TMI Blog2018 (11) TMI 1757X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 [ 2013 (8) TMI 500 - ALLAHABAD HIGH COURT ] held that if denial of statutory right for re-testing of the sample amounts of violation of principal of natural justice resulting into serious civil and criminal liability. Hon ble High Court has further hold that re-testing, for which samples are specifically drawn by the Department in accordance with para 8.1 to 8.4 of instructions issued under Central Excise Rules, 2004 could not be denied to the petitioner. The Commissioner (Appeal) has not passed any order on merits of the case, and therefore, the same is non speaking. Merely, saying that a separate show cause notice has been issued by the Commissioner regarding classification of goods based on the test reports, as above is not appropriate and he should have pass the order as per various ground contained in the appeal memorandum. The Commissioner (Appeal) has treated part fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r entire operation relating to manufacture of sale of the aforestated goods. 3. Acting on the intelligence, that the appellant is manufacturing and clearing zarda scented tobacco (ZST) in the guise of chewing tobacco (CT) and paying less amount of Central Excise Duty under compounded levy scheme. The officers of Director General of Central Excise Intelligence, Zonal Units, Bhopal, searched the factory of Kay Pan Sugandh Pvt Ltd. on 27/10/2015 in the presence of Ram Gopal Agnihotri and resumed several incriminating documents and the samples of raw materials, finished products and pouches. The Statements of Shri Ram Gopal Agnihotri was also recorded under Section 14 of the Act on 27/10/2015, wherein he, inter alia, deposed that the unit is using raw tobacco and kiwam for the manufacturing of the tobacco products. He also stated that kiwam and tobacco are the main ingredients of zarda scented tobacco (ZST) and chewing tobacco (CT). Further kiwam is tobacco dust with different spices (ilaichi, jayafal etc.,) and stated that kiwam which is used for manufacture of ZST contained edible flavouring agent kewada, khus and gulabjal. Kiwam which is used for chewing tobacco does not contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 Pvt. Ltd. Bilaspur 30.11.15 -same as above- 5 04/2015 Dated 27.10.15 Two outers each containing 65 pouches of black label brand tobacco DGCEI Kay pan Sughnadh Pvt. Ltd. Bilaspur 30.11.15 -same as above- 6 05/2015 Dated 27.10.15 Kiwam in liquid form DGCEI Kay Pan Sughandh Pvt Ltd., Bilaspur 08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20/12/2017 which is contested in these appeals by the appellants M/s Kay Pan Sugandh and Shri Ram Gopal Agnihotri. 7. Based on the aforesaid test results on the samples drawn from M/s Kaipan Pan Masala Private Limited, Bhopal, other appellant the other demands were confirmed against the 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 appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Acid Insoluble ash 5 4 10. Ld. Advocate, therefore, submits that the test reports in respect of various samples that were drawn by the Department and tested by the CRCL, do not give specific findings on dependent upon these parameters without which the report is in conclusive. 11. The Adjudicating Authority has relied upon the result of the samples without having considered the test memo which were forwarded to the CRCL. It was submitted that no test memos have been drawn in respect to samples and thus have been tested in absence thereof, and hence it would not be possible to co-relate the results in test report with samples drawn so as to classify the products manufactured by the appellant as Zarda Scented Tobacco (ZST) and not the chewing tobacco (CT) as claimed by the department. The reliance was placed on the decision of M/s Hindustan Ferodo Limited vs. CCE, Bombay, 1997 (89) ELT 16(SC)] 12. Ld. 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 Tobacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods and paid less central excise duty under the compounded levy scheme. On the other hand the appellant contention is that they have manufactured only CT during the relevant period for which appropriate declaration has been filed with the Department as per the requirement under compounded levy scheme. For better appreciation of the facts, it is necessary to go into the details of compounded levy scheme on Chewing Tobacco (CT) and Zarda Scented Tobacco (ZST), during 01/03/2015 to 07/12/2015 which is as under; S No Retail sale price (per pouch) Rate of duty per packing machine per month(Rs. In lakh) Chewing tobacco (other than filter khaini) [without lime tube/ lime pouches] Zarda scented tobacco 301 pouches per minute and above. Corrigendum dated 15.04.2010 issued to the Notf. No. 19/2010 CE dated 13.04.2010 1 Upto to ₹ 1.00 8.00 8.00 Notification No. 14/2012-CE dated 17.03.2012 1 Upto to ₹ 1.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chewing Tobacco ₹ 1 310 3 IX 10 29.09.2015 Chewing Tobacco ₹ 1 310 5 X 11 01.10.2015 Chewing Tobacco ₹ 1 310 5 XI 12 01.12.2015 Chewing Tobacco ₹ 1 310 3 XII 13 02.12.2015 Chewing Tobacco ₹ 1 310 4 XIII 14 07.12.2015 Chewing Tobacco ₹ 1 310 4 XIV 17. Thus, it can be observed that prior 01/03/2015, the applicable rate of compounded levy on CT and ZST was same and thereafter rate of compounded levy on ZST and CT was amended vide Notification No. 05/2015-CE dated 01/03/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 brown coloured cut pieces of vegetable matter ( cut bits of leaves) It has the characteristics of processed tobacco. Moisture content(as such) = 20.1 % by Wt.( Twenty decimal one). Ash content (on dry basis) =14.6 % by Wt,(Forteen decimal six). It does not contain added lime. Sealed remnant returned herewith C.NO. 35-Cus/CRCL/2015-16/CL-465 DGCEI/16.11.2015 dated 30.11.2015 F. No. DGCEI/Bhzu/12004/09/2015 dated 27.10.2015, Test memo No. 02/2015 Report The sample is in the form of yellowish brown coloured cut pie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance, 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 justice resulting into serious civil and criminal liability. Hon ble High Court has further hold that re-testing, for which samples are specifically drawn by the Department in accordance with para 8.1 to 8.4 of instructions issued under Central Excise Rules, 2004 could not be denied to the petitioner. 20. Further, we find that similar issue has come up for consideration before this Tribunal in case of Flakes-n-Flavours (supra), Wherein it was observed the product in question has to be treated as per the description of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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