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TMI Blog1996 (12) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... intainers bearing a brand name, falling under Heading 2404.49 was also required to pay duty. In fact in the absence of a set-off notification, duty was required to be paid at two points. Later, vide Notification No. 14/94-C.E., dated 8-3-94, the provisions of Rule 56A were extended to the chewing tobacco whereby credit of the duty paid on the inputs, namely, unbranded chewing tobacco, could be used at the time of clearance of the branded chewing tobacco on payment of duty. At this stage also, duty was required to be paid at two stages. On 20-5-94, vide notification 23/94-C.E., Rule 56A was omitted. Vide notifcation 24/94-C.E. also dated 20-5-94, the Modvat facility was extended to chewing tobacco. Vide notification 23/94-C.E. (N.T.), sub-rule (4) of Rule 49 and third proviso to Rule 9(1) of the Central Excise Rules, 1944 were also omitted. Even after this amendment, the liability of the unbranded tobacco to pay duty continued. Later, vide issue of Notification No. 121/94, dated 11-8-94, unbranded chewing tobacco, captively consumed in the manufacture of branded chewing tobacco, was exempted from payment of duty. The jurisdictional Assistant Collector issued separate show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisaged under Sec. 11A at all. It was submitted that in spite of procedural drawback, the benefit of Modvat scheme was available to them. 6. The order of the Commissioner was deficient. Whereas full duty had already been paid by the assessees, the Commissioner was confirming the demand of duty on the inputs. Even if this duty, if paid by the appellants, was permitted by the Commissioner towards purpose of taking credit, the duty already paid on the final products was paid in excess. The Commissioner should have not confirmed the demand or in the alternative should have ordered refund of the duty already paid on the branded chewing tobacco. It was submitted that the adjudicating authority as well as the Tribunal, at the time of granting stay of recovery and dispensation with the deposit, had accepted that there was no loss of Revenue. The entire proceedings before the Commissioner were, therefore, an excercise in futility. 7. Shri P. Das, ld. S.D.R. stated that the facts are not in dispute. He stated that the unbranded chewing tobacco manufactured by the appellants, before being packed in cartons bearing their brand name, although not marketed by the appellants, were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaf merely cut, may be packed and sold as smoking tobacco or chewing tobacco. These may be packed in paper packets branded or otherwise. It is a common sight in South India that long leaves in clusters are sold as chewing tobacco. Thus the term chewing tobacco covers a wide distance. Whereas at the prepared compound stage, it may fetch a value of Rs. 50.00 for 20 gms; the air cured leaves may be sold for a few paise. But both would deserve the title, chewing tobacco. 11. The fact that unmanufactured tobacco is used for the purpose of smoking or chewing is evident from Notification 118/86-C.E. (N.T.), dt. 1-3-86, as amended by Notification 14/95-C.E. (N.T.), dt. 16-3-95. 12. In view of this reality, it is to be held that the preparation of chewing tobacco immediately before being packed in the tin and plastic containers, bearing the appellants brand name, were marketable and excisable goods appropriately classifiable under Heading 2404.49. 13. Sh. Narasimhan was at pains to point out that the amendments introduced in the Budget 1994 and thereafter were not known to the assessees nor to the department and, therefore, the failures committed by the appellants were condonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y demanded by Stay order No. 44-45/96-D. We do not think that the interpretation of our stay order as made by the ld. Advocate, is correct. In considering the stay application, we had observed that since the ld. Collector himself had considered that the duty demanded and confirmed by him in these proceedings would be available for use to the appellants for Modvat credit. In this manner, we had held that there was really no loss of revenue to the exchequer. As regards the calculation made by the ld. Counsel, we observed that in Para 2 of his order, when stating the facts, the Collector had held that in calculating the value of the unbranded chewing tobacco backward from the branded chewing tobacco, a remissions of 15% of the price of branded chewing tobacco was claimed by the party on account of packing charges. In his calculation, Sh. Narasimhan, however, has claimed that the value of unbranded chewing tobacco, as determined by the excise officers was 15% of the value of the branded chewing tobacco. Even if this grave error was not there, it would have been difficult to accept Sh. Narasimhan s contentions in this regard. 15. On the analysis above, we find that the appellants were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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