Tariff classification of tobacco turns on manufacture test and burden of proof; earlier classification did not bar reclassification.

Writ jurisdiction was held maintainable despite an available statutory remedy because the dispute involved a pure question of tariff classification on largely undisputed facts. The assessee was not estopped by an earlier classification, as there is no estoppel against law in tax matters and the Revenue must prove the proposed classification. On merits, drying, stripping and sprinkling raw tobacco with jaggery water did not amount to manufacture, since no new product with a distinct name, character or use emerged. The product was therefore treated as unmanufactured tobacco under CETH 2401 20 90, not chewing tobacco under CETH 2403 99 10.

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Issues: (i) Whether the writ petition was liable to be dismissed for non-exhaustion of alternative remedy; (ii) Whether the appellant was bound by its earlier classification or precluded from seeking reclassification; (iii) Whether the product was classifiable under CETH 2401 20 90 as unmanufactured tobacco.

Issue (i): Whether the writ petition was liable to be dismissed for non-exhaustion of alternative remedy.

Analysis: Availability of a statutory remedy does not, by itself, bar writ jurisdiction where the dispute is a pure question of law and no disputed facts require investigation. Where the controversy concerns tariff classification and the facts are substantially undisputed, relegating the assessee to the appellate forum may be futile, particularly when the writ court has already expressed a conclusion on merits.

Conclusion: The writ petition was not barred by alternative remedy and was maintainable.

Issue (ii): Whether the appellant was bound by its earlier classification or precluded from seeking reclassification.

Analysis: In tax matters there is no estoppel against law. An earlier classification, admission, or inconsistent stand does not conclude the issue if the correct legal classification is otherwise different. The burden remains on the Revenue to justify the proposed classification, and the assessee's prior stance cannot substitute for proof by the department.

Conclusion: The appellant was not bound by its earlier classification and was entitled to seek reclassification.

Issue (iii): Whether the product was classifiable under CETH 2401 20 90 as unmanufactured tobacco.

Analysis: Classification turned on whether the appellant's process amounted to manufacture. The product was only subjected to drying, stripping and sprinkling with jaggery water, without addition of flavours or other ingredients. Applying the settled test that manufacture requires emergence of a new product having a distinct name, character and use, and guided by the HSN explanatory notes on unmanufactured tobacco, the process did not transform the raw tobacco into a different commodity. The Revenue failed to discharge the burden of proving a taxable classification under the heading for chewing tobacco.

Conclusion: The product was classifiable as unmanufactured tobacco under CETH 2401 20 90 and not under CETH 2403 99 10.

Final Conclusion: The impugned classification and demand were unsustainable, and the assessee succeeded on maintainability, on the absence of estoppel, and on the substantive tariff classification issue.

Ratio Decidendi: For tariff classification, the Revenue bears the burden of proof, and a process amounts to manufacture only if it results in a new product with a distinct name, character and use; where the process merely preserves or minimally treats raw tobacco without such transformation, the product remains unmanufactured tobacco.

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