2004 (7) TMI 91 - SC - Central Excise

Judgments set aside, matter remitted for fresh adjudication for failure to consider Section 35F dismissals and tobacco powder finding

SC set aside the CEGAT judgments and remitted the matter for fresh adjudication because CEGAT failed to consider whether appeals had been dismissed for ... Classification of tobacco powder - Whether tobacco powder obtained by crushing of tobacco leaves, stems, stalks and butts are classifiable under tariff sub-heading 2401.00 as un-manufactured tobacco and not classifiable as manufactured tobacco under sub-heading 2404.90 of the Schedule to the Central Excise Tariff Act, 1985? Held that:- It is undisputed that the First appeals filed by the present respondents were dismissed on the ground of non-compliance with the requirements of Section 35F of the Act. The CEGAT should have primarily considered that aspect. No finding has been recorded by the CEGAT. Additionally, we find that unlike the two cases relied upon by the CEGAT there was a categorical finding recorded on facts by the adjudicating authority that the tobacco powder obtained by crushing of un-manufactured tobacco leaves is a different commercial product having a distinct name and character. In the cases relied upon by the CEGAT it was categorically noticed that there was no material placed by the Central Excise authorities to show that a different commercial product had come into existence. In view of the undisputed position that the CEGAT did not consider the relevant aspects and proceeded to decide the appeals on merits without examining the propriety of dismissal of appeals by the Collector (Appeals) for non-compliance with the requirements of Section 35F of the Act, the impugned judgments are unsustainable and are set aside. We remit the matter back to the CEGAT for adjudication afresh in accordance with law. Issues:Classification of tobacco powder under the Central Excise Tariff Act, 1985.Analysis:The judgment involved an appeal against the classification of tobacco powder obtained by crushing tobacco leaves, stems, stalks, and butts under the Central Excise Tariff Act, 1985. The Customs, Excise and Gold (Control) Appellate Tribunal, Eastern Branch, Calcutta held that the tobacco powder should be classified under tariff sub-heading 2401.00 as un-manufactured tobacco and not as manufactured tobacco under sub-heading 2404.90. The Assistant Collector of Central Excise noticed discrepancies in duty payments and issued show cause notices. The Assistant Collector held that tobacco powder emerging from crushing un-manufactured tobacco leaves falls under sub-heading 2404.90. Appeals were made to the Collector of Central Excise (Appeals) and then to the CEGAT.The Central Excise authorities argued that tobacco powder falls under sub-heading 2404.90 based on a previous case, while the respondents relied on other decisions. The CEGAT allowed the appeals, stating that the issue was related to the applicable tariff sub-heading. The appellant contended that the CEGAT should not have delved into the merits of the case and that the factual finding of a different commercial product should not have been disturbed without evidence to the contrary. The CEGAT's reliance on previous decisions without proper discussion of factual fit was criticized.The Supreme Court emphasized the importance of considering relevant aspects and compliance with legal requirements. It noted that the CEGAT did not address the dismissal of appeals by the Collector (Appeals) for non-compliance with Section 35F of the Act. The Court found that the CEGAT's decision lacked proper examination of relevant aspects and remitted the matter back to the CEGAT for fresh adjudication in accordance with the law. The judgment was set aside, and the appeals were disposed of with no order as to costs. The Court highlighted the need to follow precedents judiciously, ensuring that decisions are based on a thorough analysis of the facts and legal requirements.