1998 (2) TMI 359 - AT - Central Excise

Summary

Issues:
Classification of Jarda tobacco as manufactured or unmanufactured tobacco under Central Excise Rules.

Analysis:
The appeal concerned the classification of Jarda tobacco manufactured by the appellants. The Commissioner classified the goods under Heading 2404 as manufactured tobacco, leading to the demand for short levy and confiscation of goods. The Commissioner referred to the Tariff description covering chewing tobacco, including various preparations. The Commissioner held that even unadditive tobacco packed in branded containers falls under sub-heading 2404.41, necessitating excise formalities. A penalty was imposed on the appellants for non-compliance.

The appellant contended that their product was unmanufactured tobacco, supported by testing showing no additives. The Chemical Examiner referenced a Board circular classifying Jarda unmanufactured tobacco under Heading 24.01. The appellant cited a Supreme Court decision and a Tribunal ruling to challenge the Commissioner's classification. They argued that the Board's circular was binding and that repacking raw tobacco does not convert it into manufactured tobacco.

The Department reiterated the Commissioner's findings, emphasizing Chapter Note 2 of Chapter 24 of the Central Excise Tariff Act (CETA) to consider any treatment as manufactured tobacco. They argued that the Board's circular did not reference Chapter Note 2, making it advisory and not binding.

The Tribunal analyzed the samples and test reports, noting the absence of additives in the tobacco. They referenced the Board's circular, Supreme Court decision, and the purpose of uniform classification by the Central Board of Excise & Customs. The Tribunal held that the tobacco was unmanufactured Jarda chewing tobacco, aligning with the Board's circular and Supreme Court precedent. They rejected the Commissioner's stance on Ministry instructions and Chapter Note 2, setting aside the impugned order and allowing the appeal. The Tribunal ruled that the tobacco was correctly classified as unmanufactured under Heading 24.01 of the CETA.