9911796707
TMI Blog1999 (11) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules, 1944. 2. Appellants manufacture machine rolled cigarettes falling under Chapter sub-heading 2403.11 as Central Excise Tariff Act for which they received cut tobacco from M/s. Deccan Tobacco Processors Ltd. (DTPL), Hyderabad under Chapter X Procedure at concessional rate of duty. 3. The Department by show cause notice, dated 27-4-1994 alleged that a quantity of 3440 kgs of cut tobacco was not entitled to concessional rate of duty under Chapter X Procedure and the normal duty amounting to Rs. 1,40,190.75 had become payable by the appellants. The Department alleged that the appellants after procuring 26,400 kgs. of cut tobacco under Chapter X Procedure at concessional rate of duty from DTPL had returned the said quantity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 196B(i), the appellants liability to duty under Chapter X Procedure in respect of the said stock had come to an end. Further processing or reprocessing the returned defective cut tobacco by DTPL was the responsibility of DTPL and not of the appellants. The supply of fresh cut tobacco by DTPL subsequently is not to be linked with defective/damaged tobacco for purposes of accounting in the appellants factory. If the DTPL had sent 2320 kgs. of tobacco dust to the appellants, the same cannot be the basis for demanding the duty at the normal rate from the appellants. They also contended that the original manufacturer had sent cut tobacco after reprocessing under a mistaken notion that it pertains to the defective cut tobacco sent to them un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the place of the original manufacturer. Notification No. 356/86 under which the concessional rate of duty on cut tobacco is allowed, permits the concessional rate only when the cut tobacco is used in the actual manufacture of cigarettes. The Notification does not make any reference to the processing of cut tobacco. Further, neither Rule 196B nor the conditions prescribed by the Collector authorise the applicants to send the cut tobacco for re-processing. The appellants in the instant case, by receiving back the cut tobacco by giving reference to documents on which the cut tobacco was returned, was only trying to avail concession on 3440 kgs. of cut tobacco which had been used in the manufacture of machine-rolled cigarettes. He therefore, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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