2006 (7) TMI 32 - AT - Central Excise

Central Excise Raw tobacco treated with quimam and perfumes were classified under sub-heading 2401.10 of CET and not under sub-heading 2404.40 ibid.

Summary

Issues:
Classification of product as chewing tobacco or preparation containing chewing tobacco.

Analysis:
The case involved the classification of a product prepared from raw tobacco treated with quimam as either chewing tobacco or a preparation containing chewing tobacco. The officers concluded it was 'loose unbranded scented tobacco' classified under Ch.2404.40. A Show Cause Notice was issued demanding duty and penalty. The Commissioner ruled it as chewing tobacco, not a preparation, based on the manufacturing process. The appellant argued the product should be classified as a preparation. The Commissioner's decision was based on a previous tribunal ruling regarding quimam's excisability under Ch. 2404.40, which the appellant contested as their product was not quimam. The appellant claimed the product was not a compound but raw tobacco treated with quimam and perfumes, making it a preparation. They cited a CESTAT decision in Yogesh Associates case supporting their classification.

The respondent argued based on a Supreme Court ruling that quimam used in chewing tobacco production is excisable under sub-heading 2404.49/2404.40, supporting the Commissioner's decision. The appellant countered that the Supreme Court ruling pertained to quimam's classification, not raw tobacco treated with quimam. The Tribunal noted a previous decision in Yogesh Associates case where raw tobacco treated with quimam and perfumes was classified under Heading 2401.10, not 2404.40. They found the Supreme Court ruling inapplicable as it did not involve raw tobacco, thus allowing the appeal and setting aside the Commissioner's order.

In conclusion, the Tribunal's decision hinged on the classification of the product based on the treatment of raw tobacco with quimam and perfumes. The appellant successfully argued that their product should be classified as a preparation containing chewing tobacco, not just chewing tobacco, citing relevant case law. The Tribunal differentiated the case from a Supreme Court ruling on quimam classification, emphasizing the specific nature of the product in question.