2000 (11) TMI 489 - AT - Central Excise

Summary

Issues: Classification of the product under Central Excise Tariff - Sub-heading No. 2404.50 or 2404.60

The judgment by the Appellate Tribunal CEGAT, New Delhi involved two appeals concerning the classification of a product claimed by manufacturers to be a preparation containing snuff of tobacco under sub-heading No. 2404.60 of the Central Excise Tariff. The central excise authorities, however, classified the product as snuff of tobacco under sub-heading No. 2404.50. The Asstt. Commissioner of Central Excise and the Commissioner of Central Excise (Appeals) upheld this classification, stating that the addition of flavors does not change the essential characteristic of the product. The Tribunal heard arguments referencing previous decisions and observed that the appellants were importing duty-paid snuff and adding flavors before packing for sale.

The Tribunal analyzed previous decisions, including Lachhman Dass Behari Lal v. CCE, New Delhi, where it was held that the final product, after adding flavors and processing, was classifiable under sub-heading No. 2404.60 as preparations containing snuff of tobacco. Similarly, in Khetu Ram Bishamber Das v. CCE, New Delhi, the Tribunal classified a preparation made from raw snuff of tobacco under sub-heading No. 2404.60. The Tribunal noted consistency in its decisions across cases like Commissioner of Central Excise, Chandigarh v. Khetu Ram Bishamber Das and others, supporting the classification of prepared snuff under sub-heading No. 2404.60.

The Tribunal mentioned that the Revenue's appeal against the decision in Lachhman Dass Behari Lal's case was admitted by the Supreme Court, but there was no information on whether the Tribunal's order had been stayed or the final outcome of the civil appeal. Despite this, the Tribunal, relying on its previous decisions, disagreed with the Commissioner of Central Excise (Appeals) and allowed both appeals. The Tribunal emphasized that any consequential benefit would be subject to the law of unjust enrichment and the Supreme Court's decision in Mafatlal Industries Ltd. v. Union of India.

In conclusion, the Tribunal allowed both appeals, maintaining the classification of the product as preparations containing snuff of tobacco under sub-heading No. 2404.60 of the Central Excise Tariff.