Customs, Excise and Gold Tribunal - Delhi
Sona Udyog Ltd. vs Commissioner Of Central Excise on 14 November, 2000
Equivalent citations: 2001(73)ECC211, 2001(128)ELT137(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. These are two appeals - one filed by M/s. Sona Udyog Ltd. and the other filed by M/s. Bombay Snuff Company. In both these appeals, the matter relates to the classification of the product, which the manufacturers claimed to be the preparation containing snuff of tobacco classifiable under sub-heading No. 2404.60, while the jurisdic-tional central excise authorities considered the same as snuff of tobacco classifiable under sub-heading No. 2404.50 of the Central Excise Tariff. Both were heard together on 21-9-2000 and are being disposed of by this common order.
2. The Asstt. Commissioner of Central Excise, Bhandara, who adjudicated the matters, had come to a finding that the product manufactured by M/s. Sona Udyog Ltd. and M/s. Bombay Snuff Company was nothing but snuff of tobacco and that mere addition of flavour etc. will not change the essential characteristic of the product. He also referred to the specific description of the product under sub-heading No. 2404.50 of the Central Excise Tariff, and applying the test of trade parlance held that the correct classification of the product in question was snuff of tobacco classifiable under tub-heading No. 2404.50 of the Central Excise Tariff. The order passed by the Asstt. Commissioner, Central Excise, Bhopal was upheld by the Commissioner of Central Excise (Appeals), Bhopal.
3. The matter was heard on 21-9-2000 when Shri J.S. Agarwal, Advocate submitted that the matter was already covered by the Tribunal's decision in the case of Lachhman Dass Behari Lal v. CCE, New Delhi -1994 (71) E.L.T. 728, and other decisions of the Tribunal. In reply, Dr. Rabinder Babu, JDR relied upon the arguments of the Commissioner of Central Excise (Appeals) in upholding the order passed by the Asstt. Commissioner of Central Excise, Bhandara, the adjudicating authority.
4. We have carefully considered the matter. The appellants were bringing duty paid snuff in bulk from outside. Certain flavours such as perfume, synthetic oil, essential oil and menthol, etc. were mixed with the bought-out snuff. The goods were then sealed and kept for sometime before packing in consumer packs and labelling for sale.
5. We find that the matter is covered in favour of the appellants by a series of decisions of the Tribunal.
6. In the case of Lachhman Dass Behari Lal v. CCE, New Delhi - 1994 (71) E.L.T. 728 (Tribunal), the snuff of tobacco falling under sub-heading No. 2404.50 was manufactured by grinding tobacco in various forms. Thereafter it was fermented with lime water and was then dried. After necessary colouring, oil mixing and sieving, it was sold in bulk as snuff. The Tribunal observed that at this stage, the goods were classifiable under sub-heading No. 2404.50. For retail sale, this snuff of tobacco procured in bulk was subjected to further processing like adding perfume and menthol and mixing of the resultant material properly. This was then sieved. The final product was packed in different sizes and labelled for sale. By a majority order, it was held that the final product obtained in the above manner was classifiable under sub-heading No. 2404.60 as preparations containing snuff of tobacco. The snuff sold in bulk was considered as the raw snuff classifiable under subheading No. 2404.50. The final product packed and labelled in consumer packs was considered as preparations containing snuff of tobacco classifiable under sub-heading No. 2404.60.
In Khetu Ram Bishamber Das v. CCE, New Delhi - 1997 (92) E.L.T. 631 (Tribunal), the appellants were engaged in the manufacture of flavoured snuff, a preparation made out of raw snuff of tobacco on which the duty had already been paid under sub-heading No. 2404.50. The appellants packed the said preparation made out of snuff of tobacco and labelled the containers for sale to the consumers. Following the Tribunal's decision in the case of Lachhman Dass Behari Lal v. CCE, New Delhi -1994 (71) E.L.T. 728 (Tribunal), it was held by the Tribunal that the preparation made out of raw snuff of tobacco was classifiable under sub-heading No. 2404.60 of the Central Excise Tariff.
We find that similar view has been taken by the Tribunal in the following cases :-
(1) Commissioner of Central Excise, Chandigarh v. Khetu Ram Bishamber Das -1998 (103) E.L.T. 653 (Tribunal).
(2) Khetu Ram Bishamber Das v. CCE, New Delhi - 1999 (107) E.L.T. 808 (Tribunal).
(3) Collector of Central Excise, Chandigarh v. Dena Snuff Pvt. Ltd. -2000 (115) E.L.T. 642 (Tribunal).
7. Revenue's appeal against the Tribunal's decision in the case of Lachhman Dass Behari Lal v. CCE, New Delhi -1994 (71) E.L.T. 728 (Tribunal) had been admitted by the Hon'ble Supreme Court as reported in 1996 (86) E.L.T. A217. The report as appearing at page A217 of (86) E.L.T. is extracted below :-
"The Supreme Court Bench comprising of Hon'ble Mr. Justice J.S. Verma and Hon'ble Mr. Justice B.N. Kirpal on 2-4-1996 has admitted the Civil Appeal Nos. 1440-1441 of 1996 filed by Collector of Central Excise, New Delhi against the CEGAT Misc. Order No. M-70/92-D and Final Order Nos. E/103 & 104/94-D, dated 28-2-1994 and reported in 1994 (71) E.L.T. 728 (Tribunal) (Lachhman Dass Behari Lal v. Collector of Central Excise).
The Appellate Tribunal by a majority decision in its order in question had held that the raw snuff being subjected to various processes and flavouring substances and menthol added to it before retail packing, such process amounts to manufacture and the goods in question would be classifiable under subheading No. 2404.60 of the Central Excise Tariff as preparation containing snuff of tobacco."
There is nothing on record to show whether the Tribunal's order aforesaid had been stayed by the Hon'ble Supreme Court. The final outcome of the civil appeal had not also been placed before us by either side.
8. In these circumstances, following the Tribunal's decisions referred to above, we do not agree with the view of the ld. Commissioner of Central Excise (Appeals). As a result, both the appeals are allowed. The consequential benefit, if any, will however be subject to the law of unjust enrichment and the Supreme Court's decision in the case of Mafatlal Industries Ltd. v. Union of India -1997 (89) E.L.T. 247 (SC).
9. With these observations, both the appeals are allowed. Ordered accordingly.