1985 (9) TMI 203 - AT - Central Excise

Issues Involved:
1. Classification of the product 'Keora Golap Paner Dokta' under the Central Excise Tariff.
2. Effective date for the classification of the product.
3. Refund claim for the period from 26-12-1981 to 23-6-1983.

Detailed Analysis:

1. Classification of the Product 'Keora Golap Paner Dokta':

The central issue in both appeals is whether 'Keora Golap Paner Dokta' should be classified under item 4-II(5) 'Chewing Tobacco' or under residuary item 68 of the Central Excise Tariff. The product 'Dokta' was explicitly included in item 4-II(5) by the Finance Bill of 1984 effective from 1-3-1984, but the dispute pertains to the period before this date.

The appellants described the manufacturing process of 'Dokta' involving tobacco leaves, various spices, and oils, resulting in a product used with Pan (Betel leaves) as Paner Dokta or Pan Masala (mouth flavor). They argued that their product, with only 38.0% tobacco content, was a Paan Masala or Mouth Freshener, not chewing tobacco. They cited technical and judicial authorities distinguishing 'Dokta' from chewing tobacco, emphasizing that chewing tobacco must have tobacco as its principal ingredient.

The department's representative contested the methodology of the National Test House, Alipore, Calcutta, which determined the tobacco content. However, the department did not provide an alternative method or evidence to establish the classification under item 4-II(5).

The Tribunal concluded that 'Dokta' containing around 38% tobacco could not be considered chewing tobacco before 1-3-1984. The Board's own advices and judicial authorities consistently held that a product must have tobacco as its main ingredient to be classified as chewing tobacco. Thus, 'Dokta' should be assessed under residuary item 68 of the tariff for the period prior to 1-3-1984.

2. Effective Date for the Classification of the Product:

The appellants argued that the classification should be effective from 12-9-1975, the date of the first tariff advice, and not from 3-9-1981 as determined by the Assistant Collector. They contended that the appeal process should not worsen their position, and the remand order should not negate the benefit accrued from the Assistant Collector's first order.

However, the Tribunal noted that the precise period for which the refund should be granted could not be determined from the facts on record. The revised classification list and the protest letter mentioned by the appellants were not on record. Therefore, the Tribunal left the determination of the refund period to the Assistant Collector.

3. Refund Claim for the Period from 26-12-1981 to 23-6-1983:

The appellants filed a refund claim for Rs. 4,58,089.91 for the period 26-12-1981 to 23-6-1983, following the Assistant Collector's order. They accepted that any refund would be subject to the limitation contained in Section 11B of the Central Excises and Salt Act, 1944.

The Tribunal ordered the classification of 'Dokta' under item 68 for the period prior to 1-3-1984 and directed that the consequential refund, subject to the limitation of Section 11B, be granted to the appellants. The precise period for the refund was left to be determined by the Assistant Collector based on the available records.

Conclusion:

The Tribunal allowed the appeals, ordering the classification of 'Dokta' under item 68 for the period prior to 1-3-1984 and directed the consequential refund, subject to the limitation of Section 11B, to be granted to the appellants. The determination of the precise refund period was left to the Assistant Collector.

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