Tribunal: Unbranded Chewing Tobacco Subject to Duty - Ignorance not Excuse

The Tribunal determined that unbranded chewing tobacco, even before packaging, is marketable and excisable under Heading 2404.49, subject to duty. Ignorance of law was not accepted as an excuse for non-compliance, emphasizing the assessee's responsibility to comply. Duty payment was required at multiple stages, not just on the final product, as per Modvat rules. The Tribunal upheld the duty demand confirmation, denying requests to adjust duty payments between stages. The appeal was rejected, and the Commissioner's order was upheld.

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Issues Involved:
1. Marketability and excisability of unbranded chewing tobacco.
2. Ignorance of law as an excuse for non-compliance.
3. Requirement to pay duty at multiple stages.
4. Calculation and confirmation of duty demand.

Summary:

1. Marketability and Excisability of Unbranded Chewing Tobacco:
The primary issue was whether the chewing tobacco manufactured by the appellants before being packed in containers bearing a brand name was a manufactured excisable product. The Tribunal held that the preparation of chewing tobacco, even before being packed in branded containers, was marketable and excisable goods appropriately classifiable under Heading 2404.49. The Tribunal noted that both plain and prepared chewing tobacco fall under this category, making them subject to duty.

2. Ignorance of Law as an Excuse for Non-Compliance:
The appellants argued that the changes introduced in the Budget 1994 and thereafter were not known to them or the department, leading to non-compliance. The Tribunal rejected this argument, citing the maxim "ignorance of law is no excuse" and referencing the High Court of Madras's decision in Assistant Collector of Central Excise, Madras v. Nagappa Chettiar, which emphasized that the responsibility to comply with the law rests on the assessee.

3. Requirement to Pay Duty at Multiple Stages:
The appellants contended that there was no short levy since duty was paid on the final product, and the provisions of Rule 9 or Rule 49 ensured duty payment only at the stage of the final product. The Tribunal disagreed, stating that even under the Modvat rules, duty paid on dutiable inputs is set off at the time of clearance of the final product. The Tribunal found that the appellants were required to pay duty on the unbranded chewing tobacco, which they had failed to do.

4. Calculation and Confirmation of Duty Demand:
The Tribunal upheld the Collector's order confirming the duty demand, noting that the duty demanded, when paid by the appellants, would entitle them to take credit thereof when clearing their final goods. The Tribunal rejected the appellants' request to either deem the duty paid on the final products as paid on the intermediate product or order a refund of the duty already paid on the final products. The Tribunal clarified that the value of unbranded tobacco is not 15% of the branded tobacco but about 85% after remission for packing charges, meaning the duty payable at two stages cannot be the same.

Conclusion:
The Tribunal found no merit in the appellants' contentions and upheld the Commissioner's order, rejecting the appeal.

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