2018 (9) TMI 561 - AT - Central Excise

Tribunal rules on tobacco classification, emphasizes consistency and accurate verification

The Tribunal ruled in favor of the appellant, finding that the product should be classified as 'chewing tobacco' before February 2016 and as 'zarda ... Classification of goods - Chewing Tobacco - whether 'chewing tobacco' classifiable under heading 24039910 or as 'zarda scented tobacco' (24039930)? - Period from 05.06.2015 to 14.07.2015 and from 15.07.2015 to 26.01.2016 - Held that:- The test report is prima facie appears to be in favor of the appellant as the product consist of tobacco without any scent prior to February, 2016 and with flavourant subsequent to February, 2016. Revenue has attempted to classify this product under 'zarda scented tobacco' (24039930) scent which is not sustainable in view of the order passed by this Tribunal in the case of Tara Chand Naresh Chand vs. CCE&ST, Alwar [2018 (4) TMI 221 - CESTAT NEW DELHI] wherein the classification of the product manufactured by the appellant (TCNC) has been classified under heading 24039910. Appeal allowed - decided in favor of appellant. Issues:Classification of product as 'chewing tobacco' or 'zarda scented tobacco'; Refund claim rejection as pre-mature due to pending classification decision.Analysis:The case involves an appeal against the Order-in-Appeal regarding the classification of a product manufactured by the appellant. The main issue is whether the product should be classified as 'chewing tobacco' under heading 24039910 or as 'zarda scented tobacco' under 24039930 for the period of dispute from 05.06.2015 to 26.01.2016. The department conducted tests on samples of the product, with reports indicating the composition of tobacco, lime, and flavorants. The appellant claimed that flavorants were added post-February 2016, relying on a previous Tribunal decision distinguishing between flavorants and scent. The Assistant Commissioner rejected the refund claim as premature due to pending classification. The Revenue argued that the case was not finalized, and a show cause notice on classification was pending, justifying the rejection of the refund claim.Upon careful consideration, the Tribunal found the test reports favored the appellant, showing the product contained tobacco without scent before February 2016 and with flavorants thereafter. The Revenue's attempt to classify the product as 'zarda scented tobacco' was deemed unsustainable based on a previous Tribunal order classifying a similar product under a different heading. The Tribunal directed the Revenue to verify the appellant's claims and the status of the previous order, emphasizing the need for consistent treatment based on similar circumstances. The Tribunal scheduled a follow-up for further proceedings.In conclusion, the Tribunal's decision highlighted the importance of accurate classification based on product composition and previous precedents. The case underscores the significance of thorough analysis and consistency in applying legal principles to ensure fair treatment and resolution of classification disputes.