9911796707
TMI Blog1998 (9) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... tobacco obtained by ripping of the defective cigarettes. The Appellants were initially removing the tobacco in question under Rule 196BB of the Central Excise Rules which regulates the removal of excisable goods obtained under Rule 192 under Chapter X procedure either as such or after being partially processed for purposes of test, refining, repair, reconditioning or carrying out any other operation necessary for completion of industrial process. It was, however, made clear that the subject goods should be returned to appellants premises, this was if any for further in the industrial process. Admittedly, in this case, this essential condition was not complied with and as such the action initiated in stopping the clearances under Rule 196 BB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and under the circumstances there stands no case for refund of amount of duty on goods cleared on payment of duty under Rule 196A on clear commitment in their letter, dated 19-6-1989 that the goods were surplus to their needs. The contention of the Appellants, have therefore no leg to stand and appeal fails on merit. 6. In view of the discussions as above, I reject the Appeal. 2. The facts of the case, in brief, are that the Appellants are Cigarette Manufacturers and were getting cut tobacco under Chapter X procedure and paying duty in terms of Notification No. 356/86, dated 24-6-1986. The Appellants collected some ripped tobacco and returned it to the original manufacturers of cut tobacco after payment of duty thereon. They did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 1986, as amended, not been used in the manufacture of machine-rolled cigarettes should be reversed. The original manufacturer will have to clear the concerned goods again on payment of duty at appropriate rates. Such ripped tobacco can also be sent to any place outside under rule 196BB for reprocessing and return thereafter to the consignor s premises. In this case also, at the time of such clearance, the credit of duty already availed of on such cut tobacco as per Notification No. 355/86-C.E., dated 24th June, 1986 as amended will have to be reversed since such cut tobacco has not been used in the manufacture of machine-rolled cigarettes. The ld. Counsel submitted that the facts in their case are identical to those analysed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except that the ripped tobacco emerged out of cigarettes which were found defective and, therefore, ripped open. In the result, there is a lot of substance in the contentions putforth by the appellants herein and the reasoning of recovery of duty as contained in the impugned orders of the Collector of Central Excise, Allahabad and Collector of Central Excise (Appeals) is not sustainable. The Appeals are, therefore, allowed. The cross-objections are only supportive of the impugned orders and not arising out of any grievance. They are, accordingly, dismissed as mis-conceived. The ld. Counsel, therefore, submitted that in view of the above submissions and the case law cited above, the Appeal may be allowed. The ld. Counsel also undertook to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be rejected. 8. We have heard the submissions of both sides. We have considered carefully the contentions of both sides. We note in the instant case that cut tobacco was received by the Appellants under Chapter X procedure following the Notification Nos. 355/86 and 356/86. In the course of manufacture of cigarettes and their packing, some cigarettes were damaged and, therefore, ripped tobacco has come into existence. This ripped tobacco was sent to the original manufacturer. The question, therefore, arises as to whether at the time of clearance of such ripped tobacco from the factory of the Appellants, duty was required to be paid or only credit taken was to be reversed. 9. We have also seen the Order of the Tribunal. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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