TMI Blog2023 (10) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... itation was not warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal. The question is to be answered against the Assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the Assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944. Classification of goods - HELD THAT:- The stand of the Assessee has been consistent to the effect that product manufactured by it is to be classified as 'zarda/jarda scented tobacco' and at the insistence of the jurisdictional Deputy Commissioner the Assessee was classifying the goods under CET SH 2403 9910 i.e., 'chew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2020), Civil Appeal Nos. 6523-24 of 2023 (Arising out of Diary No. 2810 of 2020), Civil Appeal No. 959 of 2019, Civil Appeal Nos. 6538-42 of 2023 (Arising out of Diary No. 14581 of 2019), Civil Appeal No. 6531-37 of 2023 (Arising out of Diary No. 44912 of 2019), Civil Appeal No. 6525 of 2023 (Arising out of Diary No. 3484 of 2020), Civil Appeal No. 6526 of 2023 (Arising out of Diary No. 3513 of 2020), Civil Appeal No. 6527 of 2023 (Arising out of Diary No. 3536 of 2020), Civil Appeal No. 6528 of 2023 (Arising out of Diary No. 3544 of 2020), Civil Appeal No. 6529 of 2023 (Arising out of Diary No. 3545 of 2020), Civil Appeal No. 6530 of 2023 (Arising out of DIARY No. 3547 of 2020), Civil Appeal No. 5146 of 2015 and Civil Appeal No. 3596 of 2023 S. Ravindra Bhat and Aravind Kumar, JJ. For the Appellant : Mr. B. Krishna Prasad, AOR Mr. S.K. Bagaria, Sr. Adv. Mr. Ramesh Singh, Sr. Adv. Ms. Sheena Taqui, Adv. Ms. Akansha Saini, Adv. Mr. Ajit K Sinha, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR Mr. N. Venkatraman, A.S.G. Mr. Mukesh Kumar Maroria, AOR Ms. Nisha Bagchi, Adv. Mr. H.R. Rao, Adv. Mr. S.K. Singhania, Adv. Ms. Aakansha Kaul, Adv. Mr. Shetty Uday Kumar Sagar, Adv. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts 126 127 ii. Submissions of Parties 127 129 iii. Discussion and Findings 129 130 7. Commissioner of Central Excise ST Alwar v. Tara Chand Naresh Chand [C.A. No.959 of 2019] i. Brief Facts 131 133 ii. Submissions of Parties 133 137 iii. Discuss and Findings 137 142 ORDER Page 143-144 3. On behalf of the Revenue in the various groups of matters before this Court, we have heard: (1) Mr. N. Venkataraman, learned Additional Solicitor General of India, (2) Ms. Nisha Bagchi, learned standing counsel. 4. On behalf of the Assessee, we have heard: (1) Mr. S.K. Bagaria and Mr. Vivek Kohli, learned Senior Counsel, (2) Mr. A.R. Madhav Rao, Mr. Rupesh Kumar and Ms. Seema Jain, learned Counsel. 5. The Appellants in Group No. (s) 1,2,3,5,6 and 7, and the Respondents in Group No. 4, namely the 'Commissioner of Central Excise' are hereinafter referred to as Revenue . The Appellants in Group No. 4 and the respective Respondents in Group No. (s) 1,2,3,5,6 and 7, are hereinafter referred to as Assessee for the sake of convenience and brevity. 6. For ease of reference, the following table No. 2 of nomenclatures/abbreviations is made available below. TABLE 2 Sr. No. Nomenclature/ Abbreviation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.04.2010 Prescribing the capacity deemed to have been produced for chewing tobacco (including Filter Khaini), Unmanufactured Tobacco and Jarda Scented Tobacco. 7. Notification: 19/2010- C.E. dated 13.04.2010 prescribing the rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 8. Notification: 14/2012 CE Dated 14.03.2012 prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 9. Notification: 2/2014 C.E. dated 24.01.2014 prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 10. Notification: 17/2014 C.E. dated 11.07.2014 Prescribing the new rate for chewing tobacco, unmanufactured tobacco and filter khaini. 8. It would be apt and appropriate to extract Section 11A as it stood in 1980, and as it stood after the amendment brought in 2000 and by Act 10 of 2000 (w.e.f. 17.11.1980) and subsequent substitution by Act 8 of 2011, as it would have a direct bearing on the various batch of appeals before us. They read as under: 1980 2000 2011 Section 11A. Recovery of duties not levied or not paid or short levied or short-paid or erroneously refunded. (1) When any duty of excise has not been levied or paid or has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be. [(1A) When any duty of excise has not been levied or paid or has been shortlevied or short paid or erroneously refunded, by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to subsection (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice. Subs. By Act 8 of 2011 Section 11.A Recovery of duties not levied or not paid or short-levied or short paid or erroneously refunded-(1)Where any duty of excise has not been levied or paid or has been short levied or short-paid or erroneously refunded , for any reason, other than the reason of fraud or collusion or any wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant Entry 2404.21, within its ambit of 'notified goods' for the purposes of availing benefits Under Section 4A. However, subsequently by Notification No. 10/2003 - CE (NT) dated 01.03.2003 was issued introducing Entry 24A in Notification 13/2002 dated 1.03.2002, thereby covering all goods under entry 2404.41 within the ambit of 'notified goods' for the purposes of Section 4A of the CE Act. 14. Prior to the introduction of the 8-digit tariff classification, 'chewing tobacco' was reflected under Chapter 24, under specific entry '2404.41' of the six-digit Central Excise Tariff classification. Subsequently the new 8-digit Central Excise Tariff classification was introduced vide Circular 808/05/2005 -CX dated 25.02.2005, Chapter 24 of the Central Excise Tarriff came to be amended and heading '2403' was introduced which reads: 2403 - Other manufactured tobacco and manufactured tobacco substitutes; 'Homogenised' or 'Reconstituted' tobacco; Tobacco extracts and essences . The Central Excise Tariff Heading '2403' included the following sub- headings: 2403 9910 chewing tobacco 2403 9920 preparations containing chewing tobacco. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g thereunder that the Assessee had been manufacturing and clearing the product manufactured by it as 'zarda/jarda scented tobacco' under the guise of 'chewing tobacco.' During the visit to the Assessee's factory by the Department's officers, they noticed the process of manufacturing 'zarda/jarda scented tobacco.' The statement of the production manager and also the statement of the factory in charge came to be recorded, based on which the Department concluded that there was a deliberate intention to evade payment of duty by misclassification and wilful misstatement of their product to enable them to pay lesser duty. Accordingly, by invoking the extended period of limitation as provided under proviso to Section 11A(1) CE Act, the Department called upon the Assessee to show cause as to why the product which had been classified as 'chewing tobacco' should not be classified as 'zarda/jarda scented tobacco' and why the said product should not be accordingly assessed to duty as per Section 4 of the CE Act, for the period 01.03.2006 to 10.07.2006. Further, the Assessee was required to show cause as to why the penalty as a consequence of wilf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly. Both sides have some points in their favour and some against them. Under these circumstances, in view of the fact that the label calls the product as Flavoured Chewing Tobacco, no Zarda Scent has been used and the product has not been sold as Zarda Scented Tobacco by the Appellant, we consider that the claim of the Appellant that the product is Flavoured Chewing Tobacco has to be accepted. Thus, on merit, the Appellants succeed. Therefore, the demand for differential duty fails and naturally the penalties imposed Under Section 11AC of Central Excise Act or Rules of Central Excise Rules, 2002 also have to be set aside. 21. The issue of limitation was also held in favour of the Assessee by opining as under: 22. In any case, we consider that the limitation would apply in this case and show cause notice should not have been issued beyond one year in view of the fact that the Appellant intimated their intention to change. Further, the Appellant had also intimated that the proposed change was not in line with industrial factory. Therefore, extended period also could not have been applied in this case. 22. Hence these appeals. SUBMISSIONS OF THE PARTIES 23. We have heard Shri N. Venk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with interest, at the appropriate rate Under Section 11AB of the Act 1944. 25. The learned Senior Counsel for the Revenue would further elaborate his submissions by contending that the Assessee has not shown any proof of record for concluding that 'zarda/jarda scented tobacco' is also 'chewing tobacco'. By contending that this tariff classification was in force during the period of the board's letter dated 23.06.1987, notice dated 15.07.1987, and the notification dated 16.03.1995 and as such they would not come to the rescue of the Assessee. It is also urged that the tariff has been aligned to 8 digits and more specifically calculation has been provided where 'chewing tobacco' and 'zarda/jarda scented tobacco' have been separately classified and as such the contention of the Assessee has no legs to stand. 26. The Revenue would further contend that the Assessee is selling its product as zafrani zarda and as such it cannot claim 'zarda/jarda' used in the tariff heading is different from 'zarda/jarda' used by Assessee and further, the Assessee has not been able to demonstrate how its product is different from 'zarda/jarda scen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bereft of material particulars, namely the intention of changing the heading and classification of the product which was being manufactured by them and no evidence for reasons of change was forthcoming from the said communication, and as such the Assessee cannot take umbrage under the said communication to stave-off its liability or, to contend that extended period of limitation cannot be applied as the department knew about such change. 29. The learned Counsel appearing for the Respondent - asseessee by supporting impugned order passed by the tribunal would contend that intention of the Revenue/Government was to levy duty on the product manufactured by the Appellant-Assessee Under Section 4A of CE Act only. He would submit that the product manufactured by the Assessee was classified under CET SH No. 2404.41 as 'chewing tobacco' and duty was assessed Under Section 4A of CE Act on MRP basis and accordingly duty was paid. He would contend that with introduction of the 8 (eight) digit tariff era, Assessee classified its product as 'zarda/jarda scented tobacco' under CET SH 2403 9930 for the period 01.03.2005 to 28.02.2006. At this juncture, he would hasten to add that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible under two entries, the one more beneficial to the Assessee would be adopted. Hence, relying upon the following judgments he prays for dismissal of the appeal filed by the Revenue: 1. HPL Chemical Ltd. v. CCE 2006 197 ELT Chandigarh 324 (SC) 2. Mauri Yeast India Pvt. Ltd. v. State of U.P. (2008) 5 SCC 680 3. C.G. S.T. CCE and ST Rohtak v. Som Flavours Masala Pvt. Ltd. - Civil Appeal No. 1251 of 2023 disposed of on 17.02.2023. 4. Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhawan Ltd. (2009) 12 SCC 419. ISSUES/QUESTIONS FOR CONSIDERATION 33. Questions that arise for our consideration in this group are as under: Q.1 Whether the authorities below were correct and justified in invoking the proviso to Section 11A of the CE Act? Q.2 Whether the product manufactured and cleared by the Assessee for the period 01.03.2006 to 10.07.2006 was required to be classified under the CET SH 2403 9910 as 'chewing tobacco' or to be classified under CET SH 2403 9930 as 'zarda/jarda scented tobacco'? DISCUSSION AND FINDINGS BACKGROUND 34. The Assessee herein was availing the benefit of the Notification No. 13 of 2002 dated 01.03.2002, issued in exercise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. M/s. Urmin Products Pvt. Ltd. the show cause notice came to be issued on 09.07.2007 and the OIO came to be passed on 28.01.2008 which resulted in the impugned order dated 25.03.2010. 37. The tribunal by the impugned order has held to the following effect: 22. In any case, we consider that the limitation would apply in this case and show cause notice should not have been issued beyond one year in view of the fact that the Appellant intimated their intention to change. Further, the Appellant had also intimated that the proposed change was not in line with the industrial factory. Therefore, the extended period also could not have been applied in this case. 38. It would be apt to note at this juncture itself that the judgment of this Court in CCE v. Cotspun (1999) 7 SCC 633, whereunder, it came to be held that levy of excise duty based on an approved classification list is not a short levy and differential duty cannot be recovered on the ground that it is a short levy. It was further held that levy of excise duty based on an approved classification list is the correct levy, at least until the correctness of the approval is questioned by the issuance of a show cause notice to the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'zarda/jarda scented tobacco' was not specified under MRP-based assessment Under Section 4A of CE Act, the goods had to be assessed Under Section 4 of the CE Act. The abatement provided to the goods classified under CET SH 2403 9910 was 50 percent. Hence, if the goods are cleared as 'chewing tobacco' the duty has to be paid on lower value resulting in payment of a lesser amount of duty, as the value determined Under Section 4A after 50 percent abatement was much lesser compared to transactional value Under Section 4 of CE Act. It is for this precise reason the Assessee changed the classification from 'zarda/jarda scented tobacco' to 'chewing tobacco'. 'Zarda/jarda scented tobacco' was brought into the ambit of Section 4A of the CE Act (MRP-based assessment), by virtue of amendment to Notification No. 2 of 2006 vide Notification No. 16 of 2006 dated 11.07.2006. In other words, 'zarda/jarda scented tobacco' was not specified for assessment Under Section 4A of CE Act for the period 01.03.2006 to 10.07.2006. In the light of the aforesaid discussion, we are of the considered view the contention of the Assessee cannot be accepted and the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccompanied by very strong words as 'fraud' or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the revenue invokes the extended period of limitation Under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 14. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word 'wilful', preceding the words misstatement or suppression of facts which means with intent to evade duty. The next set of words 'contravention of any of the provisions of this Act or Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the production manager and factory in-charge and manager recorded at the time of the inspection of the units/factory of the Assessee, whereunder they have clearly admitted in their statement dated 21.06.2007 recorded Under Section 14 of the CE Act, wherein they confirmed that in the E.R. 1 returns filed for the month of April 2006 onwards, they have revised the classification of their final product from CET SH 2403 9930 to CET SH 2403 9910 and started describing their product as 'chewing tobacco' instead of 'zarda/jarda scented tobacco' and by virtue of such declaration they continued to pay duty as per MRP-based assessment under the relevant Notification No. 2 of 2006 dated 01.03.2006 though 'zarda/jarda scented tobacco' was not covered under MRP-based assessment during the period 01.03.2006 to 10.07.2006 till the tariff entry i.e., CET SH 2403 9930 being brought within the ambit of Section 4A of CE Act by issuance of Notification 16 of 2006 dated 11.07.2006. It is for this precise reason that the act of the Assessee was held to be a deliberate and accordingly wilful misstatement was alleged on part of the Assessee, with an intention to evade duty payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise duty, deliberately resorted to mis-statement and willfully suppressed the vital facts. The Assessee had changed and misclassified the product from 'Jarda scented tobacco' to 'Chewing tobacco' with an intention to evade payment of duty payable Under Section 4 of the Central Excise Act, 1944, despite knowing the fact that their product was not covered under the relevant Notification which provides for valuation Under Section 4A. The Assessee did so to enable them to pay duty on lower value [as the value as per Section 4A of Central Excise Act, 1944 (MRP based assessment) was lower than the value as per Section 4 of Central Excise Act, 1944. Thus, there was a deliberate intention to evade payment of duty by the Assessee, by misclassification and willful mis-statement of their product and due to this act, the department is entitled to invoke the extended period as provided in the proviso to Section 11A (1) of the Central Excise Act, 1944 to recover the differential duty along with interest Under Section 11 AB for the larger period upto 5 years and has also rendered themselves liable to penalty Under Section 11 AC of the Central Excise Act 1944. I, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Serial No. 28 that all goods classified under entry SH 2403 9910 to 2403 9920 were covered for MRP assessment and the product 'zarda/jarda scented tobacco' was not included under said entry, it necessarily meant that 'zarda scented tobacco' could not be determined under MRP assessment scheme. 45. The signatory to the ER - 1 returns filed by the Assessee for the relevant period was Smt. Sheetal K Majithia, Director - Finance and she was the one who took the decision to change the classification of the product. Hence, she was issued with the summons for appearing and explaining the same. However, she chose to ignore the summons and has not appeared before the adjudicating authority. Whereas, the factory in-charge and manager, Shri Dipak S Shah, has appeared and has furnished the statement, whereunder he admits that he reports to Smt. Sheetal K Majithia, Director - Finance. He further admits in his statement dated 26.06.2007 and 09.07.2007, that their/Assessee's product is classifiable as 'jarda/zarda scented tobacco,' they still continued to pay duty as per MRP-based assessment prescribed Under Section 4A of the CE Act. He further admits at the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based assessment. The said notification did not specify the goods falling under CET SH 2403 9930, i.e., 'zarda/jarda scented tobacco', but it covers the goods falling under CET SH 2403 9910 i.e., 'chewing tobacco'. Thus zarda/jarda scented tobacco not having been specified under MRP- based assessment Under Section 4A of the CE Act, the goods had to be necessarily assessed Under Section 4 of the CE Act. The Assessee being aware that there being no change in the nature of the products, its ingredients and also the manufacturing process had changed and misclassified the product as 'chewing tobacco' from 'zarda/jarda scented' tobacco. Had the Assessee continued its classification as 'zarda/jarda scented tobacco', the duty payable as per transaction value Under Section 4 of the CE Act would have been much more than the determination Under Section 4A of CE Act after 50 % abatement. It is for this precise reason for avoiding and evading payment of the higher duty, the classification was deliberately changed from 'zarda/jarda scented tobacco' to 'chewing tobacco'. 48. The reliance placed by the Assessee on Board's letter dated 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 confirmed the demand of duty, interest, penalty and held that the product manufactured by the Respondent- Assessee falls under CET SH 2403 9930 as 'Zarda/Jarda scented tobacco' by concluding that assessment has to be made Under Section 4 of the CE Act. An appeal was preferred against the said order before the CESTAT which came to be allowed and the OIO dated 02.04.2008 was set aside. SUBMISSIONS OF THE PARTIES 52. We have heard the learned advocates appearing for the parties. 53. Ms. Nisha Bagchi learned Counsel appearing for the Department has supported the OIO dated 02.04.2008 while contending that the tribunal committed an error in setting aside the said findings and in holding that the product in question was classifiable as 'chewing tobacco' under CET SH 2403 9910 and rejecting the stand of the department that same should be classified as 'zarda/jarda scented tobacco' under CET SH 2403 9930. She would contend that the tribunal erred in relying upon its findings recorded in M/s. Urmin Products Private Limited which undisputedly is under challenge before this Court in Civil Appeal No. 10159-161 of 2010 (Group I) and as such it ought not to have relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring audit of the unit for the period 1.03.2006 to 11.07.2006 is possibility of higher Revenue during this period is due to (a) technical oversight by the Revenue itself which was later corrected and, (b) the alternate assessment on transaction value rather than MRP based assessment. He would contend that when classification of the product is accepted earlier and for the subsequent period, same cannot be classified differently. There being no definition of the competing products, the application of the common parlance test is to be adopted and when so adopted the only conclusion that has to be drawn is that product is to be construed as 'chewing tobacco', as declared in invoices and understood by distribution chain of dealers, stockists, retailers and consumers. He would submit that burden of proof lies on the Revenue as classification is a question relating to chargeability and the same having not been discharged by adducing any evidence whatsoever the classification as done by the adjudicating authority has been right set- aside by the tribunal. 56. He would submit that the Revenue is seeking to impose classification wherein the word 'perfumery' to impart flavour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to be issued by calling upon the Assessee to show cause as to why the short-paid duty amounting to Rs. 4,28,65,508/- should not be recovered. The said show cause notice came to be adjudicated and the Commissioner confirmed the said demand. 58. Being aggrieved by the order dated 02.04.2008 passed by the Commissioner, appeal before the tribunal was filed and as already noticed hereinabove, there were divergent views of the Member (Judicial) and Member (Technical). The judicial member at paragraph 16 of the order held that the Appellant (Assessee) had properly classified it as 'chewing tobacco' under CET SH 2403 9910 and applying the principles laid in M/s. Urmin Products Private Limited (which is the subject matter of Civil Appeal No. 10159-161 of 2010) allowed the appeal whereas the technical member disagreed with the said view and held that the product manufactured by the Appellant-Assessee is to be classified as 'zarda/jarda scented tobacco' under CET SH 2403 9930 and should be assessed under the provision of Section 4 of CE Act, for the relevant period and with effect from 11.07.2006 Under Section 4A when specific Notification No. 16/2006 dated 11.07.2006 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2006 to 11.07.2006 which in the instant case relates to 01.03.2006 to 10.07.2006. 63. In the instant case, the facts do not disclose there being a change in the declaration of the product manufactured by the present Respondent herein, as was in the case with M/s. Urmin Products Private Limited. Even otherwise by virtue of the change from Six-digit tariff to Eight-digit tariff era and during the period 01.03.2006 to 11.07.2006. Though the generic word 'chewing tobacco' including preparation commonly known as khara masala, quiwam, dhokta, zarda, sukha, surti or chewing tobacco and preparation containing chewing tobacco got bifurcated or took its new birth by virtue of which the said entry was re-organised and classified under three headings namely 'chewing tobacco' (2403 9910), 'preparations containing chewing tobacco' (2403 9920) and 'zarda/jarda scented tobacco' (2403 9930), the heading 'zarda/jarda scented tobacco' did not find a place in the corresponding Notification No. 02/2006 dated 01.03.2006 and thereby the 'zarda/jarda' scented tobacco got excluded from the preview of the Notification No. 02/2006 and the benefit of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial or substance. While Rule 2(a) deals with incomplete or unfinished Articles, Rule 2(b) deals with mixtures or combinations of a material or substance. 28. Rule 3 deals with cases where goods are classifiable under two or more sub-headings. But Rule 3 begins with a reference to Rule 2(b). Therefore, it is necessary to extract Rule 2(b) and Rule 3 together. They read as follows: 2. (a)*** (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tobacco'. In this background, the difference between 'chewing tobacco' and 'zarda/jarda scented tobacco' if attempted to be ascertained from the definition found in the glossary of Bureau of Indian Standards, particularly in terms of definition and preparation, it is classified as under: 2.27 'Chewing Tobacco'- Chewing tobacco, as its name suggests is a tobacco preparation for chewing purpose, also taken with paan (betel leaf). Gutka, surti, zarda, quiwam and dokta are some of the different types of chewing tobacco preparations. 2.184 'Zarda'- A chewing tobacco product made of highly scented and flavoured tobacco flakes. Chewed along with betel nut and paan (betel leaf). 66. A careful perusal of the meaning allocated to the concerned products, 'Chewing Tobacco' and 'Zarda' leads to formulation of the following distinction based on the different parameters as under: Preparation and Form Chewing Tobacco: Chewing tobacco typically comes in loose leaf or twist form. It consists of cured and fermented tobacco leaves. Chewing tobacco is usually taken by placing a portion of it between the cheek and gum, where it releases nicotine over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of HPL Chemicals Limited v. CCE, Chandigarh: 2006 5 SCC 208 while discussing the onus/burden of proof in matters of chargeability held as follows: 28. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the Assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue. On the one hand, from the trade and market enquiries made by the Department, from the report of the Chemical Examiner, CRCL and from HSN, it is quite clear that the goods are classifiable as denatured salt falling under Chapter Heading 25.01. The Department has not shown that the subject product is not bought or sold or is not known or is dealt with in the market as denatured salt. The Department's own Chemical Examiner after examining the chemical composition has not said that it is not denatured salt. On the other hand, after examining the chemical composition has opined that the subject-matter is to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for the product manufactured by the Assessee at the relevant period of time of the dispute. The Revenue has also not raised any specific grounds in relation to any wilful misstatement with an intention to evade duty on part of the Assessee, as opposed to the case of Urmin wherein one of the main grounds urged was the intention to avoid payment of duty. It is pertinent to mention that there is a specific observation made by the Commissioner in his OIO dated 30.03.2007 that no wilful suppression is attributable to the Assessee, and placing reliance on this very observation, the tribunal had also set-aside the penalty imposed upon the assesssee. It may be noted that this Court in the case of CCE v. Damnet Chemicals Private Ltd. (2007) 7 SCC 490 had held: 26. In the circumstances, we find it difficult to hold that there has been conscious or deliberate withholding of information by the Assessee. There has been no wilful misstatement much less any deliberate and wilful suppression of facts. It is settled law that in order to invoke the proviso to Section 11-A(1) a mere misstatement could not be enough. The requirement in law is that such misstatement or suppression of facts must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, as the product is flavour chewing tobacco and it is bought and sold in the market as chewing tobacco. Further the Appellant from the beginning classifying the same as chewing tobacco and after the period in dispute also classified the same as chewing tobacco. Hence I find merit in the contention of the Appellant that the product in question is chewing tobacco and classifiable under Heading 24039910 of the Tariff. 71. Upon anxious consideration of the aforestated facts, coupled with lack of cogent evidence for the purpose of determination of the classification entry with respect to the product manufactured by the Assessee, we deem it necessary to not interfere with the findings of the tribunal in light of the settled judicial findings of this Court which directly have a bearing on the facts of the present case. 72. At the cost of repetition, we would further like to reiterate that the observations and findings recorded in this group are exclusive to the peculiar facts of this case only. Thus, appeal filed by the Revenue deserves to be dismissed. III. COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX EXCISE AND CUSTOMS BHOPAL v. KAIPAN MASALA PVT. LTD. DIARY No. 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee and in order to ascertain the proper classification of goods, the officers of the department drew the samples of the products under panchnama dated 01.06.2015 and forwarded the same to the chemical examiner, CRCL, New Delhi and received the test report on 03.06.2015. It was found that the 'chewing tobacco' contains identical ingredients that are contained in 'scented zarda/jarda tobacco.' It was also noticed by the department that Assessee through communication and declaration form filed prior to 28.05.2015 had mentioned their product as Pan masala and scented zarda/jarda tobacco . Thus, having found that the product manufactured by the Assessee namely, contains the same ingredients as 'chewing tobacco' and 'scented zarda/jarda tobacco' and involves the same manufacturing process which was confirmed by the CRCL Report vide dated 03.06.2015 and the Assessee had attempted to change their stand by filing convenient declarations, the claim of the Assessee was not accepted. It appeared that the Assessee deliberately and intentionally mis-declared and misclassified their products with an intention to evade central excise duty. Hence an order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice was affirmed. The said order became the subject of appeal No. 51978 of 2018 and No. 51319 of 2018 before the CESTAT which vide the common order dated 14.11.2018 set aside the OIO. SUBMISSIONS OF PARTIES 79. Ms. Nisha Bagchi learned Counsel appearing for Revenue, would contend, that tribunal committed a serious error in holding the product in question as 'chewing tobacco' though it was to be classified as 'zarda/jarda scented tobacco'. She would contend that tribunal failed to appreciate the test report dated 4.11.2015, suggested that the product did not contain added lime and yet on the ground test reports not having been drawn a finding has been recorded by the tribunal to the effect that adjudicating authority was not in a position to correlate the test report in the absence of test memo. She would also contend that tribunal failed to notice that Assessee itself had requested for retest of the sample on the ground that the test report is not very specific and the various parameters on which it was opined that the sample contained the characteristics of ZST have been clearly spelt out and that the retest has been allowed by the adjudicating authority is factua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the packaging is determinative of the goods contained in the package, until proved to the contrary. Hence, the Assessee has prayed for dismissal of the appeal. DISCUSSION FINDINGS 81. It is pertinent to note at the outset that show cause notice dated 02.02.2016 for the classification of the product is the subject matter of the appeal before the CESTAT in Appeal No. E/53421 of 2018 where under the order dated 16.07.2018 is impugned before it. The said order dated 16.07.2018 has been passed by the Commissioner pertains to the period of June 2015 to August 2015 where the Commissioner has adjudicated and passed an order regarding mis-classification. 82. The orders dated 30.10.2015, 27.11.2015, 31.12.2015 and 29.01.2016 which were impugned before the Commissioner (Appeals) were disposed of on 23.10.2017 in the background of the show cause notice dated 02.02.2016. 83. The Assessee who has two units namely, at Bhopal and Bilaspur by communication dated 18.03.2015 intimated the Jurisdictional Divisional officer that the product manufactured by them is 'zarda/jarda scented tobacco' which is entirely different from 'chewing tobacco'. It was also intimated that the nomenclatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty payable had been determined on the basis of the deemed capacity of production Under Rule 6(2) of the CTPM Rules. 85. On omission of Compounded Levy Scheme vide Act No. 14 of 2001 Section 3A of the CE Act, was again inserted by Act 18 of 2008, hence 'chewing tobacco' was notified Under Section 3A by Notification No. 10 of 2010 dated 27.02.2010. From time to time, several Notifications were issued increasing rate of duty for 'chewing tobacco', unmanufactured tobacco. Notification No. 4 of 2015 dated 01.03.2015 was issued notifying the deemed capacity of production per packing machine per month, on the same day on which Notification No. 5/2015 was issued. Subsequently, by Notification No. 25/2015 dated 30.04.2015 came to be issued under which the rate of duty per packing machine per month was notified which was based on packing speed. The differential duty between 'chewing tobacco' and 'zarda/jarda scented tobacco' was not only vast but also huge. The following table is the mirror to this fact : Period Chewing Tobacco Zarda/Jarda Scented Tobacco Relevant Notification Prior to 01.03.2015 Same Same w.e.f. 01.03.2015 38.64 lakhs per packing machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ', w.e.f. 16.01.2016. The Deputy Commissioner in his Order dated 13.01.2016 justified the reclassification on account of discovery of the fact that similar manufacturer i.e, M/s. Dharampal Satyapal was manufacturing the same product with identical manufacturing process and classifying the product as 'zarda/jarda scented tobacco'. Subsequent order came to be passed on 17.02.2016 correcting the next declaration dated 11.02.2016 w.e.f. 18.02.2016, after affording a personal hearing. 89. The Revenue had also issued two show cause notices pertaining to the goods manufactured at two different factories of the Assessee. Show cause dated 04.05.2016 was issued for the factory located at 1D, A-34/35, Sector 60, NOIDA (hereinafter referred to as 1D factory ) and show cause notice of same date was also issued for the factory located at 6A, A-34/35, Sector 60, NOIDA (hereinafter referred to as 6A factory ). An Addendum dated 09.02.2016 was made to the show cause notices wherein reliance on CRCL reports were placed regarding the characteristics of the product. Under both the show cause notices, differential duty for the period May 2015 to January 2016 which was short paid on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. 94. He would elaborate his submissions by contending that the issue of classification is an independent issue in itself and no decision on the classification can be taken in a matter concerning the approval of declaration Under Rule 6 of the CTPM Rules. He would also contend that the description of a product as declared under the declaration filed Under Rule 6 cannot be changed by the Revenue when the product has been sold and marketed under a particular heading. He would contend that under the CETA, there is no definition of 'chewing tobacco' and 'zarda/jarda scented tobacco' and therefore the test lies in the market understanding of the product and the same would prevail. He would further contend that Under Rule 6 of CTPM Rules, the authority would only consider the number of machines installed in the factory and production capacity of the same and it was not open to him to examine the correct classification of the product. In support of his submissions, he has relied upon the following judgments: (i) ITC Ltd. v. Commissioner (2019) 17 SCC 46. (ii) HPL Chemicals Ltd. v. CCE, Chandigarh 2006 (197) ELT 324 [SC] (iii) Mauri Yeast India Pvt. Ltd. v. State of U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssification/ declaration which was approved pursuant to intentional misdeclaration and wilful suppression. To conclude her arguments, she would submit that the adjudicating authority and the tribunal have considered the factual matrix and arrived at a well- reasoned conclusion based on the characteristics of the product, the test reports applying the commercial parlance, admission of the Assessee, and the definitions found in IS glossary and existing precedents. Hence, by relying upon the following Judgments she has sought for dismissal of the appeals: (i) CCE v. Cotspun (1999) 7 SCC 633 (Para 14, 15) (ii) Vivek Narayan Sharma v. Union of India 2023 (3) SCC1 (iii) Hindustan Poles Corpn. v. CCE (2006) 4 SCC 85 (iv) Mishra Zarda Traders v. State of Orissa 1987 SCC Online 363 (v) Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC17 ISSUES FOR CONSIDERATION 96. Having heard the learned advocates appearing for the parties and after bestowing our anxious consideration to the rival contentions raised at the bar the following points/questions would arise for our consideration: (1) What is the purpose of the declaration filed Under Rule 6 of CTPM Rules? (2) What are the parameters which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory; (ii) the number of packing machines out of (i), which are installed in his factory; (iii) the number of packing machines out of (i), which he intends to operate in his factory for production of pouches of notified goods with lime tube and without lime tube, respectively, with effect from the 8th day of March, 2010; (iv) the number of multiple track or multiple line packing machine available in his factory; (v) the number of multiple track or multiple line packing machines out of (iv), which are installed in his factory; (vi) the number of multiple track or multiple line packing machines out of (iv), which he intends to operate in his factory for production of pouches of notified goods without lime tube and with lime tube, respectively, with effect from the 8th day of March, 2010; (vii) the name of the manufacturer of each of the packing machine, its identification number, date of its purchase and the maximum packing speed at which they can be operated for packing of pouches of notified goods, with lime tube and without lime tube, of various retail sale prices; (viii) description of goods to be manufactured including whether unmanufactured tobacco or chewing tobacco or both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of notified goods as prescribed or specified Under Sub-rule (i) to (x) and on receipt of such declaration the jurisdictional Deputy Commissioner or the Assistant Commissioner of Central Excise, namely, the Competent Authority, would approve the declaration and determine and pass orders concerning the annual capacity within three working days after making such inquiry as may be necessary including physical verification. The first proviso to Rule 6 of CTPM mandates that the authorised officer may direct modifications of the details as prescribed thereunder. The perusal of the second proviso would indicate that if the manufacturer does not receive the approval in respect of his declaration within the said period of 3 working days, the approval shall be deemed to have been granted subject to the modifications, if any, which the authorised officer as the case may communicate not later than 30 days of the filing of such declaration. 101. Learned Counsel appearing for the Assessee has raised a contention that since the classification of the product being disputed by the Revenue, the burden lies upon the Department and it is beyond the scope of Rule 6(2) and suggested change of classific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing premise: (3) ECC No: (4) Address of other premises manufacturing the same products : (5) Number of single track packing machines available in the factory: (6) Number of packing machines out of (5), which are installed in the factory: (7) Number of packing machines out of (5), which the manufacturer intends to operate in his factory for production of pouches of notified goods with lime tube and without lime tube, respectively: (8) Number of multiple track or multiple line packing machine available in the factory: (9) Number of multiple track or multiple line packing machines out of (8), which are installed in the factory: (10) Number of multiple track or multiple line packing machines out of (8), which the manufacturer intends to operate in his factory for production of pouches of notified goods with lime tube and without lime tube, respectively: (11) Name of the manufacturer of each of the packing machine, its identification number, date of its purchase and the maximum packing speed at which the machines can be operated for packing of notified goods, with lime tube and without lime tube, of various retail sale prices: (12) Description of goods to be manufactured including wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating the declaration filed, the issue of classification would not fall within the domain of the adjudicating authority Under Rule 6(2). In the event, that there has been improper classification of the notified goods the adjudicating authority would be empowered to rectify the misclassification, all the more, in a situation where it has been misclassified with an intention to evade a higher rate of duty. It is in the teeth of the same, that the expression inquire, determine and pass order will acquire great significance Under Rule 2(c). The declaration which is required to be filed Under Rule 6(1) by a manufacturer is of notified goods . The said notified goods means as defined Under Rule 2(c) which reads as under: (c) notified goods means unmanufactured tobacco, bearing a brand name, and chewing tobacco notified Under Sub-section (1) of Section 3A of the Act by the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 10/2010-Central Excise (N.T.), dated the 27th February, 2010; 105. From time to time, the notified goods came to be included or excluded, which power vested with the rule-making authority and there cannot be any quarr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be in a position to ascertain the correct classification under the tariff head and consequently would not be able to determine the annual capacity of the production of the notified goods, which may lead to improper calculation. This is more so, for every notified product may not possess similar ingredients as that of the other product. It is trite law that changes in the ingredient of a product can bring about change in the production capacity, namely, affect the manufacturing process. Thus, in the event of mis-description, wrong description or erroneous description or intentional improper classification of the product manufactured would not tie the hands of the Competent Authority from piercing the corporate veil to ascertain the true nature of the product and reclassify the same, necessarily after affording an opportunity of hearing which would be in compliance of the doctrine of natural justice. The object sought to be achieved by this Rule is to empower the Department to determine the annual capacity based on the declaration of the Assessee and such declaration would not be required to be accepted in the event of there being an improper description of the goods or produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority allowed the appeal and confirmed the demand. On appeal, the tribunal held the revised assessment could be made effective only prospectively, namely, from the date of show cause notice, not earlier. This Court took note of the fact that the Assessee was required to file before the appropriate Excise Officer, for approval, a list of the goods that he proposes to clear and the said list indicated that details to be found in such approval list filed before the Appropriate Authority which not only include the description of the goods produced or manufactured by the declarant but also provided the tariff entry under which the goods that the declarant intends to remove would fall and the rate of duty leviable thereon, apart from other particulars, as prescribed Under Sub- Rule (2) of Rule 173-B. It is these details which had been furnished by the Assessee in Cotspun's case (supra) which had been accepted and while justifying its demand of reclassification, would operate retrospectively by relying upon Rule 10 of the Central Excise Rule, 1944, which is similar to the contention raised in the present case. However, this contention did not find favour by this Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notified goods. In the instant case, 'zarda/jarda scented tobacco' was specified as notified goods Under Section 3A by Notification No. 17 of 2010 dated 13.04.2010 and the CTPM Rules also correspondingly had been amended on the same day i.e., 13.04.2010 by Notification No. 18 of 2010. Thus, taking into within its sweep the said 'notified goods' as defined Under Rule 2(c) of CTPM Rules for the purposes of classification and this exercise undertaken by the Competent Authority cannot be found fault with. Hence, we record our finding on the questions formulated hereinabove as under: (1) What is the purpose of the declaration filed Under Rule 6 of CTPM Rules? ANSWER: To ascertain the details of the product to be manufactured and the nature of the product for purposes of fixing the packing capacity of the machine and determine the duty. (2) What are the parameters which are required to be examined, determined, and adjudicated Under Rule 6 by the Prescribed Authority? ANSWER: To inquire and determine the correctness of the details furnished under the declaration, namely, Form No. 1. (3) Whether the Competent Authority have the power and jurisdiction to determine the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67,556/-. On perusal of the case papers and after hearing the learned advocates appearing for the parties, we notice that the tribunal has failed to examine this issue. Hence, on the short ground of tribunal having not examined this issue, the appeal deserves to be allowed. Accordingly, Civil Appeal arising out of Diary No. 3487 of 2020 is allowed and the matter is remitted to the tribunal for adjudication de novo on merits. We have not expressed any opinion on merits, and contentions of both the parties on the issue of abatement is kept open. V. COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX v. M/S TEJ RAM DHARAM PAUL - CIVIL APPEAL No. 3596 OF 2023 BRIEF FACTS 114. The period of dispute in this group is May 2015 to December 2015. The Assessee claims the product to be classified under CET SH 2403 9910 i.e., 'chewing tobacco', whereas the Revenue contends that the product ought to have been classified under CET SH 2403 9930 i.e., 'zarda/jarda scented tobacco'. Coming to the facts of this appeal, the Assessee submitted Form No. 1 before the jurisdictional Central Excise Division declaring that they would manufacture 'Mahapasand Zarda/Jarda Scented Tobacco' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue relating to the classification was pending since the show cause notice dated 01.07.2016 had already been issued and it was yet to be decided vide order dated 06.12.2016. Aggrieved by the same an appeal was filed before the tribunal and tribunal held that issue of classification was open and it was to be decided by the adjudicating authority. Subsequently, OIO came to be passed on 18.03.2021, confirming the duty demand and further ordered for appropriation of the amount specified thereunder, apart from imposing of penalty. Being aggrieved by the same, appeal was filed before the tribunal which came to be allowed and the order dated 18.03.2021 was set aside. Hence, this appeal by the Revenue. SUBMISSIONS OF THE PARTIES 117. Ms. Nisha Bagchi, the learned Counsel for the Revenue, criticized the tribunal's decision, arguing that it did not examine the definitions in the IS glossary and ignored the CRCL report dated 14.12.2015. She argued that adding scent to Zarda would change the product's character to 'zarda/jarda scented tobacco'. Ms. Bagchi also cited the Assessee's representative's statements and the fact that the product was previously classified as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel appearing for the parties and on perusal of the record it would emerge therefrom that the Form No. 1 dated 05.03.2015 submitted by the Assessee before the jurisdictional Central Excises Division, Kundli, it had declared that they were manufacturing 'Mahapasand zarda/jarda scented tobacco'. On 17.03.2015, Form No. 2 was submitted by the Assessee for the period 10.03.2015 to 31.03.2015, and duty was paid for the said period as per declaration in Form No. 1. On 13.05.2015 the Department by Panchnama on the same date, drew samples of the product of the Assessee's product i.e., 'Mahapasand zarda/jarda scented' manufactured and forwarded the same to CRCL who by the opinion dated 23.05.2015 opined as under: TEST REPORT: The sample is in form of brown coloured dried pieces of vegetable matter. It is a preparation containing tobacco, lime and flavouring agents. It is other than Jarda Scented Tobacco. It has the characteristic of Khaini . 120. Based on the said report the Department by communication dated 27.04.2015 informed the Assessee, the product being manufactured by the Assessee is classifiable under Chapter sub-heading 2403 9910 as 'chewing tobacco (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises, obtained the CRCL Report, and called upon the Assessee to reclassify its product as 'chewing tobacco' under CET SH 2403 9910 and accordingly the Form No. 1 was filed by the Assessee and duty paid in tune with the declaration filed. It is only after Notification No. 25 of 2015 came to be issued revising the duty payable on 'zarda scented tobacco' that fresh samples were drawn, and the Revenue started singing a new tune, and thus called upon the Assessee to declare the product manufactured by it as 'zarda scented tobacco'. In the light of communication dated 27.04.2015 by the Revenue addressed to the Assessee and calling upon the Assessee to classify its product as 'chewing tobacco' and the same having been complied by the Assessee it is too late in the day for the Department to take a contrary stand. 122. The order of the tribunal has taken into account the aforestated aspects to arrive at a conclusion that the declaration filed by the Assessee is just and proper, which does not suffer from any infirmity either on facts or on law calling for our interference. Hence, the appeal filed by the Department deserves to be rejected. VI. COMMISSIONER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the tribunal was successful and it was held that the product manufactured by the Petitioner was 'chewing tobacco'. Hence, the Revenue is in appeal. SUBMISSIONS OF PARTIES 125. Ms. Nisha Bagchi, learned standing counsel for the Revenue, would contend that post facto declaration by the Assessee would not be valid in view of Rule 6,7,9 of CTPM Rules. She would contend that the Assessee in its declaration had clearly declared the product in manufactured by it as, zarda scented tobacco, based on which the duty would be payable. The tribunal committed an error in proceeding on the basis that it is the case of the Revenue that Assessee had manufactured Zarda by showing the same as CT though the Assessee itself had declared manufacturing of zarda product. She would submit that the statutory provisions do not provide any definition of the two competing terms and the goods would be classified as per general commercial parlance. She would further contend that the Assessee had failed to demonstrate cogent evidence, that it manufactured chewing tobacco during the relevant period. Hence, she prays for the appeal being allowed. 126. The learning counsel appearing for the Assessee wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us to inevitable conclusion apart from other reasons as discussed above, that the product in question is admittedly chewing tobacco and not Jarda scented tobacco. 130. The aforesaid conclusion arrived at by the tribunal is just and proper based on appreciation of factual matrix which would not call for interference. Hence the appeal is dismissed. VII. COMMISSIONER OF CENTRAL EXCISE ST ALWAR v. TARA CHAND NARESH CHAND [C.A No. 959 OF 2019] BRIEF FACTS 131. In the last group, in this batch of appeals before this Court, the Revenue is calling in question the order dated 28.03.2018 passed by CESTAT in Excise Appeal No. 51953 of 2017 whereunder the order dated 27.09.2017 passed by the Commissioner of Central Excise classifying the product manufactured by the Respondent-Assessee as 'chewing tobacco' falling under CET SH 2403 9910, as against the claim of the Revenue of the said product falling under CET SH 2403 9930. 132. The Respondent Assessee had filed Form 1 declaring the product manufactured by it as 'zarda/jarda scented tobacco' which came to be adjudicated and accordingly an order came to be passed by the Deputy Commissioner, whereunder the product of the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomers to conclude that the product is 'zarda/jarda scented tobacco'. She would submit that the tribunal erroneously applied the principles laid down in Urmin products and Flakes N Flavours without applying its mind to the present case. She would contend that the tribunal has merely relied upon the communication of the superintendent of excise whereunder the assesses's prayer to classify the product as 'zarda/jarda scented tobacco' had been rejected and classified the same as 'chewing tobacco' to set aside the order in original which classified the product manufactured by the Assessee as 'chewing tobacco'. 135. She would submit that there can be no dispute to the proposition that there cannot be estoppel in taxation proceedings and Section 11A of the CE Act, which permits demand within a normal period of limitation. Hence, she seeks for the appeal to be allowed. 136. Per contra, Shri A.R. Madhav Rao, learned Counsel appearing for the Respondent-Assessee would contend that there can be no short levy for the past period, particularly in the present case, since the declaration filed by the Assessee was approved. He would further contend that no appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he would contend that filing of the returns would be applicable to notified goods Under Section 3A and said returns are required to be scrutinized and assessed by which process there would be verification of the product manufactured by the Assessee and classification of the same. Hence, by relying upon the following judgments he prays for the dismissal of the appeal. a) Collector of Central Excise, Baroda v. Cotspun Ltd. (1999) 7 SCC 633 b) Union of India v. Delhi Cloth and General Mills 1963 Supp. 1 SCR 586. c) Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. (1989) 1 SCC 150 d) Coastal Paper Ltd. v. Commissioner of Central Excise, Vishakhapatnam (2015) 10 SCC 664 e) Parle Agro Pvt. Ltd. v. Commissioner of Commercial Tax, Trivandrum (2017) 7 SCC 540 f) Damodar J. Malpani and anr v. Collector of Central Excise (2004) 12 SCC 70 DISCUSSION AND FINDINGS 137. We have heard the learned advocates appearing for the parties and perused the records. At the outset, we would like to make it explicitly clear that the tribunal though has relied upon the judgment of Urmin and Flakes-n-flavourz, apart from assigning other reasons, in the facts and circumstances obtained in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /jarda scented tobacco' and clearing it as 'chewing tobacco', and on facts it was found that there were additives added to the tobacco. In the said case this Court on facts held that there was no wilful suppression attributable to the assesssee and the Revenue had failed to establish the product as 'zarda scented tobaccot'. 139. In the instant case the Assessee had clearly declared his product as 'zarda/jarda scented tobacco' falling Under Sub-heading 2403 9930 in Form 1 filed and based on the said declaration, capacity determination order dated 04.03.2015 Under Rule 6(2) had been passed re-classifying the product as 'chewing tobacco'. Accordingly, for the period April 2015 in Form-1 the Assessee had described the product as 'Jayanti Zarda Scented- 2403 9910'. However, in the capacity determination order dated 05.05.2015, the Deputy Commissioner classified the goods as 'chewing tobacco'. As such, there was no misstatement or suppression of facts, collusion, or fraud in the instant case and hence on facts, the principles enunciated in Urmin's case is distinguishable. It may be noted that this Court in the case of CCE v. Damnet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that on 04.03.2015 the Respondent- Assessee sought to make a change in the registration certificate and claimed that the product manufactured by it was zarda/jarda. However, the Appellant-Revenue called upon the Respondent to withdraw the application for registration as 'zarda' and to show it only as 'chewing tobacco' and thereafter application showing the product as 'chewing tobacco' came to be filed on 06.07.2015, and accordingly said application was allowed on 23.07.2015 vide annexure A-45 (volume II of the counter affidavit). Thus, the registration certificate itself reflects the product as 'chewing tobacco'. This Court in the case of CCE v. Tata Tech Ltd. (2008) 11 STR 449 (SC) has held; there cannot be a demand against the classification under which the product is registered without undoing the classification of the product in the registration certificate . 142. For the reasons aforestated we are of the considered view that the findings of the tribunal warrant no interference by this Court and the appeal has to fail. 143. We place on record our deep appreciation for the able assistance rendered by the learned Counsel appearing for the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X
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