Marketable chewing tobacco remains dutiable at the intermediate stage despite later Modvat credit and packaging changes.

Unbranded chewing tobacco manufactured before packing in branded containers was treated as marketable excisable goods falling under Heading 2404.49, so the duty demand on the intermediate product was sustained. The Tribunal held that the tariff description covered plain or unprocessed chewing tobacco, and the availability of Modvat credit at a later stage did not eliminate duty on the earlier manufacture or clearance. The plea of ignorance of the Budget changes was rejected because ignorance of law is no excuse, and the suggested double burden was found misplaced since final-stage credit would only reduce the net incidence.

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Issues: Whether unbranded chewing tobacco manufactured before being packed under the assessee's brand name was marketable excisable goods classifiable under Heading 2404.49, and whether duty demand for the intermediately cleared product could be sustained despite the availability of Modvat credit and the assessee's plea of ignorance of the Budget changes.

Analysis: The Tribunal found that chewing tobacco is a wide tariff description covering even plain or unprocessed tobacco used for chewing, and that the goods manufactured before packing in branded containers were marketable and correctly classifiable under Heading 2404.49. The plea of ignorance of the law was rejected on the settled principle that ignorance of law is no excuse. The Tribunal also held that the duty structure did not eliminate the levy on the intermediate product merely because credit would be available at the final stage. The demand was not rendered unsustainable by the Modvat mechanism, and the fear of double burden was held to be misplaced because the duty incidence at the final stage would be incremental and not identical.

Conclusion: The unbranded chewing tobacco was dutiable excisable goods, and the demand confirmed by the Collector was sustainable in law.

Final Conclusion: The appeal failed on merits, and the confirmation of duty on the unbranded chewing tobacco was upheld.

Ratio Decidendi: Marketable intermediate goods falling within the tariff description remain dutiable, and the availability of set-off or credit at a later stage does not extinguish the liability to duty on the earlier stage of manufacture or clearance.

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