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2015 (2) TMI 307 - CESTAT BANGALORERemoval of tobacco refuse without payment of duty - initiation of the proceedings against the appellant to demand duty on cut tobacco denying the benefit of Notification No. 52/2002 CE dated 17.10.2002 - Held that:- - Benefit has been denied on the ground that tobacco refuse is also excisable goods, marketable, can be considered to have been manufactured and can be sold for consideration. Assessee is engaged in the manufacture of Cigarette. During the course of manufacture of Cigarette, and for the process of manufacture of Cigarette, they have to manufacture Cut Tobacco also. Therefore it can be clearly said that the appellant is a manufacturer of Cut Tobacco and Cigarette. Can anyone say that appellant is a manufacturer of tobacco refuse is the moot question to which the obvious answer in the light of the decision of the Tribunal in the case of Golden Tobacco Ltd. is tobacco refuse is not a final product . The Tribunal also while rendering the decision in the case of Golden Tobacco Ltd. had relied upon the decision of the Hon ble High Court of Bombay in the case of Rallis India Ltd. Vs. Union of India [2008 (12) TMI 46 - HIGH COURT BOMBAY] where a similar view was taken. Decision of the Tribunal taking a view that tobacco refuse cannot be considered as a final product of the assessee has to be considered and followed. Once we do that the provisions that nothing contained in the notification shall apply to inputs used in or in relation to manufacture of final products which are exempted, would not be applicable to the present case. Therefore just because appellant cleared tobacco refuse without payment of duty, cut tobacco which forms part of such refuse cannot be levied to central excise duty as proposed by the Revenue in these cases. The demands against the appellants, interest thereon and penalties imposed cannot be sustained. - Decided in favour of assessee.
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