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of <h1>Tribunal classifies tobacco powder under Tariff Heading 24.01 as nil duty rate, penalties set aside</h1> <h3>ISWAR GRINDING MILLS Versus COMMISSIONER OF C. EX., CALCUTTA-I</h3> ISWAR GRINDING MILLS Versus COMMISSIONER OF C. EX., CALCUTTA-I - 2000 (117) E.L.T. 743 (Tribunal) Issues: Determination of classification of tobacco powder/granules manufactured from unmanufactured tobacco under sub-heading 2404.90 or Tariff Heading 24.01, imposition of duty and penalty.Classification Issue:The Tribunal considered the activity of producing tobacco powder/granules from unmanufactured tobacco by M/s. Iswar Grinding Mills. The Revenue argued for classification under sub-heading 2404.90, while the appellants contended for classification under Tariff Heading 24.01. The appellants relied on previous Tribunal decisions and Supreme Court rulings to support their classification argument.Legal Precedents:The appellants' advocate cited various Tribunal decisions, including Shri Chand Agarwal v. Collector and Shri Biswa Vijoy Industries v. Commissioner of Central Excise, to argue that the process of tobacco leaves does not constitute manufacture and should be classified under Heading 2401.00. The Tribunal noted that these decisions were considered in a recent judgment involving similar issues.Judgment and Decision:After reviewing submissions and the impugned Order, the Tribunal found that the tobacco powder fell under Heading 24.01 as unmanufactured tobacco, attracting nil rate of duty. The Tribunal emphasized that the use of the tobacco powder in different final products does not change its classification. Consequently, the demand of duty and penalty on M/s. Iswar Grinding Mills was set aside, and their appeal was allowed.Penalty Issue:Since the main appellants' appeal was allowed, the Tribunal found no justification for imposing penalties on the appellant company or other appellants under Rule 209A. Therefore, the impugned Order was set aside, and all appeals were allowed.Conclusion:With the disposal of all appeals, all Stay Petitions were automatically allowed. The Tribunal's decision favored the appellants' classification argument and resulted in the setting aside of duty and penalties imposed, ultimately allowing all appeals in the matter.
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