2018 (10) TMI 395 - AT - Central Excise

Classification of goods - jarda scented tobacco - Chewing Tobacco - whether the Chewing tobacco classifiable under Heading No. 24039910 and jarda scented tobacco under Heading No. 24039930? - Held that - The issue is not contentious in view of the test report submitted by the CRCL which is the recognised departmental authority for testing the products - The finding of the lower adjudicating authority that it might contain the scent in the product is merely on the basis of presumption and surmise without any facts therein. Reliance placed in the case of M/S TARA CHAND NARESH CHAND VERSUS CCE ST, ALWAR 2018 (4) TMI 221 - CESTAT NEW DELHI , where it was held that The product classified as Chewing Tobacco‟ under Tariff Heading No. 24039910. Appeal allowed - decided in favor of appellant.

Summary

Issues involved: Classification of product as chewing tobacco or jarda scented tobacco under Central Excise Tariff Act, 1985.

Analysis:
1. The appeal was against the Order-in-Appeal upholding the rejection of the appellant's claim by the lower adjudicating authority. The issue revolved around the classification of the product manufactured by the appellant as either chewing tobacco or jarda scented tobacco under the Central Excise Tariff Act, 1985.

2. The appellant, engaged in manufacturing chewing tobacco, was paying duty under specific provisions. The Commissioner (Appeals) passed a common order for related appeals. The dispute was about the proper classification of the product, specifically whether it falls under Heading No. 24039930 of CETA, 1985. Samples were tested by CRCL to determine the composition, which mainly consisted of tobacco and lime.

3. Despite the test reports, the department was not satisfied and appealed to CRCL for reclassification. However, CRCL's report confirmed the product as chewing tobacco, not jarda scented tobacco. The lower authorities did not agree with CRCL's findings, stating that the report lacked evidence of scent in the product, leading to the classification dispute.

4. The appellate authority and primary adjudicating authority disagreed with the testing authorities' conclusions, emphasizing the absence of findings on scent in the reports. They argued that the product should be classified as jarda scented tobacco, not chewing tobacco. The Department's position was supported by the ld. DR.

5. The Tribunal reviewed the submissions and records, focusing on the classification issue. Relying on CRCL's test reports, the Tribunal found no basis for the product to be classified as jarda scented tobacco. The lower authorities' presumption of scent in the product was deemed unfounded. The Tribunal's decision aligned with CRCL's findings, affirming the product as chewing tobacco.

6. Referring to a similar case, the Tribunal noted the Department's intention to appeal but highlighted the refund granted to the appellant in that case. Drawing parallels, the Tribunal directed similar treatment for the present appellants, allowing the appeal and ordering refunds within 45 days with appropriate interest.

This comprehensive analysis addresses the classification issue and the Tribunal's decision based on the evidence and legal interpretations presented during the proceedings.