TaxTMI 
TaxTMI 
2016 (10) TMI 610
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....High Court of Himachal Pradesh and the High Court vide order dated 1.3.2016 framed the following issues: (i) Whether the additive mixtures prepared by the assessee are excisable products? (ii) Whether the exemption under Notification No. 121/94CE dated 11.8.04 is available to NCCD during the period 1.3.2001 to 16.10.2002? (iii) Whether the revenue neutral situation comes in the instant case and consequently, the entire exercise is academic? and held that this Tribunal in the earlier order has not decided the issue No.1 and No. 2 and shifted directly to the issue No.3, therefore, the matter was remanded back to the Tribunal to address all the issues. In a consequent to the order of the Hon'ble High Court, the matter is listed....
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....y on 17-10-02. In view of this, various show cause notices were issued to the respondents for demanding NCCD on Additive mixture cleared during the period in dispute alongwith interest and for imposition of penalty on the respondent. These show cause notices were adjudicated, demand of duty alongwith interest was confirmed and penalties were also imposed. On appeal to Commissioner (Appeals), the Commissioner (Appeals) allowed the appeals observing that if the NCCD is required to be paid on the Additive mixture captively consumed in the manufacture of branded Chewing Tobacco, then the NCCD so paid is available to the appellant as Cenvat credit and, therefore, the Revenue neutral situation comes about and hence the ratio of Tribunal (Larger B....
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.... and presumption by showing approximate of value and approximate of quantity. In that circumstance, without any specific quantity/value, the show cause noticed are defective.. He further submits that the compound is not goods. He explained the manufacturing process which involves different stages of processes and no intermediate products were removed/ transferred or sold to any one and the process of manufacturing of branded chewing tobacco was integrated and culminated into manufacture of chewing tobacco as the final products, which alone was cleared on payment of duty including NCCD. Therefore, no intermediate stage of the product has emerged, therefore, NCCD is not payable by the respondents. He further submitted that the charging excise....
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.... 8. We have seen that the respondents have explained the process of manufacture which is summarised as under:- Raw Tobacco is received in gunny bags from the dealers, mainly Nepani and Gujrati varieties are predominately used. Raw Tobacco is properly screened and sieved for its size, foreign material, moisture content and dust etc. After thorough screening and sieving, the raw tobacco is kept in a Tray. A compound is prepared by using secret formula and is kept in bucket. The tobacco kept in the tray is then mixed well with the compound manually, which gives it the desired flavoured aroma. Also, shredded silver is mixed with the tobacco in some cases. The type of mixing and the quantity of compound and silver combination leads to a....
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....id case, captively manufactured goods/compound was transferred to other three factories of the said appellant. There is no such allegation against the respondents in this case, therefore, the said decision of this Tribunal is not applicable to the facts of this case. The department in this case has failed to produce any evidence to confirm the test of marketability, in that circumstance also, we hold that the product is not excisable product. 11. We further note that the additive mixture (compound) is not chewing tobacco nor preparation containing chewing tobacco. We find that additive mixture is not known, recognised or marketed as either chewing tobacco or preparation containing chewing tobacco. Admittedly, additive mixture is not know....
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....dents are not liable to pay NCCD. 13. We also take note that exemption on NCCD was granted vide Notification No. 52/02 dated 17.10.2002. We also find that policy intention was that as in the case the basic excise duty and AED after the imposition of NCCD also, there would be no additional burden of NCCD for captive use of compound. Otherwise it would be anomalous that if the use is outside the factory, the impact is nil by virtue of Cenvat Credit being admissible from 1.3.2001 but for use within the factory, NCCD is payable. Hence, we have already taken the view that no NCCD will be payable on the additive mixture for the earlier period even though notification no. 52/02 has been issued only on 17/10/2002. Issue No. (III) 14. We ta....