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TMI Blog2019 (12) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... ate headings for Chewing Tobacco and Jarda Scented Tobacco leads us to conclude that the two products are different products classifiable under different tariff items and have to be assessed accordingly going by the ingredients of the product - such ingredients stand revealed by the test report of the chemical examiner supported by the statement of Shri Shashi Kumar Maheshwari. The issue of classification of Baba Zarda stands finally decided by the Hon ble High Court of Orissa in the case of MISHRA ZARDA TRADERS VERSUS STATE OF ORISSA [ 1987 (1) TMI 455 - ORISSA HIGH COURT] . While dealing with classification of the said product, the Hon ble High Court observed that Baba Zarda Zafrani Patti Scented Tobacco is essentially Zarda and not Chewing Tobacco. The same is leviable to tax. It is the classification of the product which is relevant and the subsequent consequences of the same resulting in confirmation of demand of duty are result of the decision on the classification. Whether in the case of Sales Tax or in the case of Central Excise, once the product stand held as Jarda Scented Tobacco by the Hon ble High Court and there being no contra decision of any other High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods was required to file declaration in Form-1 in terms of the provisions of the said rules, declaring the number of packing machines installed in his factory so as to calculate duty for a particular month in respect of such operating packing machines and to pay the duty accordingly on monthly basis. As the appellant was the manufacturer of such notified goods, they filed declarations in terms of the provisions of Rule 6 of the said rules, declaring the product as chewing tobacco falling under Central Excise Tariff Heading 2403 99 10. While granting approval to the said declaration, the Original Adjudicating Authority held that product being manufactured by the appellant was not chewing tobacco but the same was Jarda Scented Tobacco instead of Chewing Tobacco, (without lime) as declared by the assessee. Accordingly, he held that the same is appropriately classifiable under Heading 2403 99 30. Seven appeals are arising against the said change in classification, which classification also stands approved and upheld by Commissioner (Appeals). The balance appeals are confirming the duty of Excise, as a consequence of such change in classification. In one of the appeals the abatement g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e test report is vitiated piece of evidence and should be kept out of consideration. 6. On the other hand learned D.R. appearing for the Revenue reiterated the reasoning of the authorities below and submitted that each and every issue raised by the appellants stand effectively dealt with by the Lower Authorities and submits that inasmuch as the issue stand finally decided by the Hon ble Orissa High Court in respect of the same product of the assessee, the same cannot be re-opened and decided afresh. He submits that the Orissa High Court decision has finally concluded the issue in favour of the Revenue and there being no contra decision of any other High Court, the ratio declared by the Orissa High Court would apply. He accordingly prays for rejecting the appeals. 7. Having considered the submission made by both the sides, we find that the appellants were manufacturing the goods under the brand name of Baba and filed various declarations in terms of the provisions of Chewing Tobacco and unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010 by describing the product as Chewing Tobacco. Such declarations w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coloured small cut pieces of vegetables matter (cut bits of leaves) along-with silver flecks having pleasant odour. It was composed of tobacco, silver flecks fragrance. (ii) On opening the sample packet the sample was found in loose packing. The sample was in the form of yellowish brown coloured small cut pieces of vegetables matter (cut bits of leaves) along-with silver flecks having pleasant odour. It was composed of tobacco, silver flecks fragrance. It had the characteristics of scented Tobacco. It did not contain slaked lime. Further, clarifications were sought from CRCL vide letter dated 17.03.2016 upon which the CRCL vide letter dated 05.05.2016 clarified as under: In this regard, it is to inform that on the basis of authentic technical literature (IS) analytical findings, it is opined that sample registered under CL-568 C. Ex, CL-575 C. Ex CL-571 C. Ex. to CL-573 C. Ex/18.01.2016 are Chewing Tobacco (Zarda), whereas CL-574 C. Ex./18.01.2016 is a Preparation containing chewing tobacco. And whereas the party is manufacturing the same product but with a different RSP/weight, in its another unit at 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of Baba supports the opinion of the Chief Chemist, which cannot be dismissed lightly. As such, we hold that reference and reliance to the said test report of Chemical Examiner cannot be faulted upon. Further, though the chemical examiner has opined on the correct classification, which may not be within his jurisdiction, we note that Commissioner has primarily gone by the test report of the chemical examiner and has not adopted his opinion on classification straightaway without discussing the ingredients etc. and the two entries in the Excise Tariff. He has independently examined the issue and such contention even if accepted, does not tilt the case in favour of the assessee. 9. Further, learned advocate has strongly contested that for the past few years their declaration as Chewing Tobacco is being accepted by the Revenue and as such the same cannot be changed all of a sudden. The said plea of the assessee stand dealt with by Commissioner in one of his order wherein, by referring to various decisions of the higher courts he has observed that there is no estoppel in taxation matters and the past erroneous classification followed is no bar to De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermination of correct annual production capacity of a particular unit. While passing the orders in terms of the said rules, by way of approving the declarations, the correct classification of the product being manufactured by the assessee is definitely required to be examined. Without deciding on the correctness of the description of the goods declared by the party, it is not possible and practical as also legal to determine the capacity and assessee s liability to pay duty. As such, we find no merits in the above contention of the learned advocate. 11. We also note that classification under the main Heading 2403 places Chewing Tobacco as also Jarda Scented Tobacco under two different Sub-heads. For better appreciation, we reproduce the said heading as under:- 2403 OTHER MANUFACTURED TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; HOMOGENISED OR RECONSTITUTED TOBACCO; TOBACCO EXTRACTS AND ESSENCES 2403 99 -- Other : 2403 99 10 --- Chewing tobacco 2403 99 20 --- Preparations containing chewing tobacco 2403 99 30 --- Jarda scented tobacco 2403 99 40 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bacco products (Third revision of IS 10335) ICS 65.160 for BIS use at para 2.185 had termed Zarda as a chewing tobacco product made of highly scented and flavours tobacco flakes, chewed along with betel nuts , paan (betel leaf). The representative of the party during the submissions made on 16-02-2016 before the Deputy Commissioner, Central Excise Division II, Noida-I, himself admitted that the product in question was made by adding saffron and scented flavours along with other ingredients. Therefore, in view of the discussion above, I conclude that the Baba Flavoured Chewing Tobacco should be classified as Jarda Scented Tobacco falling under CETH No.24039930 of the Central Excise Tariff Act, 1985. As regards party s contention with regard to market parlance and market enquiry I find that when clear-cut classification of the goods is determinable with reference to the Central Excise Tariff, there is no requirement for any market enquiry or for resorting to market parlance. Test of market parlance and supporting market enquiry is relevant only when classification is competitive and cannot be decided merely by referring to the Central Excise Tariff Act, 1944. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enclature and understanding between persons in the trade but it is also a settled legal position that the said doctrine of commercial nomenclature or trade understanding should be departed from in a case where the statutory content in which the Tariff Entry appears, requires such a departure In cases where the application of commercial meaning or trade nomenclature runs counter to the statutory context in which the said word was used then the said principle of interpretation should not be applied- Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a Tariff Entry and there is no conflict between the Tariff Entry and any other entry requiring to reconcile and harmonise that Tariff Entry with any other Entry. Further in the case of Dunlop India Ltd. vs. Union of India And Others 2002-TIOL-647-SC-CU-LB it has been held that there is no estoppels in Taxation matters. 13. Apart from the above, we find that the issue of classification of Baba Zarda stands finally decided by the Hon ble High Court of Orissa in the case of Mishra Zarda Traders vs. State of Orissa referred supra. Whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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