TaxTMI 
TaxTMI 
2024 (12) TMI 1620
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....tion of Duty) Rules, 2010 read with Notification No.11/2010-CE(NT) dated 27.02.2010. 2.2 On the basis of parameters furnished in declaration in Form-1 by the Respondent the Annual Capacity of Production (ACP) and Monthly Duty Liability (MDL) in respect of the machines installed and functional in the unit was determined under Rule 6 of the packing rules and appropriate order was passed by the Assistant Commissioner, Central Excise & Service Tax Division, Gorakhpur. Respondent was required to pay duty as determined and an intimation of monthly duty paid was submitted in Form-2 to the Superintendent under Rule 9 of the Packing Rules. During the scrutiny of Form-2 submitted for the months of May, 2015 to August, 2015 it had been observed that the respondent had short paid duty. 2.3 On the basis of information furnished in Form-1 dated 06.05.2015 & 13.05.2015 the ACP and MDL of the machine had been fixed. 2.4 In the form-I respondent has declared their products to be Chewing Tobacco, but the MDL Order dated 15.05.2015 was fixed in respect of 'Jarda Scented Tobacco' subject to confirmation received from CRCL, New Delhi. 2.5 Samples were sent to CRCL, New Delhi for examination....
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....e samples sent to them. Accordingly the jurisdictional authority sent the samples drawn from the unit to them for providing proper ingredients for finalization of its classification. (i) In their first report dated 07.10.2015 the Chemical Examiner reported that the contents of sample are in the form of brown cutpieces of vegetable matter (bits of leaves) with pleasant odour. It is mainly composed of tobacoo and flavoured. It does not contain lime. It has characteristics of Jarda Scented Tobacoo (ii) The re-test report dated 17.10.2016 shows that the contents are in the form of brownish dried cut pieces of leaves, having characteristics pleasant odour packed in unit packing. Each is composed of cut bits of tobacoo leaves, flavourant and added lime. Each is preparation containing chewing tobacco. Each is other than Jarda Scented Tobacco. It is evident from the above that the only change reported by the Chemical Examiner is presence of Lime in the sample, all other contents which are tobacco and fragrance/ odour have been re-confirmed. Merely addition of Lime in the product does not disqualify it from being Jarda Scented Tobacoo. B. The Chemical Exa....
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.... * The product has pleasant odours * The product has flavourant The comment of the CRCL "is other than Jarda scented tobacco" NEED NOT BE GIVEN ANY WEIGHTAGE because the CRCL, in so commenting, had exceeded its jurisdiction and authority, as held in the judgments listed in paragraph B above. c. There is a clear demarcation in the tariff entries 24039910 and 24039930. The first covers the plain chewing tobacco without having been added any flavor/scent to it, whereas, against other tariff entry name of commodity is mentioned as Jarda scented tobacco. Thus, it clearly comes out that the product was manufactured by the party with addition of mixture other than the chewable tobacco and Lime as the same also contains "Pleasant Odour" as per both the CRCL New Delhi's reports dated 07.10.2015 and 17/21.10.2016. Such perfumery mixture in the tobacco product gives an exclusive smell to the product. In view of these facts, it has been established that the tobacco products manufactured by the party are scented tobacco which cannot be called as 'BCT' and there remains no doubt that these tobacco products are Jarda Scented Tobacco'. It is also ob....
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....¢ Commissioner of Customs, Chennai v. Textworth International, 2016 (334) ELT 607 • Madhu Wool Spinning Mills v. Union of India, 1983 (14) ELT 2200 • HKT Mining Pvt. Ltd. v. Commissioner of Customs, Vishakhapatnam, 2010 (259) ELT 735 • Super Tech Agro Oils Pvt. Ltd. v. Commissioner of Customs, Amritsar, 2007 (216) ELT 618. • The Unmanufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010 does not empower the officer to change the classification of the goods. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For dropping the demand, impugned order records as follows:- "30. It has been alleged in the impugned show cause notice that the party is engaged in manufacture of Jarda Scented Tobacco/ Chewing Tobacco, classifiable under tariff heading 24039930/24039910 of the First schedule to the Central Excise Tariff Act, 1985. Jarda Scented Tobacco/ Chewing Tobacco is a notified goods manufactured under the Packing Rules read with Notification No.11/2010-C.E.(N.T.) dated 27.02.2010 as amended and on the basis of ....
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....In light of the contents and allegations in the Show cause Notice, defence reply, submissions made before me during the course of personal hearing written as well as oral, I find that the following points need to be determined: (i) Whether the party during the period May, 2015 to August, 2015 manufactured the Jarda Scented Tobacco, a notified goods falling under the chapter sub heading 24039930 of the First schedule to the Central Excise Tariff Act, 1985 and manufactured under the packing rules and were liable to pay duty as determined by the department under Rule 6 of the packing rules or the product manufactured by the party were chewing tobacco falling under the chapter sub heading 24039910 attracting central excise duty as per notification no. Notification No. 11/2010-C.E.(Ν.Τ.( dated 27.02.2010 as amended. (ii) Whether the party is liable to pay differential duty as alleged to have been short paid during the period from May, 2015 to Aug, 2015? (iii) Whether the demand is liable to be confirmed and recovered from the party under section 11A of Central Excise Act, 1944 read with Rule 19 of the Packing Rules, 2010 as amended? (iv) Whethe....
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....tarted functioning in the month of May-2015 with effect from 25.05.2015 & Rs. 4,92,66,000/- for further months. 35. I find that the although the party declared the product to be manufactured as Chewing tobacco falling under chapter sub heading 24039910 but the Assistant Commissioner, Central Excise, Gorakhpur found the goods as 'Jarda scented tobacco falling under chapter sub heading 24039930 and accordingly fixed the duty liability, provisionally. 36. I find that the duty liability was fixed provisionally although I do not find any provision of fixing liability provisionally, but at the stage of adjudication it is out of purview to ascertain as under what rules or provisions the duty liability fixed provisionally. But it is undisputed that the MDL was fixed considering the goods being manufactured as other than what was declared by the party. 37 The office of the Assistant Commissioner, Central Excise & Service Tax Division-Gorakhpur drew the samples of tobacco products manufactured by the units of the party during May, 2015 to August, 2015 for testing from the CRCL, New Delhi to ascertain the correct classification of the manufactured product for le....
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....ms of point 8.9/8.10 of Chapter 11(Samples) of the Central Excise Law Manual as permission from the Commissioner is not required in case of departmental laboratories i.e. CRCL New Delhi. In response, the Joint Director, CRCL, New Delhi vide letter dated 13.04.2016 suggested to get the prior approval of the Commissioner, Central Excise for re-testing on duplicate samples. Accordingly, a letter dated 25.04.2016 was sent to the Commissioner Central Excise, Allahabad for seeking necessary approval for re-testing on duplicate/triplicate samples of tobacco products. In response, the Assistant Commissioner (Tech), Central Excise, Allahabad vide their letter dated 10.06.2016 has communicated to the office that the Commissioner of Central Excise Allahabad has accorded the technical approval for re-testing of duplicate samples. The same was Communicated to the CRCL, New Delhi and duplicate/triplicate sample were again sent to them for re-testing vide letter dated 24.06.2016. 42. The Joint Director, CRCL, New Delhi vide their letter dated 17/21.10.2016 has reported that "Each of the six samples is in the form of brownish, dried cut pieces of leaves.. having characteristics p....
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....y was also obtained for re-test. The CRCL reported, after the re-test, the sample to be chewing tobacco and not the Jarda scented tobacco, Now, the crux of the issue is which report is to be considered for classification of the goods in question. In this regard, I find that following case laws relevant to decide the issue: In 2016 (334) E.L.T. 607 (Mad.) IN THE HIGH COURT OF JUDICATURE AT MADRAS V. Ramasubramanian and K. Ravichandrabaabu, JJ. COMMR. OF CUS. (EXPORTS), CHENNAI-1 Versus TEXWORTH INTERNATIONAL Civil Miscellaneous Appeal No. 1936 of 2010 and M.P. No. 1 of 2010, decided on 18-3-2016 Samples Retesting of samples Central Silk Technology Research Institute in its first test report opining that imported mulberry raw silk of yam is of 2A grade, while on retesting changing its opinion to hold said goods of 3A grade Since samples were drawn from same consignment and there is no conditionality attached to it, no ground for not following second test report more so when Department itself had initially accepted it. Appeal dismissed REPRESENTED BY: Ms. R.K. Sekna Reshma, for the Appellant. Shri Joseph Prabhakar, for the....
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....ent itself agreed to a second test report. Once the Department had agreed to a second test report without reserving any right to rely upon the first test report, it is not open to the Department to contend that the second test report ought to be dumped. 7. The contention of the learned counsel for the appellant/Department is that the second test report was a qualified and a conditional one. 8. But unfortunately, we do not see any condition attached. The samples sent for the second test had also been drawn from the very same consignment. The samples were actually available with the Department. This is bome out by paragraph 5 of the grounds of appeal. Therefore, we find nothing wrong with the order of the Tribunal. 9. Accordingly, the questions of law are answered against the Revenue Department. The civil miscellaneous appeal is dismissed. No costs. Consequently, the above MP is also dismissed. Further, in the case of MADHU WOOL SPINNING MILLS Versus UNION OF INDIA AND OTHERS, reported in 1983 (14) E.L.T. 2200 (Bom.), it was held by the Hon'ble High Court of Bombay observed as "Samples tests showing different results - Effect. ....
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....ent has sought for retesting of the samples and after retesting of the samples it was determined by the CRCL vide their letter dated 17/21.10.2016 that "Each of the six samples is in the form of brownish, dried cut pieces of leaves, having characteristics pleasant odour packed in unit packing. Each is composed of cut bits of tobacco leaves, flavourant and added lime. Each is preparation containing chewing tobacco. Each is other than Jarda scented tobacco," 4.4 As CRCL has clarified that the samples are other than of Jarda Scented Tobacco, contrary to the earlier test report given by them in which they stated that the samples were containing characteristics of Jarda Scented Tobacco. From perusal of the second test report it is very clear that the CRCL has not determined any classification of the goods to have characteristics of the samples through report after retesting. They concluded that the samples were of Chewing Tobacco other than Jarda Scented Tobacco. The submission made in the appeal by the revenue that CRCL had determined the classification of the products is without any basis. The opinion furnished in respect of the samples tested is the basis for arriving at the findi....