TaxTMI 
TaxTMI 
2025 (11) TMI 938
X X X X Extracts X X X X
X X X X Extracts X X X X
....e subsequent period vide OIO dated 23.09.2019 which is sustainable. 8. In view of the above discussion and findings, the OIO dated 30.04.2019is set aside, and the appeal bearing No. 38-CE/APPLMRT/GZB/2019-20 dated 27.06.2019 filed by M/s. Salasar Exim, Village Ganoli, Post Chicora, Ghaziabad, Uttar Pradesh, is allowed. Further, the appeal bearing No. 91-CE/APPL-MRT/GZB/2019-20 dated 23.12.2019, filed by the Deputy Commissioner, Central GST, Division-IV, Ghaziabad, is rejected." 1.2 By the Order-In-Original No. 01/DC/CGST/DIV-IV/GZB/2019-20 dated 30.04.2019 following has been held:- ORDER I. I order for classification of the goods i.e. Paper Biri under CETH 24022040. II. I confirm the demand of Rs. 1,94,619/- (One Lac Ninety four thousand six hundred and nineteen only) upon the party under Section 11A(1) of the Central Excise Act, 1944 III. I also confirm the demand of Interest at the appropriate rate under Section 11-AA of the Central Excise Act, 1944 on the amount confirmed above. IV. I impose penalty of Rs. 1,94,619/- (One Lac Ninety four thousand six hundred and nineteen only) under Rule 25 of Central Excise Rule 2002 read with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9;000 Additional Rs. 215 per'000 NCCD Rs. 215 per'000 Basic @ 21 per 000 NCCD @ Rs. 2 per 000 Basic Duty Additional Duty NCCD I Basic +Addl.- +NCCD 60mm filter 492000 629760 105780 105780 10332 984 619428 105780 104796 830004 Basic Rs. 1740 per'000 Additional Rs. 260 per'000 NCCD Rs. 260 per'000 Basic @ 21 'per 000 NCCD @ Rs. 2 per 000 Basic Duty Addition al Duty NCCD I Basic +Addl. +NCCD 69 mm filter 36000 62640 9360 9360 756 72 61884 9360 9288 80532 Basic Rs. 3375 per'000 Additional NIL NCCD Rs. 190 per'000 Basic @ 21'per 000 NCCD @Rs.2 per 000 Basic Duty Addition al Duty NCCD I Basic +Addl. +NCCD 84mm filter 46000 155250 0 8740 966 92 154284 0 8648 162932 1449573 216244 224984 21930 2089 1427643 216243 222395 1866781 DETAILS OF CLEARENCES MADE AND DUTY PAID BY THE PARTY FROM FEB' 2016 TO MAY' 2017 (ONLY B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndred and nineteen only) should not be demanded and recovered from them under Section 11A(1) of the Central Excise Act, 1944 iii. Interest at the appropriate rate should not be recovered from them under Section 11-AA of the Central Excise Act, 1944. iv. Penalty should not be imposed upon them under Rule 25 of Central Excise Rule 2002 read with section 11AC of the Central Excise Act 1944 for contravening the provisions of Rule 4,5, 6 and 8 of the Central Excise Rules 2002. 2.6 A Statement of Demand dated 11.07.2018 was issued to the Appellant asking them to show cause as to why:- "Duty short paid amount to Rs 91,47,957/- (Rupees Ninety One Lacs forty Seven Thousand Nine Hundred and Fifty Seven only) during the period Oct. 2016 to May 2017 should not be recovered in the manner as provided in the earlier show cause notice C. No V(15)Tech./Adj./D-II/GZB/Salasaar/176/16-17 dtd. 7.6.2017 issued on the same set of facts and evidences read with section 11A of the (7A) of Central Excise Act 1944 along with interest and penalty, The statement of demand is issued on the basis of facts and evidences discussed in earlier Show cause notice." 2.7 The Show Cause No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ner of Central Excise, New Delhi Vs Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.)]: (ii) Paper Co. [1988 (37) E.L.T. 480 (S.C.)]: (iii) Akbar Badruddin Jiwani Vs Collector of Customs [1990 (47) E.L.T. 161 (S.C.)]: 4. As is apparent, the Commissioner (Appeals) has superficially acknowledged the vital parameters and facts of the case; as reproduced hereunder for kind referential ease; but have totally discarded the same while passing the concluding order that the subject goods were 'Paper Biri' classifiable under Chapter Subheading No. 24031929 of CETA. The facts worth mentioning are: (i) That, on perusal of the goods received by the said party vides invoices Nos. 4621074 dated 23.07.16, 230001 dated 23.07.16, 230002 dated 03.09.16, 1609 dated 23.07.16, 1635 dated 23.08.16 & 2228 dated 23.08.16 from M/s Golden Tobacco Ltd, Vadodara, it becomes apparent that they had also received cut/ processed tobacco on payment of Central Excise duty. Further, Supplementary Notes of Chapter 24 of Central Excise Tariff defines 'Cut Tobacco' as :: "Cut tobacco means the prepared or processed cut -tosize tobacco which is genera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....' was also enquired from the market and it was seen that the packing of these Paper Biri was different from the packing of 'Paper Biri' being manufactured by M/s Salaasar Exim. The snaps of Paper Biri of brand 'Ajanta Sada Biri' were procured, as available in the market, and from the snaps it was observed that the 'Paper Biri' of the above said Brand had simply been wrapped in paper without any filter and the same could be easily distinguished from the packing of Cigarettes, whereas the packing of the said 'Paper Biri' carried out by M/s Salaasar Exim was similar to the packing of Cigarettes. The selling price of the product manufactured by M/s Salaasar Exim was also abnormally high compared to the other Paper Biri brands being sold in the market. (v) That, moreover, the party was clearly mentioning the size of their product i.e. 69mm (applicable to Cigarette) and this fact alone establishes that the product i.e. the said Paper Biri manufactured by the said party with length 69mm was being marketed by the Party as Cigarette. It would also be not out of place to mention that in common Trade parlance and in general market terminology "Biri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iginal No. 01/DC/CGST//DivIV/GZB/2019-20 dated 30.04.2019 and Department's Appeal No.91-CE/APPL-MRT/GZB/2019-20 dated 23.12.2019 against Order-in-Original No. 06/ADC/C. Ex/GZB/2019-20 dated 23.09.2019; does not appear to be legal and proper, in the eyes of law, and hence the demand in the subject case, so raised vide Show Cause Notice No.04/AC/CEX/D-11/GZB/17-18 dated 07.06.2017, so bearing C. No. V (15)Tech./Adj./DII/GZB/Salaasar/176/16-17/1111-13 dated 07.06.2017, and Statement of Demand No. 05/ADC/CEX/GZB/2018-19 dated 11.07.2018, 50 bearing No. V(15)Adj/SCN/GZB/Salasar Exim/24/2017/2070-2073 dated 11.07.2018, is liable to be confirmed and upheld and penalties, as proposed, have to be imposed. C. (E) Therefore, the Hon'ble Tribunal is prayed that the order under challenge may be stayed. The Hon'ble Tribunal is further prayed to quash the impugned Orderin-Appeal No. GZB/EXCUS/000/APPL-MRT/35to36/202021 dated 10.06.2020 and uphold the demand and penalties, as submitted above, and/or pass any other order as deemed fit and proper, under the circumstances of the case, in furtherance of the objectives of judicial discipline and serving the principle of natural jus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o do a particular type of work". Therefore, the wooden jigs cannot be termed as machine and just because these wooden jigs were used for rolling cut tobacco in paper cannot be construed that the appellant party was manufacturing cigarette. The contention of the appellant department regarding use of machine by the appellant party was, therefore, not tenable, and its related contention that the appellant party was manufacturing cigarettes with the use of machines was, therefore also not tenable. I further find that the grounds of appeal in the departmental appeal consist more of surmises as is evident from the use of words like 'appears/ appeared which make it evident that the department is not sure of its stand regarding classification of the goods. It is settled law that the classification of goods is a matter relating to chargeability and burden of proof is squarely upon the department, if department intends to classify a goods under a particular heading or sub-heading different from what is claimed by the manufacturer. I find that the department has not put forth any evidence to infer as to why the impugned goods were not paper biri as claimed and declared by the appellant pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the appellant party has contended that Chapter 24 of the CETA does not put any restriction on the manufacturer in improvising the packaging of paper biri for sale of product in the competitive market. The Hon'ble CESTAT, Chennai in case of King Bidi Company Versus CCE, Tirunelveli, while deciding the issue of packing of biri in aluminium foil with the aid of power, has held as "Manufacture-Packing of biris in aluminium foil with aid of power being post-manufacturing activity does not amount to manufacture - Duty not demandable at higher rate Sections 2(f) and 11A of Central Excise Act, 1944, [para 5] 7.3 I also find that no market enquiry has been conducted by the appellant department to establish that the impugned goods were not bought and sold as paper biri instead these were known as cigarettes in common trade parlance. In contrast it was evident from the RUD-XVII, RUD-XVIII, RUD-XXIII, submitted by the appellant party, that the impugned goods were cleared and sold as "BIDI" as mentioned on its packing. The contention of the appellant department that the impugned goods manufactured by the appellant party were different from the other brands of paper biri available i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ma Ayurvedic Harbal Private Limited Versus CCE, Nagpur [2006 (196) ELT 3 (SC)] has observed that "Classification of Goods Expert's Opinion Opinion of Chief Chemist has no relevance for determining classification of products - Role of Chief Chemist is only to supply analytical data". 4.3 The basic issue that needs to be determined in the present case is whether goods have been cleared by the Appellant merit to be classified as paper biri under Sub-heading No.24031929 of the Central Excise Tariff Act, 1985 or as Cigarette under Subheading No.24022040 of Central Excise Tariff Act, 1985. The impugned order after discussing the manufacturing process and the equipment used for manufacture of the same have concluded that the Appellant was not using power operated machines for the manufacture of the cigarette. Revenue Authority have failed to establish any use of such machinery thereafter relying upon the supplementary notes in Chapter 24 of the Central Excise Tariff Act concluded that the classification of the impugned goods as claimed by the parties has not been disputed with by the Revenue with tenable evidences. Reliance has been placed on the decision of the Hon'ble Supreme Cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... pipes and cigarettes" of subheading 240310 does not cover "Gudaku". Heading/Sub- Heading DESCRIPTION Rate of duty 2401 UNMANUFACTURED TOBACCO; TOBACCO REFUSE 24011050 Tobacco for manufacture of biris, not stemmed 64% 2402 CIGARETTES, CIGARS, CHEROOTS, CIGARILLOS OF TOBACCO OR OF TOBACCO SUBSTI AND TUTES 24022040 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres but not exceeding 70 millimetres Rs.1,740/- per thousand 2403 OTHER MANUFACTURED TOBACCO ANUFACTURED TOBACCO "HOMOGENISED" OR "RECONSTITUTED" TOBACCO EXTRACTS AND ESSENCES Tobacco, Whether Or Not Containing Substitute In Any Proportion; AND SUBSTITUTES; TOBACCO; - Smoking Tobacco 24031921 Other than paper rolled biris, manufactured without the aid of machine Rs. 12 per thousand 24031929 Other Rs. 80 per thousand As per the above description the paper rolled biris are classifiable un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere different from the packing of Paper biri being manufactured by M/s Salaasar Exim. The relied upon photographs show that paper biri of brand 'Ajanta SadaBiri, procured as available in the market has simply been wrapped in paper without any filter and can be easily distinguished from the packing of Cigarettes, whereas the packing of alleged Paper Biri carried out by the party was similar to the packing of Cigarette. I have observed that the SCN has relied upon certain photographs of the party's product to establish their allegation. However the photographic evidences show a part of cigarettes look alike with brand name "Square" and "Bidi" is written on top of the brand name The photographs of packing cartons also carry word Bidi over the brand name Square. Mere resemblance of the party's product/its packing to cigarettes itself is not sufficient to set aside the fact that the party was writing word 'Bidi" just above its brand name both on their product as well as packing. The most important evidence in the matter is whether the party marketed its product as cigarettes and whether such product was perceived in the common trade parlance as cigarettes. My th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(9) SCC 72, Alpine Industries v. CCE, 2003 (3) SCC 111 = 2003 (152) E.L.T. 16 (S.C.), S. Samuel MD, Harrisons Malyalam v. Union of India, 2004 (1) SCC 256 (Paragraph 13), Union of India v. Harjeet Singh Sandhu, 2001 (5) SCC 593, Collector of Custom and Central Excise v. Surendra Cotton Oil Mill Company, 2001 (1) SCC 578 = 2001 (127) E.L.T. 3 (S.C.), Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P., 1998 (7) SCC 228 = 2004 (178) E.L.T. 48 (S.C.), Metagraphs (P) Ltd. v. CCE, 1997 (1) SCC 262 = 1996 (88) E.L.T. 630 (S.C.), Purewal Associate Ltd. v. CCE, 1996 (10) SCC 752 = 1996 (87) E.L.T. 321 (S.C.), Indian Cable Co. Ltd. v. CCE, 1994 (6) SCC 610 = 1994 (74) E.L.T. 22 (S.C.), Novapan India Ltd. v. CCE, 1994 (Suppl.) (3) SCC 606 = 1994 (73) E.L.T. 769 (S.C.), CCE v. Ballarpur Industries Ltd., 1989 (4) SCC 566 = 1989 (43) E.L.T. 804 (S.C.), CCE v. Krishna Carbon Paper Company, 1989 (1) SCC 150 = 1988 (37) E.L.T. 480 (S.C.), Filterco v. CST, 1986 (2) SCC 103 = 1986 (24) E.L.T. 180 (S.C.), Chiranjeet Lai Upendra v. State of Assam, 1985 (Suppl.) SCC 392, Indo International Industries v. CST, 1981 (2) SCC 528 = 1981 (8) E.L.T. 325 (S.C.) (Paragraphs 4 and 5 ), Union of India v.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... description of the article fits in with the expression used in the Tariff.... Moreover, the functional utility and predominant or primary usage of the commodity which is being classified must be taken into account, apart from the understanding in common parlance. A residuary entry can be taken refuge of only in the absence of a specific entry. The word "Fruit drink" and "Fruit Juice" used in Entry 103 of Part A of the IInd Schedule to the U.P. VAT Act has neither been defined under the Act nor it has been used in technical sense. If a person asks for fruit Juice or fruit drink, he will not be given "Sharbat Rooh Afza" and vice versa. Therefore, the Tribunal has neither committed any error of law to apply common parlance test nor committed any error to record the findings of fact that "Sharbat Rooh Afza" is not a fruit drink. I have noted that no evidence has been relied upon to establish that the product manufactured by the party was known in common trade parlances as cigarettes or it was peddled as cigarettes. No such evidences has been relied upon to level such allegations. 5.10 It is clear from Party's purchase order that they have received 100 "wooden jig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....real test for determining the real nature of the product. The relevant paragraphs of the said decision has been reproduced in the Order-In-Original referred above. 4.9 Further, it is observed that also considered the argument to the effect that wooden jigs could be considered as machine but just presence of such wooden jigs is not enough to establish that the impugned goods were cigarettes. Revenue has emphasizes in their appeal on the report of CRCL which after examination of the samples have stated that samples specifies description of Cigarette under COPTA 2003. However, the said report of CRCL do not specify sample to be classified as cigarette as per the definition contained in the Central Excise Tariff Act, 1985. As COPTA defines cigarette to be included any role of tobacco wrapped in paper or in any other substances not containing tobacco. The product in terms of COPTA would be defined as cigarette. However the definition as per the COPTA cannot be the basis for determination of classification under Central Excise Tariff Act, 1985. 4.10 Hon'ble Supreme Court has in the case Universal Ferro & Allied Chemicals Ltd. [2020 (372) E.L.T. 14 (S.C.)] held as follows: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Revenue (Taxes), Ernakulam v. M/s. G.S. Pai and Company - AIR 1980 SC page 611, this Court held that while interpreting the entries in Sales-tax Legislation, it should borne in mind that the words used in the entries must be construed not in any technical sense but as understood in common parlance. Courts must give the words, used by the legislature, their popular-sense meaning "that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it". The word in the entry must, therefore, be interpreted according to ordinary parlance and must be given a meaning which people conversant with the commodity would ascribe to it. 4.12 In case of Western Agencies Pvt. Ltd. [2011 (22) S.T.R. 305 (Tri. - LB)] a larger bench of CESTAT observed as follows: "9.5 Statutes having common object may provide aid to each other. But different statutes seeking to achieve different objects rule out interpretation of expressions used in one statute with reference to their use in another statute and decisions rendered with reference to construction of one Act cannot be applied with reference to the provisions of another Act, when the two Acts are....