TaxTMI 
TaxTMI 
2013 (8) TMI 607
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....tion 3A of the Act, specified (i) un-manufactured tobacco, bearing a brand name, falling under tariff heading 2401 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and (ii) chewing tobacco falling under tariff item 2403 99 10 of the said Tariff Act, manufactured with the aid of packing machine and packed in pouches, as notified goods, on which there shall be levied and collected duty of excise in accordance with the provisions of the said section 3A. 3. In the given circumstances, party vide letter ref. EXCISE/10-11/01 dated 07.04.2010 sought clarification from the Deputy Commissioner, Central Excise Division, Sangrur regarding packing of mini filter pouches and for installation of machines for the manufacture of filter tobacco pillow pouches. In the aforesaid letter dated 07.04.2010 the party referred to Board's letter F. No.341/49/2008-TRU(Pt-I) dated 04.08.2008 and the clarification given by the Assistant Commissioner of Central Excise Kundli Division (Distt-Sonipat) that tobacco pillow (Sachet) could not be considered as notified goods under the compounded levy scheme. The party thus requested the Deputy Commissioner, Central Excise Division, Sangrur ....
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....d to the Superintendent, Central Excise Range, Bathinda with a copy to the party ordered/clarified as under:- "In view of the Board's clarification dated 04.08.2008 (copy enclosed) manual packing is allowed. As per clarification Tobacco Pillow (Sachet) can not be considered as notified goods because the same are not being sold to the ultimate consumer. Therefore, below Ten or more filter Tobacco Pillow (Sachet) making machines may be allowed to the party for operation as per party's request. Similar permission has already allowed by the Assistant Commissioner, Central Excise Division, Kundli to M/s Harsh International Pvt Ltd. The needful may be done as per law under intimation to this office." 6. The Central Excise Hqrs. Officers, Chandigarh visited the factory premises of M/s Tej Ram Dharam Paul, Factory Road, Maur Mandi on 16.06.2010. The manufacturing process employed by them was ascertained as under:- (i) Nine Form Fill and Pack Machines were found installed and working with the aid of power. Paper Rolls are put on the said machine; tobacco is put into the hoppers fitted on the machines. The machines form the f....
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....nd without any packing machine. 10. We note that Commissioner (Appeals) has taken into consideration the Capacity Determining Rule 2010 along with various notification issued in terms of the said Rules. He has considered the explanation (5) inserted by notification No.26/2010 by way of amendment vide notification No.19/2010-CE dated 13.04.2010. The said explanation reads as under:- "For the purpose of this notification, "filter khaini" means chewing tobacco which is packed in sachets of filter paper of fabric before being packed in pouches with the aid of a packing machine" 11. The Commissioner (Appeals) has further observed as under:- "I find that the explanation 5 inserted vide the notification no.19/2010 is of clarificatory nature as the same defines the meaning of filter khaini, for the purpose of the original notification no.16/2010 dated 27.02.2010. In my opinion the need to define arose due to disputes as to the meaning of 'filter-khaini', being a new product / form of chewing tobacco, developed by the manufacturers for the safety of the consumers as it avoids a direct contact of tobacco leaves with the mouth, thereby reducing the hazard....
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....d 'with the aid of packing machine' would have been used next to the words 'which is packed in sachets of filter paper or fabric'. The activity of packing of chewing tobacco in sachets/filter paper has not been qualified with the words 'with the aid of packing machine'. The word 'with the aid of packing machine' is used the activity of further packing in pouches. The said clarification clears ambiguilty or doubt, if any, on the applicability of Section 3A of Central Excise, which is intended to charge duty on compounded basis on pouches, packed with the aid of packing machines. But that being not so, the intention is clear from the words that only the pouches that are packed with the aid of packing machine would mean 'filter-khaini' for the purpose of Section 3A and not otherwise. The wordings of the notification cannot be customized in order to give it a different meaning. I place reliance upon the apex Court's decision in the case of Rukmani Packkwell Traders - 2004 (165) E.L.T. 481 (S.C.), in this regard. Even if the plea taken by the Department in grounds of appeal is taken into consideration, though the same is not admitted, then both the activities i.e. packing of chewing tob....
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....ing of such manually packed pouches in his factory premises." 14. After taking into consideration the entire facts he has held that in terms of Explanation 5 and the clarification given by the Board he came to conclusion that Section 3 A covers only pouches packed with the aid of packing machine and not the pouches that are packed manually. Inasmuch as the plastic pouches, in the present case, are pre-sealed and zipped from one side and the sachets are put in manually and the pouch is sealed with the help of hot iron/band sealer, it cannot be said that the plastic pouches are packed with the help of packing machine. 15. We note that the filter khaini, pillows/sachets packed with the aid of packing machine do not bear any brand name, MRP, warnings as to health hazards and manufacturer's particulars, as required under the capacity Rules, it cannot be held that the same are notified goods in terms of the compounded levy rules. The same are more or less like the Tea bags, which are without any brand, name or carrying any other requisite information and which are ultimately packed in the final containers carrying various requisite information's. It is only the final container, whi....