TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 461
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....cise Act specified chewing tobacco and preparations containing chewing tobacco falling under Heading 2404.41 for the purpose of assessment based on MRP. 5. With effect from 28-2-05, eight digit tariff replaced the existing six digit tariff. This change was brought out by the Central Excise Tariff (Amendment) Act, 2004. Under the 8 digit tariff, the heading No. 2403 covers other manufactured tobacco and manufactured tobacco substitutes; "Homogenised" or "Reconstituted" tobacco; Tobacco extracts and essences. 6. The chewing tobacco is classified under tariff item No. 240399.10. The preparations containing chewing tobacco is classified under tariff item No. 240399.20. The tariff item No. 240399.30 covers Zarda Scented Tobacco. 7. The Notification No. 5/2005-C.E. (N.T.), dt. 24-2-05, which came into force from 28-2-05, took care of the technical changes adopted in numbering scheme in tariff classification through the Central Excise Tariff (Amendment) Act, 2004. In terms of this notification, in the notification issued under Section 4A(2) of the Central Excise Act, for reference to Chapter or heading number or sub-heading no. of first schedule to the Central Excise Tariff Act, 1985, ....
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....tral Excise duty of Rs. 10,36,98,118/- with interest as applicable and penalty equal to the duty has also been imposed under Section 11AC of Central Excise Act, 1944. In addition, penalty of Rs. 10 lakhs was imposed under Rule 25 of Central Excise Rules, 2002 on the appellant company. Penalty of Rs. 2 lakhs was imposed on Smt. Sheetal K. Majithia, Director and penalty of Rs. 1 lakh was imposed on Shri Dipak Suryakant Shah, Factory Manager under Rule 26 of Central Excise Rules, 2002. The company, the director and the factory manager are in appeal. 13. Heard both sides. 14. Learned advocate on behalf of the appellants submitted that the intention of the Government was to levy duty on the product manufactured by the appellant under Section 4A only. This is evidenced by the fact that prior to 1-3-06 and after 10-7-06, the product manufactured by the appellant was assessed to duty by following the provisions of Section 4A only. He elaborately explained the relevant notification and the changes in the tariff heading over the period from 2002-2006 to support this view. He also relied upon the decision of Hon'ble Supreme Court in the case of WPIL Ltd. v. CCE as reported in 2005 (181) E.L....
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....g Tobacco. He also reiterated the points mentioned in the show cause notice and adjudication order. Further, he drew our attention to the manufacturing process, flow chart where it has been shown that the product manufactured by the appellant is Zarda Scented Tobacco and not Chewing Tobacco. 18. We have considered the submissions made by both sides. Chapter 2404.41 covers Chewing Tobacco and preparations containing Chewing Tobacco upto 2005. From 1-3-2005, 8 digit tariff was introduced and as a result Chewing Tobacco and preparations containing Chewing Tobacco were separately put under different category. After 1-3-2005, "2403 99 -- Other: 2403 99 10 -- Chewing tobacco 2403 9920 -- Preparations containing Chewing Tobacco 2403 9930 -- Zarda Scented Tobacco 19. From the above, it can be seen that the Zarda Scented Tobacco came to be se....
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....dication order in Para 2 is the manufacturing process as noticed by the officers when they visited the factory premises. This is a flowchart prepared by the officers after their visit. However, when we have a look at the statement of the Production Manager Shri Ramesh Narsinghbhai Patel in the flow chart, the Zarda Scented Tobacco in the process of manufacture is missing. Zarda Scented Tobacco figures in the manufacturing flow chart given by Shri Dipak Suryakant Shah only. Further, it was also brought to our notice that during the period from 19-1-05 to 20-8-05, the appellants had de scribed the product in the classification list as Chewing Tobacco and from 1-3-05, to 31-3-06, it was classified as Zarda Scented Tobacco and from 1-4-06 onwards, the classification description was Chewing Tobacco which continues till today. In the invoice/bills prepared by the appellant, the item was described as Zafrani Zarda and from 1-4-06, it is being called as Baghban Flavoured Chewing Tobacco. It is not the case of the department or the party that there was change in the label or manufacturing process. From the description in the label, it is quite clear that the product is called Flavoured Chew....