1999 (8) TMI 378 - AT - Central Excise

Summary

Issues involved: Appeal against confirmation of duty and imposition of penalties u/s Rule 173Q and Rule 209A.

Summary:
The Appellate Tribunal CEGAT, CALCUTTA addressed five appeals arising from the same impugned Order passed by the Commissioner of Central Excise, Calcutta. The main appellant, M/s. Shree Prasad Grinding Mills, faced a confirmed duty demand of Rs. 52,35,225.25 and a penalty of Rs. 5.00 lakh u/r 173Q. Other appellants were aggrieved by personal penalties imposed under Rule 209A of Central Excise Rules, 1944.

The main issue revolved around whether the process of cutting/crushing unmanufactured tobacco by the main appellant constituted manufacturing of tobacco powder/granules classifiable under sub-heading 2404.90. The appellant argued that previous tribunal decisions supported their position that the process did not amount to 'manufacture' and should be classified under Tariff Heading 2401.00 with nil duty rate. The Tribunal agreed, setting aside the duty demand and penalties imposed.

Regarding the personal penalties imposed on other appellants under Rule 209A, the Tribunal found no justification for upholding them in light of the main appellant's successful appeal. The penalties were consequently set aside, and the appeals of the other appellants were allowed.