1987 (1) TMI 352 - AT - Central Excise

Summary

Issues: Classification of "Kapoori Tambaku Pan Masala" under Central Excises and Salt Act - Whether under Item No. 4(II)(5) as chewing tobacco or under residuary Item No. 68.

In this judgment, the issue at hand was the classification of the product "Kapoori Tambaku Pan Masala" under the Central Excises and Salt Act. The product contained 10.8% tobacco along with other ingredients like Supari, lime, coconut, camphor, cardamom, and menthol. The lower authorities had classified the product under Item No. 4(II)(5) of the Act as chewing tobacco. The appellants contended that since Supari was the predominant ingredient, it should not be classified as chewing tobacco. The respondent argued that even a small percentage of tobacco in the product made it liable for duty as chewing tobacco. The Tribunal referred to a previous case involving a similar product called "Dokta" and concluded that for a product to be considered chewing tobacco, tobacco should be the main ingredient. They also noted that the Board's Tariff Advice supported the view that the presence of duty-paid tobacco in pan masala did not automatically classify it as chewing tobacco. Therefore, the Tribunal held that the product in question fell under the residuary Item No. 68 of the Act, not under Item No. 4(II)(5), overturning the lower authorities' decision.

The appellants had also claimed eligibility for exemption under certain notifications if the product was classified under Item No. 68. However, since the lower authorities had not made a finding on this claim due to their classification decision, the Tribunal did not address this issue in the current appeal. The appellants were advised to pursue this claim before the appropriate authority separately. Ultimately, the Tribunal allowed the appeal, setting aside the orders of the lower authorities and classifying the product under Item No. 68 of the Central Excises and Salt Act.