be classified as Zarda scented tobacco under sub-heading 2403 99 30. The revenue relied on the adjudicating authority's observations that chewing tobacco is known in the market as Zarda. However, the applicant had consistently classified their product under sub-heading 2403 99 10 as chewing tobacco, marketed as Gopal Deluxe Flavoured Chewing Tobacco.

Interpretation of Tariff Entries: The tribunal analyzed the relevant tariff entries, noting that chewing tobacco is classified under 2403 99 10, while Zarda Scented Tobacco is separately classified under 2403 99 30. The absence of the term "Chewing" in the entry for Zarda Scented Tobacco supported the applicant's contention. Therefore, prima facie, the tribunal found merit in the applicant's classification under sub-heading 2403 99 10. As a result, the tribunal waived the pre-deposit of duty and penalties, staying the recovery during the appeal's pendency. The appeal was scheduled for regular hearing based on the revenue involved.

This detailed analysis of the judgment highlights the key issues of classification under the Central Excise Tariff, the applicability of duty under the Central Excise Act, the dispute over tariff sub-headings, and the interpretation of relevant entries for Chewing Tobacco and Zarda Scented Tobacco.