TaxTMI 
TaxTMI 
2006 (11) TMI 46
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.... did not accept the Order-in-Original. Therefore the appeals were filed before the Commissioner (Appeals). The Commissioner (Appeals) in both the impugned orders upheld the decision of the Original authority. Therefore, the Revenue is aggrieved over the impugned orders and have filed these appeals. 3.The gist of the 'Grounds of the Appeals' is as follows :- The Orders-in-Appeal No. 07/2004 (G)(D)CE, dated 27-1-2004 and 24/2004 (G)(D)CE, dated 30-4-2004 are not proper and legal on the following grounds :- (i) In terms of the clause (iv) of the Notification No. 8/2001-C.E., unbranded chewing tobacco and preparations containing chewing tobacco falling under Heading No. 24.04 are eligible for granting benefits under exemption Notification No. 8/2001-C.E. In this connection, it is relevant to examine the Tariff classification of above products. The description of the relevant Tariff Sub heading reads as under : "Chewing Tobacco and preparations containing chewing tobacco; Pan Masala containing Tobacco" The existence of the 'semi colon' in the above description clearly indicates that 'Chewing Tobacco' and 'Preparations containing chewing tobacco' are di....
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.... as 'Preparations containing chewing Tobacco'. As explained above, both the goods differently described in the one dash (-) Tariff description itself and further divided into two separate two dash (--) Tariff sub-headings as 2404.41 and 2404.49. (iv) Further, the conclusion that the word "unbranded" used in the clause (iv) of the said Notification is applicable only to the chewing tobacco and not to the preparations containing Chewing Tobacco is not tenable for the following reasons : (a) The word "Unbranded" is an adjective. It qualifies both the nouns that were added by a conjunction "and". There is common usage of singly adjective for qualifying two nouns joined by "and", to illustrate, the phrases Little boys and girls, poor men and women, beautiful roses and lilies and dear ladies and gentlemen, etc. wherein both nouns are covered by the adjective mentioned before the first known. Hence, a simple reading of the above sentence clearly indicates that both the chewing tobacco and preparations of chewing tobacco are unbranded. (b) Further, the conclusion of the Commissioner (Appeals) that the word "unbrande....
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....he relevant period would be classified in Chapter 21 in view of the specific entry and therefore it gets excluded from the General Sub-Heading 2404.40 wherein the entry is "Chewing Tobacco and Preparations containing Chewing Tobacco". He maintains in view of the findings of the High Court of Andhra Pradesh that the "Pan Masala" in question should not be considered as coming within the purview of "Chewing Tobacco and its Preparations". In that view of the things, it would not be entitled for the benefit of the exemption Notification as there is no specific entry of "Pan Masala" in the exemption Notification. 5.The learned Advocates urged the following points : - (i) A careful reading of the Notification No. 8/2001-C.E., dated 1-3-2001 would show that the exemption is available to "Chewing Tobacco and Preparations containing Chewing Tobacco" falling under Chapter Heading No. 24.04 of Central Excise Tariff Act, 1985. It is not restricted to the item falling under 2404.41 or 2404.49. In fact, it applies to all the goods falling under Heading 24.04. (ii) The Department contends that only 'Unbranded Chewing Tobacco' falling under Heading....
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....id Notification - "All goods falling under Chapter 24 (other than unbranded Chewing tobacco, preparations containing chewing tobacco and tobacco extracts and essences', falling under the Heading 24.04) were not entitled to SSI exemption. In 2003, the same position continued. Thus it can be seen in 2002, the words "tobacco extracts and essences" were added. Further the word 'and' was removed and in this place a comma was introduced, between the words 'unbranded chewing tobacco'/'preparations containing chewing tobacco'. The ambiguity which was there, if any has been removed by introducing a 'comma' which in terms of the settled law is 'disjunctive'. The legislative intent as well as the historical evolution of the Notification issued from time to time clearly shows that the intention of the Government was always to extend the benefit of SSI exemption to unbranded chewing tobacco and to preparations containing chewing tobacco, (even if branded and falling under Heading 24.04). The law is supposed to be evolving and dynamic and not static as held by the Apex Court in a number of decisions. (v) If it is the intention of the Government to extend the benefit of N....
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....ons containing chewing tobacco. In view of the above, 'Pan Masala' is entitled for the exemption Notification. On the other hand, the Revenue's contention is :- (1) There is a separate entry for 'Pan Masala' in the Tariff. (2) Preparations containing chewing tobacco are distinguishable from Pan Masala. (3) The exemption is only for preparations containing chewing tobacco and not for pan masala. (4) Assuming that pan masala is covered under preparations containing chewing tobacco even then it would not be entitled for the exemption because the word 'unbranded' appearing before chewing tobacco qualifies even the preparations containing chewing tobacco. In the present case, the product is branded. Only unbranded products are entitled for the exemption. Hence the pan masala under brand name manufactured by the Respondent is not entitled for the exemption Notification. The relevant portion of the Tariff entries are reproduced below :- Heading No Sub-head-ing No. Description of goods Rate of duty Basic Additional 2404 xxx Other manufactured tobacco and manufactured....
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....ven certain guidelines which will be of immense use in the present appeal. In that case, the issue was whether the Disinfectant fluids manufactured by the appellants would be entitled for the benefit of exemption Notification under the following entry :- "Insecticides, Pesticides, Weedicides and Fungicides" The assessee claimed the benefit of the exemption Notification under the above entry. The Assistant Commissioner rejected the assessee's contention. He held that the Disinfectant fluids manufactured by the appellants did not have the property of killing any insect or pest and therefore would not be entitled for the benefit of exemption Notification. The appellate authority, on the other hand, held that the impugned products were nothing but fungicides. In the Departmental appeal, two members of the Tribunal out of the three rejected the Collector's decision. The Tribunal found that the impugned goods were being referred to and marketed as disinfectants and that the preparations in question were capable of killing of various bacteria and fungi, but it refused to extend the benefit of exemption Notification as the Notification being confined to specified categories, the appellan....
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....ption notification has to be construed broadly and widely. Each of the words insecticides, pesticides, fungicides or weedicides are understood both in the technical and common parlance as having broad meaning. Therefore, if any goods or items satisfy the test of being covered in either of the expression, then it is entitled to exemption. The broad and basic characteristic for exemption under the notification is that the goods must have the property of killing germs and bacteria insects or pest and it should be understood in the common parlance as well as being covered in one of the broad categories mentioned in the notification. Since the goods produced by the appellant are capable of killing bacteria and fungi which too, is covered in the expressions 'pesticide' and 'fungicide' there appears no reason to exclude the goods from the aforesaid notification." Hence if we keep in mind the guidelines enunciated in the above mentioned Supreme Court decision, we should first ask the question whether the impugned products can be considered as preparations containing chewing tobacco. If the answer is 'yes', then the benefit of exemption notification cannot be denied. In the present case, g....