2004 (3) TMI 143 - AT - Central Excise

Summary

Issues:
Classification of Gutka/Pan Masala under Central Excise Tariff Act - Heading 21.06 or Heading 24.04.

Analysis:
In the appeal by M/s. Kuber Tobacco Products P. Ltd., the main issue was the classification of Gutka/Pan Masala under the Central Excise Tariff Act. The appellant had initially classified the product under Heading 21.06 but was directed by the Revenue to reclassify it under Heading 24.04 following a Supreme Court decision. The Revenue issued show cause notices demanding duty under Heading 21.06 for a specific period. The appellant argued that the Supreme Court's decision in the case of Kothari Products Ltd. had classified Gutka as a tobacco product under Heading 24.04, making it binding. The Revenue contended that the Tariff was amended later, and during the relevant period, the classification was under Heading 21.06.

The Tribunal analyzed the arguments presented by both sides. While acknowledging that Pan Masala containing tobacco was classified under Heading 21.06 during the period in question, the Tribunal emphasized the Supreme Court's decision in the Kothari Products case. The Supreme Court had ruled that Gutka is a tobacco product falling under Heading 24.04 and cannot be considered Pan Masala under Heading 21.06. The Tribunal highlighted that the Supreme Court's interpretation is binding as per Article 141 of the Constitution, making it the law of the land. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, confirming the classification under Heading 24.04.

This judgment clarifies the importance of judicial decisions in interpreting legal provisions and the binding nature of Supreme Court rulings on subsequent classifications under the Central Excise Tariff Act. It underscores the significance of adherence to legal precedents and the hierarchy of courts in determining the correct classification of goods for excise duty purposes.