TaxTMI 
TaxTMI 
2018 (11) TMI 1757
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....udicating Authority has also imposted penalty of Rs. 2,00,00,000/- (2 Crores) under Rule 26 of Central Excise Rules, 2002 ( for short referred to as ' Rules) upon Shri Ram Gopal Agnihotri, Director of the Company. Being aggrieved by the impugned order the appellants are in appeal before this Tribunal. 2. Brief facts of the case are that the appellant is registered with the Central Excise Department and engaged in the manufacturing of Chewing Tobacco(CT) and Zarda Scented Tobacco(ZST) falling under Chapter Heading 24039910 and 24039930 of the 1st Schedule to Central Excise Tariff Act, 1985( for short CETA). The product, namely, zarda scented tobacco and chewing tobacco, are goods notified under Section 3 A of the Act and consequently leviable to Central excise duty on these goods are as per the provisions of Chewing Tobacco and in the Manufactured Tobacco Packaging Machine (capacity determination and collection of duty) Rules, 2010 (for short referred to as 'compounded levy'). The appellant No. 2, Director of the appellant company and is responsible for entire operation relating to manufacture of sale of the aforestated goods. 3. Acting on the intelligence, that the appellant ....
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....rm the premises Test Report date Contents of report 1 Nil dated 12.10.15 Ch-445 C.Ex. and 456 C. Ex. Pouches containing tobacco of Red label, Black label and double black Central Excise Commissonerate Bislaspur Kay Pan Sughandh Pvt Ltd. Bilaspur 04.11.15 Each sample is in the form of yellowish brown coloured small cut pieces of vegetable matter (bits of leaves) having pleasant smell. Each is composed of tobacco and frangrance. Each sample has the characteristic of zarda scented tobacco. Each does not contain added lime. 2 01/2015 Dated 27.10.2015 Raw material mixture for red label brand tobacco DGCEI Kay pan Sughnadh Pvt. Ltd. Bilaspur 30.11.15 The same is in the form of yellowish brown coloured cut pieces of vegetable matter ( cut bits of leave). It has the characteristic of processed tobacco. It does not contain added lime 3 02/2015 Dated 27.10.15 Raw material mixture for black label brand tobacco DGCEI Kay pan Sughnadh Pvt. Ltd. Bilaspur 30.11.15 - same as above- 4 03/2015 Dated 27.10.15 Two outers each containing 65 pouches of black label brand tobacco DGCEI Kay pan Sughnadh Pv....
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....e appellant in appeal Nos.; S No. Appeal No. Particulars Nature of Matter 1. E/50468/2018 Kaipan Pan Masala Pvt. Ltd vs. CCGST, CE & C, Bhopal Classification dispute as to whether good are zarda scented tobacco or chewing tobacco. 2. E/50469/2018 -do- -do- 3. E/50470/2018 -do- -do- 4. E/50471/2018 -do- -do- 5. E/ 50472/2018 -do- -do- 8. In these cases appeal was filed before ld. Commissioner (Appeal) who vide common order dated 30/10/2017 disposed of the appeal as under; "17. Thus, I find that Department case against the Noticee No. 1 is sustainable in the light of arguments and evidences mentioned in the SCN and as the Noticees' defence is not based on any infallible documentary evidence. It is, therefore, evidently proved that Noticee No. 1 had mis-declared the product as Chewing tobacco instead of the correct classification of jarda scented tobacco during the period June, 2015 to February, 2016. The differential Central Excise Duty of Rs. 16,95,33,000/- not paid by the Noticee No. 1 is , therefore, liable to be demanded and recovered from them under the provisions of Section 11 A of the Central E....
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..... Advocate also place reliance in the decision of this Tribunal in case of Urmin Products Pvt. Ltd. vs. CCE, [2015 (256) ELT 597 (Tri.), wherein it is held that the tariff has not defined the expression Chewing Tobacco or Zarda Scented Tobacco. The products, therefore, have to be classified upon the description given by the manufacturer on the pouches and on the basis of common parlance test and established practice in trade. Ld. Advocate also placed reliance on the decision in the matter of Flakes-n-Flavourz vs. CCE, Chandigarh, 2015 (327) ELT 435 (Tri), wherein the ratio laid down in the Urmin Products (supra) has been followed. Ld. Advocate also contended that it has been admitted that goods manufactured by the appellant have been stated to be premium chewing tobacco as per para 4.1 of SCN, and no market inquiry or other evidences have been adduced by the Department which indicated that goods were sold by the appellant as anything but CT. It was thus, submitted that the goods in question are nothing but CT and the classification of the products manufactured by the appellant as ZST is without any legal basis. 13. Ld. Advocate further submitted that CRCL test reports had not be....
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....o. 5/2015-CE dated 01.03.2015 1 Upto to Rs. 1.00 38.64 27.05 Notification No. 25/2015-CE dated 30.04.2015 1 Upto to Rs. 1.00 38.64 82.11 Notification No. 16/2016-CE dated 01.03.2016 1 Upto to Rs. 1.00 43.58 43.58 In terms of Rule 5 of Compounded Levy the appellant have filed various declarations which are also reproduced as under; Sr No. Date of declaration Goods declared to be manufactured Retail sale price of the pouch Speed of machine per minute (pouches per minute) No of machines for operation Exhibit No. 1 01.03.2015 Jarda Scented tobacco Rs. 1 220 4 I 2 24.03.2015 Jarda Scented Tobacco Rs. 1 310 4 II 3 01.04.2015 Jarda Scented tobacco Rs. 1 310 4 III 4 27.05.2015 Chewing Tobacco Rs. 1 310 4 IV 5 18.06.2015 Chewing Tobacco Rs. 1 310 5 V 6 28.07.2015 Chewing Tobacco Rs. 1 310 4 VI 7 01.08.2015 Chewing Tobacco Rs. 1 310 4 VII 8 25.08.2015 Chewing Tobacco Rs. 1 310 3 VIII 9 01.09.2015 Chewing Tobacco Rs. 1 310 3 IX 10 29....
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....n the duty structure under the compounded levy scheme. We also find that Department has although drawn the samples from the appellant's unit at Bilaspur (Raipur), Bhopal, kiwam supplier from Lucknow and sent them for test to CRCL. It is also on record as stated by Ld. Advocate, that no test memo were prepared for the various samples drawn which are being relied upon by the Department. In absence of the test memo, it would not have been possible for the Adjudicating Authority to co-relate the result of test report with the products manufactured by the appellants. It is also on the record that the appellant have requested for re-test of the sample so as to obtain a fresh test report from CRCL on the ground that the test report is not very specific and the various parameters on which it has been opined that the samples contained the characteristics of ZST have clearly been spelt out. At this point, we find it relevant to examine the test reports forwarded by the CRCL, which is as under; C.NO. 35-Cus/CRCL/2015-16/CL-464 DGCEI/16.11.2015 dated 30.11.2015 F. No. DGCEI/Bhzu/12004/09/2015 dated 27.10.2015, Test memo No. 01/2015 Report The sample is in the form of yellowish brow....
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....decimal three). Loss on drying = 43.8 % by Wt, (forty three decimal eight) Sealed remnant returned herewith 19. Perusal of these reports indicates that all the chemical characteristics required for determination of products as to whether ZST or CT have not been discussed by the CRCL in its report. The CRCL has although considered the criteria of moisture content and total ash content but there are neither of ZST nor that of the CT as indicated in BIS specification specified in aforesaid paragraph. In such a circumstance, not permitting the re-test of the samples by the adjudicating authority is not correct and legal. The Central Board of Excise and Customs has published supplementary instructions under the Central Excise Act which in Chapter 8.1 to 8.4. mandates that in case of any assessee is not satisfied with the test result the same is required to be re-tested again by the CRCL. This has not been followed by the adjudicating authority in the present case. Hon'ble Allahabad High Court in case of Katyal Industries vs. Union of India [2017 (346) ELT (218)(All) held that if denial of statutory right for re-testing of the sample amounts of violation of principal of natural ....