2009 (12) TMI 138 - SC - Central Excise

Supreme Court Remands Pan Masala Classification Decision, Stresses Central Excise Tariff Act

COMMISSIONER OF C. EX., INDORE Versus GAHOI FOODS PVT. LTD.

The Supreme Court set aside the Tribunal's order regarding the classification of 'Pan Masala containing tobacco' under tariff entries, emphasizing the ... Classification- The issue which arose for determination before the Tribunal in this batch of Civil Appeals was concerning classification of “Pan Masala containing tobacco” during the period November, 2000 to February, 2001. Department contending for classification under sub-heading 2106.00 of Central Excise Tariff Act as read with Chapter Note 3 of Chapter 21, while assessee holding classification under sub-heading 2404.40 as chewing tobacco and preparation containing chewing tobacco. Tribunal in impugned order not analysed aforesaid entries in context of classification and merely quoted in the judgment of Kothari Products Ltd. passed in context of A.P. General sales Tax Act- said judgment not applicable. Held that- the afore-stated reasons, without expressing any view on the merits of the case, we hereby set aside the impugned order of the CESTAT and we remit the cases to the CESTAT for de novo consideration in accordance with law. Since the matter is an old matter, we request the Tribunal to expeditiously hear and dispose of this batch of cases preferably within six months from today. The Civil Appeals are, accordingly, allowed. No order as to costs. Issues: Classification of 'Pan Masala containing tobacco' under relevant tariff entries during a specific period.Analysis:1. The issue before the Tribunal was the classification of 'Pan Masala containing tobacco' between November 2000 and February 2001.2. The Department argued that the product fell under Entry 2106.00 of Chapter 21, defining Pan Masala as containing betel nuts, lime, katha, and tobacco.3. The assessee(s) contended that their product should be classified under Entry 2404.40, pertaining to chewing tobacco and preparations containing it.4. The Tribunal's judgment lacked an analysis of the tariff entries, only referencing a previous case unrelated to the present issue.5. The Supreme Court clarified that the case at hand involved interpreting the Central Excise Act's tariff entries, not the Sales Tax Act as in the referenced case.6. Notably, Chapter 21 defined Pan Masala to include preparations containing tobacco, emphasizing the need for a thorough examination of the Central Excise Tariff Act.7. Consequently, the Supreme Court set aside the Tribunal's order and remanded the cases for fresh consideration, urging expedited resolution within six months.8. The Civil Appeals were allowed without any costs awarded, emphasizing the need for a detailed analysis based on the Central Excise Tariff Act for proper classification.