2021 (5) TMI 41 - HC - Central Excise

Excisability - repacking the tobacco products by scenting - process amounting to manufacture or not - HELD THAT - In the case of Crane Betel Nut Powder Works vs. Commissioner 2007 (3) TMI 6 - SUPREME COURT , the Hon'ble Supreme Court held that manufacture and crushing betel nuts into smaller pieces and sweetening the same with essential/non-essential oils, menthol, sweetening agencies etc., did not result in manufacture of a new and distinct product having a different character and use as end product continues to retain its original character though in a modified form - the facts are entirely different and as far as the judgment of the Hon'ble Supreme Court is concerned, the Hon'ble Supreme Court held that if the original character is not modified, then it need not be considered as a manufacturing, but in the present case such facts are to be decided only through complete adjudication by the competent authority and by the appellate authority. High Court is not an Expert Body in order to form an opinion with regard to the manufacturing of a product or otherwise. Experts in the Department must conduct an inspection and form an opinion, whether it is a manufacture of product or the raw material is just repacked and sold to the end user. The said nature of proceedings cannot be adjudicated before the High Court, as the scope of the writ proceedings are limited - Prima facie paragraph 13 of the affidavit reveals that some processes are involved in respect of the products sold by the writ petitioner to the end user in the society. All such details are to be adjudicated with reference to the product sold to the end user, the raw materials used and the processes undertook in this regard. The petitioner is at liberty to exhaust the appellate remedy in the manner known to law - Petition disposed off.

Summary

Issues:
1. Whether the product "chewing tobacco" manufactured by the petitioner falls within the ambit of excisable products under the Central Excise Act, 1944.
2. Whether the process undertaken by the petitioner constitutes manufacturing or mere repacking of tobacco products.
3. Whether the judgments cited by the petitioner are applicable to the current case.
4. Whether the relief sought for in the writ petitions can be granted by the High Court or should be pursued through appropriate channels.

Analysis:
1. The petitioner argued that their process of repacking tobacco does not involve manufacturing as defined under the Central Excise Act. They purchase raw tobacco, re-pack it, and sell it without converting it into a different product. The petitioner contended that the actions taken by the respondents are unjustified.
2. The Senior Panel Counsel for the first respondent disputed the petitioner's claim, stating that the nature of manufacturing should be determined through adjudication based on evidence and documents. The Tribunal had closed the appeals but allowed parties to file applications for reopening based on changed circumstances. The Court advised the petitioner to approach the Tribunal for further adjudication.
3. The petitioner cited a judgment from the Madurai Bench of Madras High Court and argued that their process of repacking tobacco is similar to the case referenced. However, the Court emphasized the need for detailed adjudication by the competent authority to determine the nature of the process involved in the petitioner's case.
4. The Court highlighted that it is not an expert body to determine manufacturing processes and that such matters should be handled by experts in the Department. The Court advised the petitioner to exhaust appellate remedies and approach the Tribunal for further adjudication. The Court directed the petitioner to file appropriate applications for refunding central excise duty and pursue pending issues through the Tribunal.

In conclusion, the High Court disposed of all writ petitions, advising the petitioner to pursue further adjudication through the appropriate channels and exhaust appellate remedies available. The Court emphasized the need for detailed examination by the competent authority to determine the nature of the manufacturing process involved in the petitioner's case.