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TMI Blog1987 (3) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Tariff Schedule. In the appellants' own case the Orissa High Court has upheld the contention and the decision has been reported in 35 STC 179. While considering the provisions of the Tariff Schedule and Section 2(f)(i) of the Central Excises and Salt Act, 1944, the High Court has held that gudakhu is a kind of manufactured tobacco like cigarettes, cigars, cheroots, biri, chewing tobacco and snuff, and was very much akin to hookah tobacco, specified in the Item. In spite of the decision of the High Court the Assistant Collector, Cuttack, issued a requisition on 4-8-1977 to the appellants to take out Central Excise Licence alleging that gudakhu was liable to pay excise duty under Tariff Item 68. The appellants were forced to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 50 per cent while the percentage of molasses used is higher. The Orissa High Court referred to the definition of tobacco in the First Schedule of the Central Excises and Salt Act, 1944. In para 11 the Orissa High Court has observed as under : "It would be pertinent to remember that 'hookah tobacco' as referred to in Section 2(f)(i) of the 1944 Central Act is gudakhu. It is placed on the hookah and is used for smoking. The constituents of hookah gudakhu are not very much different from the gudakhu used for cleansing teeth. Gudakhu used for smoking by hookah comes within the meaning of 'manufactured tobacco'. There is no reason why gudakhu used for teeth would not be construed as tobacco." Shri Mukherjee, Advocate, urged that the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts filing a fresh classification list. 5. Shri Vineet Kumar, S.D.R., submitted that the tobacco was not manufactured tobacco and the decision of the High Court was only in respect of hookah tobacco and not in regard to the subject goods. In regard to Notification 59/81 dated 12-3-1981, which had exempted gudakhu in the form of granules classifiable as mixture he urged that the exemption was only in respect of gudakhu in the form of granules and not otherwise. 6. We have considered the contentions of both the parties. The point at issue was the subject-matter of the dispute before the Orissa High Court. The dispute arose between the Sales Tax Department and the appellants herein. We also notice that the High Court had to consider the levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew excise levy on gudakhu, tooth paste with immediate effect. The entry tobacco refers to both unmanufactured and manufactured tobacco. When the items specifically refers to both categories of tobacco, there was no justification for the Revenue to ignore the same and bring it under T.I. 68 basing their conclusions on a classification filed under protest. In view of the decision of the Orissa High Court and in the light of the other materials we are of the view that the impugned order cannot be sustained. The appeal is, therefore, allowed with consequential reliefs, if any. 10. [per : G. Sankaran, Vice-President (T)].- I would like to add a few lines. 11. The point for consideration in the present appeal is whether "gudakhu" manufactured b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is "smoking mixtures for pipes and cigarettes' and another "hookah tobacco". There is an exemption notification issued under Central Excise Rule 8(1) (Notification No. 59/81 dated 12-3-1981) which exempts from basic excise duty and additional excise duty smoking mixture known as gudaku in the form of grannules from so much of duty leviable thereon as is in excess of the duty leviable on hookah tobacco. 14. Considering the nature of the product under consideration and that of the product considered by the Orissa High Court and the Tariff Entries and the Exemption Notification as adverted to earlier, there is little doubt that the subject product "Gudaku" fell under Item No. 4 and not Item No. 68. 15. In the result, the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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