Excise Duty on Chewing Tobacco

[Mehul Pandya]

Sir,

If any one manufactures hand made chewing tobacco which falls under CETCH - 2403 9910 and packs the same in small printed pouches manually without using any machinery than do he required to take Excise registration or he can claim SSI exemption. If no, how to calculate and discharge the duty on the same.

[KASTURI SETHI]

Sh.Pandya Ji,

Your product is covered under SSI exemption Notification No.8/2003-ST dated 1.3.2003 as amended (Serial no.xiii of Annexure to the notification). Other than those bearing a brand name is eligible for exemption. Its packing/repacking/labeling/rebelling amounts to manufacture under Section 2 (f)(iii) of Central Excise Act, 1944. It is covered at serial no.27 of the Third Schedule to Central Excise Act, 1944 (Deemed Manufacture). Regarding rate of CE duty see Notification No.16/16-CE dated 1.3.2016 as amended vide [M.F. (D.R.) Corrigendum F. No. 334/8/2016-TRU, dated 30-3-2016]

[Mehul Pandya]

Thank you sir,

Can he avail SSI exemption using his own brand and not others ? Is there any specific clause that the tobacco products are not eligible for SSI exemption.?

[KASTURI SETHI]

This judgement disallows SSI exemption even against its own brand name. Crucial clause remains the same till now.

COMMISSIONER OF C. EX., GUNTUR Versus VIRAT CRANE INDUSTRIES LTD. 2015 (11) TMI 1414 - SUPREME COURT

 

 

 

[KASTURI SETHI]

There is no specific clause which disallows SSI exemption to 2403 9910. 2403 is in the list of eligible goods mentioned in Annexure to SSI Exemption notification.

[Mehul Pandya]

I read this in a book. Now I am confused, whether to take SSI exemption or not because here they have not mentioned any specific tariff heading.

[KASTURI SETHI]

This judgement is very old and based on a notification no.1/93-CE dated 28.2.2003 which has been amended from time to time so many times. Go by the latest notification.

AI Summary

SSI exemption for chewing tobacco: packaging as manufacture affects eligibility; follow latest exemption notification for guidance practitioners Whether a small-scale producer of hand-made chewing tobacco must register or can claim SSI exemption depends on whether packing/repacing/labeling is treated as deemed manufacture. The product is listed in the SSI exemption annexure, but packing performed manually amounts to manufacture under the statute and invokes the deemed-manufacture entry; eligibility should be determined by reference to the latest SSI exemption notification and the current excise duty notification.