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TMI Blog2010 (8) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... pute, the Pan masala containing Tobacco (Gutka) was classifiable under sub-heading 2404.40 of the Central Excise Tariff. The Department, however, filed appeals to Hon'ble Supreme Court against the Tribunal's orders under Section 35L(b) of the Central Excise Act, 1944. The appeals filed by the Department were disposed off by Hon'ble Supreme Court by a common order dated 8-12-09 [2010 (249) E.L.T. 322 (S.C.)] in respect of appeals No. 4226-4227/04, 7029-7030 & 7621/04 and 532 & 5019/05 by which the matters were remanded to the Tribunal for de-novo consideration of the matter in accordance with law. Hon'ble Supreme court while remanding this matter observed as under - "7. On going through the impugned judgments of the Tribunal, we find that there is no analysis of the aforesaid entries in the context of classification of the subject product. The Tribunal has merely quoted a judgment of this court in the case of Kothari Products Ltd. v. Government of Andhra Pradesh reported in 2000 (9) SCC - 263. In that judgment, the issue arose under the provisions of AP General Sales Tax Act. The question which arose for determination was whether "Gutka" is a "tobacco" and stood covered by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot contesting the classification of Gutka during the period of dispute under sub-heading 2106.00, pleaded that while during the period prior to November 2000, they were classifying the Pan masala containing tobacco (Gutka) under sub-heading 2106.00, it is only on the Department's instructions that in November 2000, they filed fresh declaration classifying the goods under Sub-heading 2404.40 of the Tariff, that while the goods covered by sub-heading 2106.00 attracted 16% Cenvat duty and 24% SED, the goods covered by sub-heading 2404.40 attracted 16% Cenvat duty + 24% SED + 10% AED (GSI)), that in spite of the goods having been classified under sub-heading 2404.40 from November 2000, as per the Department's instructions, the Department subsequently issued show cause notices for revising the classification to sub-heading 2106.00 and demanding the differential duty, that during the period of dispute, MRP based assessment under Section 4A was not applicable to Pan masala and hence the assessable value would remain the same whether the goods are classified under sub-heading 2106.00 or sub-heading 2404.40 and since under sub-heading 2404.40, the AED (GSI) at the rate of 10% adv. was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to "Pan masala" or under Sub-heading 2404.40 pertaining to "chewing tobacco and preparations containing chewing tobacco." 4. Sub-heading 2106.00 and 2404.40 during the period of dispute were as under - "2106.00 Pan masala" 2404.40 chewing tobacco and preparations containing chewing tobacco." 4.1 During the period of dispute, there was Chapter note 3 to Chapter 21, which is reproduced below : "In this chapter, "Pan masala" means any preparations containing betel nuts and any one or more of the following ingredients, namely lime, katha (catechu) and tobacco, whether or not containing any other ingredients, such as cardamom, copra and menthol". 4.2 During the period of dispute, there was no sub-heading in 24.04 specifically covering Gutka i.e. Pan masala containing tobacco. Such a Sub-heading - SH 2404.49 was inserted in Heading 24.04 w.e.f. 1-3-2001 only. 4.3 As per the provisions of Rule 1 of the Rules for the interpretation of 1st Schedule to the Central Excise Tariff Act, 1985, which is part of the 1st Schedule, the classification shall be determined according to the terms of the headings and any relative section or Chapter notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. Commercial Tax Officer, Colmbatore reported in 2009 (243) E.L.T. 179 (Mad.) has held that though w.e.f. 1-3-2001 "chewing tobacco" and "Pan masala containing tobacco" are in the same heading, "chewing tobacco" does not include and never included "Pan masala containing tobacco" and but for inclusion of "Pan masala containing tobacco" in Chapter 24 (sub-heading 2404.49) of Central Excise Tariff w.e.f. 1-3-01, it would have been covered by heading 2106.00. 4.5 In view of the above discussion, we hold that during the period of dispute, "Pan masala containing tobacco" i.e. Gutka was correctly classifiable under sub-heading 2106.00 of the Central Excise Tariff, not sub-heading 2404.40 pertaining to "chewing tobacco and preparations of chewing tobacco." 5. It has been pleaded that since the notification issued under Section 4A did not cover the "Pan masala containing tobacco" during the period of dispute, even if Gutka is classified under sub-heading 2106.00, no duty would be recoverable as assessable value determined under Section 4 of the Act would be the same irrespective of whether the goods are classified under sub-heading 2106.00 or 2404.40 and under sub-heading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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