Tribunal upholds Commissioner's decision on classification issue, directs adjudication

The Tribunal upheld the Commissioner's decision to keep the classification issue open for adjudication through the pending show cause notice. The Commissioner was directed to proceed with the adjudication, allowing both parties to present evidence and the respondent to contest the proposed classification. The appeal filed by the Revenue was disposed of accordingly.

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Issues:
Classification of manufactured product - Chewing Tobacco or Jarda Scented Tobacco under CETA, 1985.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner (Appeals), New Delhi regarding the classification of the product manufactured by the respondent. The respondent was engaged in manufacturing and packing Jarda Scented tobacco and Chewing Tobacco. The respondent had filed declarations under Rule 6 of the Chewing Tobacco and Manufactured Tobacco Packing Machines Rules, declaring the product as Chewing Tobacco without lime tubes. Samples were drawn and sent for testing which revealed the product as Jarda Scented Tobacco. The jurisdictional Deputy Commissioner issued orders rejecting the declared product as Chewing Tobacco. The respondent challenged these orders before the Commissioner of Central Excise (Appeals) (Para 2).

The Ld. Commissioner (Appeals) observed that the issue of classification was pending adjudication through a show cause notice dated 1-7-2016 and deemed the appeals premature and infructuous. The Revenue challenged this finding, contending that the classification had already been decided by the Deputy Commissioner. The respondent sought a fair opportunity to rebut the allegation that their product was not Chewing Tobacco. The central dispute was whether the product was Chewing Tobacco without lime tube or Jarda Scented Tobacco (Para 3-6).

The Tribunal found that the central dispute revolved around the classification of the commodity manufactured by the respondent. The Revenue argued that the classification had been determined by the Deputy Commissioner, while the respondent contested this classification. The Tribunal noted that the respondent had challenged the classification but not the capacity determination of the machines. The show cause notice proposed the classification as Jarda Scented Tobacco. The Tribunal upheld the Commissioner's decision to keep the classification issue open for adjudication through the pending show cause notice (Para 8-11).

The Tribunal directed the Commissioner to proceed with the adjudication of the show cause notice dated 1-7-2016, allowing both sides to present evidence. The respondent was granted the opportunity to contest the proposed classification during the adjudication. The appeal filed by the Revenue was disposed of accordingly (Para 12-13).

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