TMI Blog2023 (10) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal. The question is to be answered against the Assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the Assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944. Classification of goods - HELD THAT:- The stand of the Assessee has been consistent to the effect that product manufactured by it is to be classified as 'zarda/jarda scented tobacco' and at the insistence of the jurisdictional Deputy Commissioner the Assessee was classifying the goods under CET SH 2403 9910 i.e., 'chewing toba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3487 of 2020), Civil Appeal Nos. 6523-24 of 2023 (Arising out of Diary No. 2810 of 2020), Civil Appeal No. 959 of 2019, Civil Appeal Nos. 6538-42 of 2023 (Arising out of Diary No. 14581 of 2019), Civil Appeal No. 6531-37 of 2023 (Arising out of Diary No. 44912 of 2019), Civil Appeal No. 6525 of 2023 (Arising out of Diary No. 3484 of 2020), Civil Appeal No. 6526 of 2023 (Arising out of Diary No. 3513 of 2020), Civil Appeal No. 6527 of 2023 (Arising out of Diary No. 3536 of 2020), Civil Appeal No. 6528 of 2023 (Arising out of Diary No. 3544 of 2020), Civil Appeal No. 6529 of 2023 (Arising out of Diary No. 3545 of 2020), Civil Appeal No. 6530 of 2023 (Arising out of DIARY No. 3547 of 2020), Civil Appeal No. 5146 of 2015 and Civil Appeal No. 3596 of 2023 S. Ravindra Bhat and Aravind Kumar, JJ. For the Appellant : Mr. B. Krishna Prasad, AOR Mr. S.K. Bagaria, Sr. Adv. Mr. Ramesh Singh, Sr. Adv. Ms. Sheena Taqui, Adv. Ms. Akansha Saini, Adv. Mr. Ajit K Sinha, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR Mr. N. Venkatraman, A.S.G. Mr. Mukesh Kumar Maroria, AOR Ms. Nisha Bagchi, Adv. Mr. H.R. Rao, Adv. Mr. S.K. Singhania, Adv. Ms. Aakansha Kaul, Adv. Mr. Shetty Uday Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner Of Central Goods and Service Tax Excise and Customs Bhopal v. Kaipan Masala Pvt. Ltd. [ Diary No. 44912 of 2019; Diary No. 6888 of 2020] i. Brief Facts 73 78 ii. Submissions of Parties 78 81 iii. Discussion and Findings 81 86 4. M/S Dharampal Premchand Ltd. V. Commissioner of Central Excise [ C.A. No. 2469 of 2020 along with Diary No. (s) 3492, 3487, 2810, 3484, 3513, 3536, 3544, 3545, 3547 of 2020.] i. Brief Facts 86 90 ii. Submissions of Parties 90 94 iii. Discussion and Findings 95 116 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and brevity. 6. For ease of reference, the following table No. 2 of nomenclatures/abbreviations is made available below. TABLE 2 Sr. No. Nomenclature/ Abbreviation Particulars / Meaning 1. BIS Bureau of Indian Standards 2. CBIC Central Board of Indirect Taxes and Customs 3. CETA Central Excise Tariff Act, 1985 4. CE ACT Central Excise Act, 1944 5. CET SH Central Excise Tariff Sub-Heading 6. CESTAT Customs, Excise and Service Tax Appellate Tribunal 7. CTPM Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 8. CRCL Central Revenue Control Laborato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 4. Notification: 16/2010 CE. Dated 27.02.2010 prescribing rate for branded unmanufactured tobacco and chewing tobacco. 5. Notification: 17/2010 CE (NT) dated 13.04.2010- Notifies Jarda scented tobacco under Section 3A. 6. Notification 18/2010 CE (NT) dated 13.04.2010 Prescribing the capacity deemed to have been produced for chewing tobacco (including Filter Khaini), Unmanufactured Tobacco and Jarda Scented Tobacco. 7. Notification: 19/2010- C.E. dated 13.04.2010 prescribing the rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 8. Notification: 14/2012 CE Dated 14.03.2012 prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 9. Notification: 2/2014 C.E. dated 24.01.2014 prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 10. Notification: 17/2014 C.E. dated 11.07.2014 Prescribing the new rate for chewing tobacco, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words [one year], the words five years were substituted. Explanation. - Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be. [(1A) When any duty of excise has not been levied or paid or has been shortlevied or short paid or erroneously refunded, by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I (4). The Finance Act,1987, inserted CET SH 2404.39 with effect from 01.03.1987. The heading included the following: Chewing tobacco including preparations commonly known as Khara Masala, Kiwam, Dokta, Zarda, Sukha and Surti . Thus, for the first time 'Zarda' was recognized separately as preparation. 12. In 1996-97, CET SH 2404.40 was reformulated to read chewing tobacco and preparations containing chewing tobacco . 13. In 2002, Under Section 4A of the CE Act, Notification No.13/2002 - CE (NT) dated 01.03.2002 was issued prescribing abatement as percentage of retail sale price. However, it is to be noticed that Notification No. 13/2002 had not covered 'Chewing Tobacco' reflecting under the relevant Entry 2404.21, within its ambit of 'notified goods' for the purposes of availing benefits Under Section 4A. However, subsequently by Notification No. 10/2003 - CE (NT) dated 01.03.2003 was issued introducing Entry 24A in Notification 13/2002 dated 1.03.2002, thereby covering all goods under entry 2404.41 within the ambit of 'notified goods' for the purposes of Section 4A of the CE Act. 14. Prior to the introduction of the 8-digit tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outset, it must be mentioned that the findings and conclusions arrived at will pertain to the issues formulated and adjudicated in light of the facts relevant to those groups, and hence, the findings are mutually exclusive to the facts of each group. I. COMMISSIONER OF CENTRAL EXCISE AHMEDABAD v. M/S URMIN PRODUCTS AND ORS. [C.A. No. 10159 - 10161 OF 2010] BRIEF FACTS 19. In these appeals, the Revenue has challenged the order dated 25.03.2010 passed by the jurisdictional CESTAT whereunder the classification given by the Assessee was accepted as flavoured chewing tobacco falling under CET SH 2403 9910 and not as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930 of CETA. 20. The Assessee came to be visited with a show cause notice dated 09.07.2007 stating thereunder that the Assessee had been manufacturing and clearing the product manufactured by it as 'zarda/jarda scented tobacco' under the guise of 'chewing tobacco.' During the visit to the Assessee's factory by the Department's officers, they noticed the process of manufacturing 'zarda/jarda scented tobacco.' The statement of the production manager and also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Flavoured Chewing Tobacco. It is not the case of the department or the party that there was change in the label or manufacturing process. From the description in the label, it is quite clear that the product is called Flavoured Chewing Tobacco. No expert opinion or information from the trade have been obtained and it is only the statement of factory manager that the product is usually eaten with Pan, Betel nut or Pan Masala etc. Department has come to the conclusion that the product is not Chewing Tobacco. Further, as submitted by the Appellant, nowhere in the statement of the employees, it has been stated that Zarda Scent was added. Under these circumstances, in view of the above discussion, neither side has been able to show whether the product is Chewing Tobacco or Zarda Scented Tobacco clearly. Both sides have some points in their favour and some against them. Under these circumstances, in view of the fact that the label calls the product as Flavoured Chewing Tobacco, no Zarda Scent has been used and the product has not been sold as Zarda Scented Tobacco by the Appellant, we consider that the claim of the Appellant that the product is Flavoured Chewing Tobacco has to be acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;chewing tobacco' was 50 percent, therefore if the goods are cleared as 'chewing tobacco' the duty has to be paid on lower value, resulting in payment of such amount of duty as the value determined Under Section 4A of CE Act, after 50 percent abatement, which was much less as compared to transaction value Under Section 4 of CE Act. It is further contended by the Revenue that 'zarda/jarda scented tobacco' was brought into the ambit of Section 4A of CE Act, by amendment to Notification No. 16 dated 11.07.2006 and thus the product 'zarda/jarda scented tobacco' was not specified for assessment Under Section 4A of the CE Act, for the period 01.03.2006 to 10.07.2006. Hence, the Revenue sought to justify the demand of duty short paid by the Assessee by invoking the proviso Under Section 11A (1), along with interest, at the appropriate rate Under Section 11AB of the Act 1944. 25. The learned Senior Counsel for the Revenue would further elaborate his submissions by contending that the Assessee has not shown any proof of record for concluding that 'zarda/jarda scented tobacco' is also 'chewing tobacco'. By contending that this tariff classifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up it would fall under CET SH 2403 9930 as 'zarda/jarda scented tobacco'. 27. The Revenue also contended that tribunal in paragraph 21 of the impugned order having held that both sides have some points in their favour and some against them failed to elaborate or assign the reasons for extending the benefit of Section 4A to Assessee and on this ground alone the impugned order is liable to be set aside. 28. The Revenue would also contend that tribunal committed a serious error in concluding that show cause notice should have been issued within one year period as the Assessee intimated their intention to change the classification and contended that the Assessee has not mentioned any details of the products which they were manufacturing at that material time but had only forwarded a cryptic communication, lacking details and bereft of material particulars, namely the intention of changing the heading and classification of the product which was being manufactured by them and no evidence for reasons of change was forthcoming from the said communication, and as such the Assessee cannot take umbrage under the said communication to stave-off its liability or, to contend that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;chewing tobacco' and 'zarda/jarda scented tobacco', which expressions are not defined under the Act and no explanation is provided on what products could possibly have been covered under the heading 'zarda/jarda scented tobacco', or what is the scope of that heading. In that view of the matter, he would contend that the 'Common Trade Parlance Test' as has been enunciated by this Court will have to be applied and tested. He would also further contend that classification is a question relating to chargeability and, therefore, the burden of proof lies on the Department, for which no evidence whatsoever has been adduced by the Department to justify the change. It is his submission that any change in the classification has to be based on something more than just change in tariff entry. Even otherwise, if classification is possible under two entries, the one more beneficial to the Assessee would be adopted. Hence, relying upon the following judgments he prays for dismissal of the appeal filed by the Revenue: 1. HPL Chemical Ltd. v. CCE 2006 197 ELT Chandigarh 324 (SC) 2. Mauri Yeast India Pvt. Ltd. v. State of U.P. (2008) 5 SCC 680 3. C.G. S.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'chewing tobacco' though he had declared earlier as 'zarda/jarda scented tobacco'. Thus, by virtue of such deletion/omission in light of Notification No. 13 of 2002, the assessment was required to be made Under Section 4 which provides for the valuation of excisable goods for purposes of charging of duty of excise. In other words, the benefits that were flowing from the operation of Section 4A having been excluded by virtue of the Notification dated 01.03.2006, the Assessee reverted to 'chewing tobacco' to avail the benefit of Section 4A. In the light of the analysis of these notifications vis- -vis the statutory provisions of the levy of duty or chargeability, it would not detain us for long to answer the questions formulated hereinabove. RE: Q. No. 1 Issue of Limitation/ Section 11A of the CE Act: 36. In the instant case i.e., Civil Appeal Nos. 10159-10161 of 2010 - CCE Ahmedabad v. M/s. Urmin Products Pvt. Ltd. the show cause notice came to be issued on 09.07.2007 and the OIO came to be passed on 28.01.2008 which resulted in the impugned order dated 25.03.2010. 37. The tribunal by the impugned order has held to the following effect: 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of any approval, acceptance or assessment relating to the rate of duty or on valuation of excisable goods under any other provisions of the CE Act or the Rules made thereunder, the Central Excise Officer can, within one year from the relevant date, serve a notice on the person chargeable with duty which has not been levied or unpaid or which has been short levied or short paid or to whom the refund has been erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. 40. Notification No. 2 of 2006 dated 01.03.2006 was issued in supersession of Notification No. 13 of 2002 dated 01.03.2002 specifying thereunder the goods covered Under Section 4A of Act 1944 for MRP-based assessment. It was noticed that the notification did not specify the goods falling under CET SH 2403 9930 ('zarda/jarda scented tobacco') but covered the goods falling under CET SH 2403 9910 ('chewing tobacco'). Since the 'zarda/jarda scented tobacco' was not specified under MRP-based assessment Under Section 4A of CE Act, the goods had to be assessed Under Section 4 of the CE Act. The abatement provided to the goods classified under CET ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not indicate that the author of the said letter intended to reveal any details about the product that is being manufactured. However, the Assessee cannot feign ignorance as to the necessity of furnishing such relevant details necessary for determination of payment of duty. The Assessee having been in this industry for a long period was well aware of this statutory requirement. Upon a deeper examination of the said letter, the suppression becomes more apparent, namely the non- mentioning of change of the name and classification of the goods which they were currently manufacturing and which they ought to have disclosed. It would be apposite to note the judgment of this Court in Continental Foundation Jt. Venture v. Commissioner of Central Excise (2007) 10 SCC 337 that suppression means failure to disclose full information with intent to evade payment of duty. It has been further held: 12. The expression suppression has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.03.2006 by the Assessee also acquires significance in as much as the Notification No. 2 of 2006 dated 01.03.2006 were to take effect from 01.04.2006 and just two days before the date of the said Notification No. 2 of 2006 coming into effect, this communication dated 30.03.2006 has been forwarded to the Department by the Assessee. The intention of springing up such a letter is evident from the fact that intention was to evade payment of duty payable Under Section 4 of CE Act; despite knowing the fact that its product was not covered under relevant notification which provides for valuation Under Section 4A, yet the Assessee did so, only to pay duty on lower value as per Section 4A of CE Act, by claiming the product manufactured by it as 'chewing tobacco' rather than 'zarda/jarda scented tobacco' to avail benefit of MRP-based assessment which was lower than the value as prescribed Under Section 4 of the CE Act. 43. Yet another factor which cannot go unnoticed is the statement of the production manager and factory in-charge and manager recorded at the time of the inspection of the units/factory of the Assessee, whereunder they have clearly admitted in their statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show the reasons in the statement recorded Under Section 4 on 26-6-2006 when the department caught him for evading the duty. Further, the Assessee has mentioned that as per the practice followed by their industry, they classify their product Chewing tobacco into 2403 9910. The classification of the goods manufactured by an Assessee is based on many factors including the raw material used, manufacturing process and the end use. If any of the deciding factors is changed then the classification may change and therefore the industry cannot decide the classification in such type of goods. The Assessee intentionally hid the fact that they have changed the classification of their product viz. 'Jarda scented tobacco'. It is an establish fact that when there is no dispute on classification and the Assessee suddenly submits a very carefully drafted letter of such type, a general inference will be drawn that a new product has been introduced in place of earlier one. The Assessee, with intent to evade the Central Excise duty, deliberately resorted to mis-statement and willfully suppressed the vital facts. The Assessee had changed and misclassified the product from 'Jarda scented t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944. RE: Q.2 - WHETHER Assessee'S CLASSIFICATION FOR THE PERIOD IN DISPUTE IS TO BE ACCEPTED? 44. In the instant case the principle of admission is the best proof that can be applied to conclude that the Assessee itself had classified the product as 'zarda/jarda scented tobacco' based on the declaration in ER-I returns for April 2006 and onwards. On advent of 8-digit era under the CETA, 'chewing tobacco' was classified under CET SH 2403 9910, and 'zarda/jarda scented tobacco' came to be separately classified under CET SH 2403 9930 from 01.03.2005 despite such classification, the notification issued in respect of goods to be assessed on the basis on MRP continued to show the tariff heading and the goods covered under 'chewing tobacco' head as 2404.41. When Notification No. 2 of 2006 dated 01.03.2006 came to be issued and it reflected under Serial No. 28 that all goods classified under entry SH 2403 9910 to 2403 9920 were covered for MRP assessment and the product 'zarda/jarda scented tobacco' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) digit tariff era. The tribunal itself seems to have been in dilemma and has been swayed by the fact that no expert opinion had been obtained by the Department for classification. This situation would not arise at all for reasons more than one, firstly, the Assessee itself right from the beginning has been consistently declaring the product manufactured by it as 'chewing tobacco' till the 8-digit regime in 2005 (w.e.f. 24.02.2005) sub-classified the entries as 'chewing tobacco' and 'zarda/jarda scented tobacco'. In the ER-I returns filed from March 2005 till April 2006 i.e., after the sub- classification, the Assessee mentioned the description of the product as 'zarda scented tobacco' and from April 2006 reclassified it as 'chewing tobacco'. 47. At the cost of repetition it requires to be noticed that the Notification No. 2 of 2006 dated 01.03.2006 was issued in supersession of Notification 13 of 2002 dated 01.03.2002 specifying the goods covered Under Section 4A of the CE Act, for MRP based assessment. The said notification did not specify the goods falling under CET SH 2403 9930, i.e., 'zarda/jarda scented tobacco', but it cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. FLAKES-N-FLAVOURZ [C.A. 5146/2015] 50. In the instant group, the Revenue is in appeal assailing the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi dated 20.02.2014 by the jurisdictional tribunal. BRIEF FACTS 51. The Respondent-Assessee is the manufacturer of zarda, pan chatni and scented supari falling under the category of excisable goods under the CETA, and was clearing its product 'Gopal Zarda' under CET SH 2403 9910 as 'chewing tobacco' and paid excise duty based on retail sale price Under Section 4A of the CE Act, (hereinafter to referred as CE Act ). During the audit, it was found that the Assessee's product merits classification under CET SH 2403 9930 as 'Zarda/Jarda scented Tobacco'. On redetermination of value Under Section 4 of the CE Act it was found that the Assessee has short-paid excise duty by Rs. 4,28,65,508/- and accordingly, a show cause notice came to be issued Under Section 11A of the CE Act. The Commissioner of Central Excise, in his OIO dated 02.04.2008 confirmed the demand of duty, interest, penalty and held that the product manufactured by the Respondent- Assessee fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a'. Reiterating the contentions raised, grounds urged and pleas put forward Civil Appeal No. 10159-161 of 2010 (M/s. Urmin Products Private Limited), she prays for allowing this appeal. 55. Per contra, Mr. Vivek Kohli, learned Senior Counsel, appearing for the Respondent has reiterated the contentions raised and grounds urged before the tribunal. He would contend that throughout the period before dispute, during the disputed period and even after the disputed period, the product manufactured by the Assessee was classified as 'chewing tobacco/ flavoured chewing tobacco'. Even the ER-1 returns and weekly online returns filed by the Assessee classifying the product as 'chewing tobacco' were accepted by the Revenue without any objection. He would contend that even after introduction of 8-digit tariff for full one year i.e., from 1.03.2005 to 28.02.2006, the Assessee classified its product under tariff entry number 2403 9910 and discharged its tax liability Under Section 4A of CE Act, which was accepted with full knowledge by the Revenue and raising objection during audit of the unit for the period 1.03.2006 to 11.07.2006 is possibility of higher Revenue during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Assessee, the department noticed that the Assessee was manufacturing 'zarda/jarda scented tobacco' and was claiming it as 'chewing tobacco'. The stand of the Assessee has been that they were manufacturing varieties of flavoured 'chewing tobacco'. Hence, the statement of the partner of the Assessee came to be recorded on 15.02.2007, which has been noticed in paragraph 3 of show cause notice dated 30.03.2007. Hence, we do not propose to extract the same. A perusal of the said statement would indicate the manner in which the product has been manufactured. It is admitted in the statement given by the partner of the Assessee, that raw tobacco is mixed with an additive mixture which is manufactured by mixing perfumery compounds received from the noticee's Delhi Unit itself. He also admits that to this perfumery mixture, further compounds are added for making various types of tobacco to be manufactured. Based on this statement and precisely for the reason that the product manufactured by the Assessee seems to not be 'chewing tobacco', aforesaid show cause notice dated 30.03.2007 came to be issued by calling upon the Assessee to show cause as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ganized and reclassified as 'chewing tobacco' (2403 9910), a preparation containing the 'chewing tobacco' (2403 9920) and 'zarda/jarda scented tobacco' (2403 9930). Circular No. 808/5/2005-CX dated 25.02.2005 came to be issued whereunder classification was given that the subsisting notification having a six-digit enumeration should be read in terms of the eight-digit of the new Central Excise Tariff. On 01.03.2006, Notification No. 02/2006 came to be issued by virtue of which a Notification No. 13/2002 dated 01.03.2002 was superseded. Thus, the list of products with their respective chapter headings/sub-headings, which were to be covered under the MRP-based assessment in terms of Section 4A of the CE Act, was notified in terms of an Eight-digit tariff. In the said notification 'zarda/jarda scented tobacco' was left out or was not included for MRP-based assessment. Subsequently, by clarificatory Notification No. 16/2006 dated 11.07.2006, the product 'zarda/jarda scented tobacco' was brought back within the MRP-based assessment benefit. Thus, the burning issue would be between the period 01.03.2006 to 11.07.2006 which in the instant case relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the product. In such circumstances, Section 2 of the CETA, 1985 provides that the rates at which duties of excise shall be leviable under the CE Act, are specified in the first and second schedules. The first Schedule contains a set of Rules known as general Rules for the interpretation of this schedule . These Rules begin with a mandate that the classification of goods in this Schedule shall be governed by the following principles laid thereunder. This Rule had received interpretation of this Court in the matter of Westinghouse Saxby Farmer Ltd. v. Commissioner of Central Excise, Calcutta, (2021) 5 SCC 586 whereunder it came to be held as follows: 26. Rule 1 of these Rules makes it clear that the titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only and that for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and provided such headings or Notes do not otherwise require, according to the provisions of the Rules that follow . 27. Rule 2 deals with (i) incomplete or unfinished articles; and (ii) mixtures or combinations of material or substance. While Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely, whether sole or principal usage test is to be applied? This Court in Westinghouse Saxby Farmer Ltd.'s case (supra) had an occasion to deal with similar issues and took note of the earlier dicta of this Court rendered in A. Nagaraju Bros. v. State of A.P., 1994 Supp (3) SCC 122 and held there is no 'one' single universal test in this matter. 65. Keeping these aspects in mind when the facts on hand are perused it would disclose the product manufactured by the Assessee-Respondent is sold as 'Gopal zarda' and both the members of the tribunal namely, technical members and judicial members are ad idem on the issue of the manufacturing process of the goods and the product in question namely, they all agree that tobacco flavouring substance is added and the judicial member has clearly held that the product is marketed as flavoured chewing tobacco . This addition of scent or flavour in the 'chewing tobacco' was contended to be 'zarda/jarda scented tobacco' by the Revenue, whereas the Assessee has taken a stand that by addition of the scent or flavour, it would not partake the character of the 'zarda/jarda scented tobacco' but continues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s combination. Chewing tobacco can be used independently as well. Zarda Tobacco: Zarda is more commonly associated with being used in combination with betel nut and paan. This combination is often considered a traditional practice in some South Asian cultures. 67. At this juncture, it may be relevant to draw a distinction between the facts of the instant case and the facts in the case of Urmin supra. In the present factual scenario, there has been a consistent and clear classification provided by the Assessee, which was accepted by the Revenue, prior to the dispute arising from the audit objection raised by the concerned assessing officer. 68. Unlike the facts as narrated above in Group I, i.e., Urmin, whereunder the Assessee therein had sought to change the classification of the goods manufactured by them, particularly when there was a difference in the duty, and a much higher duty was required to be paid by the Assessee. Whereas in the instant case on hand, there has been no change in classification of the product which was sought by the Assessee. It is settled law that the onus/burden of proof for change in classification of the product lies on the Department, parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue to disprove the said materials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that nylon twine manufactured by the Assessee has been treated as a kind of nylon yarn by the people conversant with the trade. It is commonly considered as nylon yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has failed to establish the contrary. We would do well to remember the guidelines laid down by this Court in Dunlop India Ltd. v. Union of India [(1976) 2 SCC 241: AIR 1977 SC 597] in such a situation, wherein it was stated: (SCC p. 254 AIR p. 607, para 35) 'When an Article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause.' 69. Given the circumstances in the present case, the Department has not provided any sufficient evidence before this Court determine the nature, characteristics, contents, and composition of the product in order to adjudicate the present dispute p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the tests and analysis reports of the products manufactured by the Respondent Assessee. The relevant facts were very much within the knowledge of the Department authorities. The Department did not make any attempt to lead any evidence that there was any wilful misstatement or suppression of facts with intent to evade payment of duty. 70. Classification is a question relating to chargeability . It is well settled law that insofar as chargeability is concerned, the burden of proof lies on the Revenue and not on the Assessee. In the facts obtained in the present case, no evidence of whatsoever nature has been placed by the Revenue to raise any presumption. In fact, the entire proceedings are based upon audit objection and the Revenue attempts to rely upon the additives to the 'chewing tobacco' as the basis for arriving at a conclusion, that Assessee had cleared the 'jarda/zarda scented tobacco' which is not even supported by the samples drawn or inquiry made from the traders or consumers or stockist, suppliers and buyers. In the absence of iota of material, the finding of the tribunal cannot be displaced. It would be of benefit to extract the finding reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted zarda/jarda tobacco' which is different from 'chewing tobacco.' They also informed that the nomenclature of 'chewing tobacco' is being used as there was no difference in the capacity of production as well as the rate of duty before the budget of 2015-16. In response to the said letter of the Assessee, the Range Superintendent vide his letter dated 19.03.2015 requested the Assessee to submit the manufacturing process of their product. Hence, the Assessee vide its communication dated 24.03.2015 informed that 'chewing tobacco' and 'scented zarda/jarda tobacco', both contain the same ingredients. 75. A Notification No. 25/2015-CE dated 30.04.2015 was brought with effect from 01.05.2015 whereby the rate of Central Excise Duty of 'zarda/jarda scented tobacco' came to be amended again but there was no change in the rate of duty on 'Chewing Tobacco' as compared to 'zarda/jarda scented tobacco'. 76. The assesee vide communication dated 28.05.2015 intimated to the department that with effect from 01.06.2015, they would be manufacturing 'chewing tobacco' falling under CET SH 2403 9910 instead of 'scented zarda/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicated vide order dated 16.07.2018 whereunder demand of duty amount of Rs. 7,47,66,000/- along with interest and penalty came to be passed. Being aggrieved by the said order, the Assessee has filed an Appeal No. E/53421/2018-EX(DB) before CESTAT, New Delhi which is pending; however, the Assessee has simultaneously proceeded to challenge the order dated 23.10.2017 passed by the Commissioner (Appeals) before the tribunal in Appeal No. E/50468, 50469, 50470, 50471, and 50472 of 2018 which came to be allowed vide order 14.11.2018. Hence, the Revenue is in appeal in Civil Appeal Diary No. 6888 of 2020 against the said order the order dated 14.11.2018 passed by the CESTAT. 78. Similarly, the Revenue has also come in appeal in Civil Appeal Diary No. 44912 of 2019 against the order dated 14.11.2018 passed in Excise Appeal 51978 of 2018 and Excise Appeal No. 51319 of 2018 against the Respondent-Assessee wherein the Show Cause Notice dated 01.03.2017 was issued for the payment of differential duty of Rs. 16,95,33,000 by the Directorate General of Central Excise Intelligence Bhopal for the period of June 2015 to February 2016 which culminated in order-in-original dated 20.12.2017. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operate different number of machines in each of the months under dispute. It is contended that had there been any malafide intentions to wrongly claim the benefit reduced rate of duty on CT, the assess would have either increased its production by increasing the number of operating machines or at least would have maintained the very same number of operating machines. However, every month the Assessee was consistently reducing the operating machines as per the demand of its product in the market. The decision to manufacture ZST prior to the period of dispute, and to manufacture CT during the period of dispute as well as using different number of packing machines every month was purely a commercial decision taken by the Assessee based on several factors. By supporting the order of the tribunal, it is contended that CT and ZST are different product and known as such in the market and as such there cannot be a flip flop by selling same product in two different names. It is also canvassed that no enquiry was conducted by the department to ascertain the classification of the product namely no market enquiry was conducted to ascertain the common parlance understanding of the product. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the manufacturing of 'scented zarda/jarda tobacco'. It is for this precise reason, the proceedings for misdeclaration and misclassification came to be initiated and OIO dated 28.08.2015 came to be passed which was affirmed in appeal on 23.10.2017. The adjudicating officer after having taken note of the chemical examiner's report dated 03.08.2015, whereunder it was found that the 'chewing tobacco' manufactured by the Assessee contains identical ingredients that are contained in 'zarda/jarda scented tobacco' had arrived at a conclusion that the Assessee has mis declared and misclassified its goods as 'chewing tobacco' instead of 'scented zarda/jarda tobacco'. 84. When the Assessee itself vide a letter dated 18.03.2015 (refer to in para 6.4 at page 95 of order in original dated 16.07.2018) has intimated that the product manufactured by it was 'zarda/jarda scented tobacco'. The stand or change of the nomenclature by the Assessee contending that it is only 'chewing tobacco' is completely misplaced for three reasons namely: (1) there was no change in the manufacturing process of both the items and the product was claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewing tobacco' was changing. The view taken by adjudicating authority is based on factual evaluation which derives its support from the CRCL Report which confirmed that the samples drawn has the same ingredients as that of 'zarda/jarda scented tobacco' and thereby rightly confirmed the duty demanded under the Show Cause Notice. The findings recorded by us in Group No. 1 in matter of M/s. Urmin Products with regard to classification would squarely be applicable to the facts on hand and as such both these appeals deserved to be allowed by setting aside the impugned order of the tribunal. IV. M/S DHARAMPAL PREMCHAND LTD. v. COMMISSIONER OF CENTRAL EXCISE - CA No. 2469 OF 2020, DIARY No. 3492, 3487, 2810, 3484, 3513, 3536, 3544, 3545 AND 3547 OF 2020 BRIEF FACTS 87. The Assessee is in appeal before this Court assailing the common impugned Final Order dated 06.01.2019 passed by CESTAT, Allahabad. At the outset, we would like to state that the findings recorded and observations made under the present group of appeals are confined to this group only. The period of dispute involved in these appeals relates to May 2015 to January 2016. 88. The declarations fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT, which came to be rejected by Final Order No. A/71893-94/2019-EX (DB) dated 06.11.2019. 90. Hence, the present appeals came to be filed by Assessee before the Tribunal in respect of: a. The adjudication orders in the show cause notices dated 04.05.2016. b. The appellate orders confirming the amendments made to the declarations on and after 08.01.2016 from 'chewing tobacco' to 'zarda/jarda scented tobacco'. c. A refund claim made in respect of duty paid in February 2016 under protest after the declaration was modified. d. Abatement/ refund granted but appropriated towards payment of duty. 91. The dispute in all these appeals revolved around the classification of the impugned product. The tribunal by common order dated 06.11.2019 dismissed the appeals and upheld the orders impugned before it. 92. Being aggrieved by the order of the tribunal dated 06.11.2019 these appeals have been filed. SUBMISSIONS OF THE PARTIES 93. The thrust of the arguments canvassed by Mr. S.K Bagaria, learned Senior Counsel appearing for the Appellant/Assessee is: the original authority had acted beyond the jurisdiction and travelled beyond the powers v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct as 2403 9910 was approved and orders were passed by the Deputy Commissioner upto 23.09.2015 though a higher rate had been prescribed for 'zarda/jarda scented tobacco' by Notification No. 25 of 2015 dated 30.04.2015 which product was manufactured by the Assessee. She would contend that 'zarda/jarda scented tobacco' was notified Under Section 3A of CE Act, vide Notification No. 17 of 2010 dated 13.04.2010 and by Notification No. 18 of 2010 dated 13.04.2010, the CTPM Rules were amended to cover 'zarda/jarda scented tobacco'. She would contend that the declarations filed by the Assessee were determined and/ or adjudicated after affording a personal hearing and by relying upon the admission/statement made by the General Manager of the Assessee during the personal hearing, the Deputy Commissioner has modified all subsequent declarations which came to be confirmed by the appellate authority. She would also place reliance upon the CRCL report to contend that the samples drawn from one of the units had a pleasant odour/fragrance. She would draw the attention of the Court to the findings recorded by the tribunal which is to the effect that the use of saffron and sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the classification of the product and on account of the classification of such declaration, would preclude the Department from issuing a Notice Under Section 11A or 11AC of CE Act, 1944? DISCUSSION AND FINDINGS 97. While adjudicating the above questions/points, the answer to one is likely to overlap with the other and as such we propose to adjudicate these questions together and we propose to answer them accordingly and record conclusion question or point-wise. 98. For undertaking the aforesaid exercise, it would be necessary to examine the applicable Rules in question i.e., 'Chewing Tobacco' and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. The aforesaid Rules came to be notified by Notification No. 11 of 2010 dated 27.02.2010 which came into force from 08.03.2010. The aforesaid Rules were made applicable to the goods specified and notified as per Section 3A. 'Chewing tobacco' was notified Under Section 3A by Notification No. 10 of 2010 dated 27.02.2010 and 'zarda/jarda scented tobacco' was specified as notified goods Under Section 3A of CE Act, 1944 by Notification No. 17 of 2010 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used by him in each such part or section, to the jurisdictional Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the jurisdictional Superintendent of Central Excise: Provided that a new manufacturer shall file such declaration at least seven days prior to the commencement of commercial production of notified goods in his factory. (2) On receipt of the declaration referred to in Sub-rule (1), the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, shall, after making such inquiry as may be necessary including physical verification, approve the declaration and determine and pass order concerning the annual capacity of production of the factory within three working days in accordance with the provisions of these rules. Provided that the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, may direct for modifications in the plan or details of the part or Section of the factory premises intended to be used by the manufacturer for manufacture of notified goods of different retail sale prices, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be required to make such inquiry as may be necessary including physical verification by determining the correctness or otherwise of such declaration concerning the annual capacity of production of the factory. The nomenclature of the Rule would itself indicate that the said Rule is called as Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity, determination and collection of duty) Rules, 2010 . A combined reading of Clause (i) to (x) of Sub-rule (1) of Rule 6 would indicate during the inquiry contemplated Under Sub-rule (2), the adjudicating authority would be determining the annual capacity production of the factory and the Competent Authority would be required to take into consideration the details of the track packing machines installed in the factory, the number of packing machines which are available and the Assessee intending to operate in his factory, number of multiple tracks or multiple line packing machines available and to be used or operated with and without lime tube. The maximum packing speed of such machines, various retail sale prices, description of goods to be manufactured including whether 'unmanufactured tobacco' or 'chewing tobacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the part or Section of the factory premises intended to be used by him for manufacture of notified goods of different denomination of retail sale prices and the number of machines intended to be used by him in each of such part or section: (15) Declaration (a) I/We further declare that the particulars furnished above are true and correct in all respects. In case any particulars are found to be untrue/incorrect, I/We undertake to pay any additional amount of excise duty on notified goods manufactured by me/us as per provisions of the Central Excise Act, 1944 (1 of 1944) or the Rules made or notifications issued thereunder. (b) I/We further undertake that any addition or removal of the packing machine would be done under the physical supervision of the Central Excise Officer as per the procedure provided in the Chewing Tobacco and unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. (c) I/We hereby agree to abide by the provisions and conditions of the Chewing Tobacco and unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. Place: Date: Name, residential ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to cover zarda/jarda scented tobacco. As such the Assessee contended that the adjudicating authority would not be within his powers to determine the classification. 106. A holistic reading of Rule 6 would indicate that the details prescribed thereunder alone would be the subject matter of determination concerning the annual capacity of production of the factory. The second proviso to Rule 6 would clearly indicate that the Prescribed Authority is empowered to modify the declaration on the facts obtained from such declaration. While undertaking such exercise of determination and passing orders concerning the annual capacity of production of the factory as contemplated Under Sub-rule (2) of Rule 6, the Prescribed Authority would have to take into consideration the issue relating to the classification of the product. We say so for reasons more than one, firstly, the details required to be furnished as prescribed under Clause (i) to (x) of Sub-rule (1) of Rule 6 would indicate that apart from details mentioned therein, the declarant will have to specify the description of goods to be manufactured without specifying the classification entry to the Central Excise Tarif Act. On the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by such declaration, if found to be untrue or incorrect. This undertaking would reinforce the fact that even in case of acceptance of such declaration by the Competent Authority, it does not preclude them thereafter to demand the differential duty on account of short demand to recover such duty, and necessarily complying with the principles of natural justice. 107. As noticed hereinabove both the parties have relied upon the judgment of this Court in CCE v. Cotspun (supra) whereunder this Court has held that once there is the levy of excise duty on the basis of an approved classification list, until the correctness of the approval of the question by issuance of a show cause notice to the Assessee, same cannot be disturbed. It has been further held that levy of excise duty on the basis of an approved notification is not a short levy. It was also held that differential duty cannot be recovered on the basis that it is a short levy and revised assessment could be made effective prospectively from the date of the show cause notice and not with reference to earlier removals made under an approved classification list. In this background, it came to be held that as long as classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss otherwise directed by the Proper Officer, determine the duty payable on the goods intended to be removed in accordance with such list vide sub- Rule (2) of Rule 173-B. Whereas the corresponding Rule 6 in the instant case does not indicate or remotely suggest declaration of such classification is required to be made. However, Rule 6(2) only prescribes the description of the goods to be specified by the declarant in his declaration. Hence, this would result in casting additional onerous responsibility on the Competent Authority to undertake the exercise of ascertaining as to the nature of the goods and its classification under CETA for proper determination of production capacity of the machine. It would also be apposite to note the judgment of this Court in CCE v. Srivallabh Glass Works Ltd. (2003) 11 SCC 341 whereunder the Cotspun's case (supra) was distinguished on facts and held that Cotspun's case (supra) only lays down that so far as classification list subsists, the differential duty cannot be claimed on the same product mentioned in the classification list, however, if the product being cleared is different from the one mentioned in the classification list, the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under Rule 6(2) of CTPM Rules? ANSWER: Yes. (4) Whether a declaration made Under Rule 6 has any nexus to the classification of the product? ANSWER: Yes, for the purpose of determining the packing capacity and corresponding duty. (5) Whether on account of classification by such declaration, would preclude the Department from issuing a Notice Under Section 11A or 11AC of CE Act, 1944? ANSWER: No, if there is improper or misdeclaration or improper declaration. 110. In the light of the findings recorded herein above, we are of the considered view that the impugned orders of the tribunal would not be sustainable and the order of the adjudicating authority deserves to be upheld, consequently these appeals deserves to be allowed, except Civil Appeal arising out of Diary No. 3487 of 2020 which is directed against the order dated 06.11.2019 passed by the CESTAT in Excise Appeal No. 70242 of 2018., which stand on a different footing and hence the said appeal is taken up for consideration and disposed of by the following order. 111. The Appellant-Assessee filed an abatement claim amounting to Rs. 1,99,41,935/- before the Deputy/Assistant Commissioner, Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on 'Zarda/Jarda Scented Tobacco'. The Revenue drew samples of the product on 13.03.2015 and forwarded the same to the CRCL who by its report dated 23.03.2015 classified the product as 'chewing tobacco'. Accordingly, the Assessee was informed on 27.04.2015 that the product is to be classified as 'chewing tobacco'. 115. Accordingly, the Appellant-Assessee submitted revised Form No. 1 on 23.05.2015 and informed that they would manufacture 'chewing tobacco'. Notification No. 25 of 2015 which came into effect from 30.04.2015 under which the rate of duty for packing machine per month was notified on 1.03.2015. Hence, the Department drew fresh samples under Panchnama dated 29.05.2015 and forwarded the same to CRCL for obtaining the report. The CRCL forwarded the report on 20.07.2015 without classifying the product. On being asked to classify the tariff entry by the Revenue, the Chemical Examiner vide communication dated 27.07.2015 refused to do so stating assessing officers at various levels should not ask the Deputy Chief Chemist/Chemical Examiner to give the tariff classification , citing para 70 (B) and (C) of manual of the Revenue Laboratorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hewing tobacco (without lime tube)' for May 2015 to December 2015. Ms. Bagchi argued that the Assessee's dual stand at different times depending on the rate of duty the product attracted was evident in Notification No. 25 of 2015, which fixed the duty per packing machine/per month. In reply, Mr. S.K. Bagaria, learned Senior Counsel appearing for the Appellant-Assessee has not only relied upon the communication dated 27.04.2015 (Annexure A-7) but also the CRCL Report dated 23.03.2015 which would indicate that the consistent stand of the Department itself was that the product manufactured by the Assessee is 'chewing tobacco' and as such the impugned order of the tribunal would not warrant interference. 118. The Assessee argued that the Revenue's assumption that adding certain flavours to 'zarda scented tobacco' is incorrect, as these additives only enhance the taste and assessment of the product as a 'chewing tobacco', and do not change the basic characteristics. It was also contended that 'chewing tobacco' and 'zarda/jarda scented tobacco' having not been defined under the statute, the principles of trade parlance must be resort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee-Respondent to show cause as to why the Form No. 1 dated 05.03.2015 should not be rejected as the product manufactured by the Respondent-Assessee fell in the category of 'chewing tobacco (other than filter Khaini)' and not Under Sub-heading 2403 9930 - 'zarda/jarda scented tobacco'. Accordingly, the Assessee started submitting Form No. 1 declaring the product manufactured by it as 'chewing tobacco'. This Court has consistently held the common parlance test continues to be one of the determinative tests for the classification of a product. In Commissioner of Central Excise v. Shri Baidyanath Ayurved chewing tobacco (2009) 12 SCC 419, this Court has held as under: 49. The primary object of the Excise Act is to raise revenue for which various products are differently classified in the new Tariff Act. Resort should, in the circumstances, be had to popular meaning and understanding attached to such products by those using the product and not to be had to the scientific and technical meaning of the terms and expressions used. The approach of the consumer or user towards the product, thus, assumes significance. What is important to be seen is how t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AX MEERUT II v. M/S SOM PAN PRODUCTS PVT. LTD. [DIARY No. 14581/19] 123. In the present group, the Revenue is in appeal challenging the correctness and legality of order dated 25.09.2018 passed by CESTAT, Allahabad, whereby the order passed by the authorities below treating the product manufactured by the Respondent as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930 and allowing the appeal as a consequence of the demands raised has been set aside. BRIEF FACTS 124. The Assessee after obtaining the registration under the CE Act declared the product manufactured by them as 'Jarda' falling under CET SH 2403 9930 and it was assessed to duty as 'Jarda scented tobacco'. On 30.04.2015, the Assessee filed a declaration effective from 01.05.2015, declaring the product as Jarda, and on the same day separate rates for 'Jarda scented tobacco' and 'chewing tobacco' were notified having a vast difference with respect to the duty leviable on 'chewing tobacco'. The Assistant Commissioner confirmed the duty on 'Jarda/Zarda scented tobacco' and thereafter the Assessee vide communication dated 12.05.2015 sought to corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely upon the registration form submitted to the department whereunder the list of ingredients used in the manufacture of the product had been specified and nowhere it is stated that scent was being used for the product and as such the department ought to have rebutted the ingredients furnished by the Assessee. It is submitted that the Assessee never declared the manufacture of ZST and even otherwise no testing of the product is carried out despite the request made by the Assessee. It is submitted that the particulars furnished by the Assessee classifying the product as 'zarda' under CET SH 2403 9930 would by itself not make the product as such and as has been contended by the revenue, it would be the product which was manufactured by the Assessee which would matter for determination of duty. Hence, the Assessee has prayed for dismissal of the appeal. DISCUSSION AND FINDINGS 127. We have heard Smt. Nisha Bagchi, appearing for the Appellant- Revenue, and Ms. Seema Jain appearing for the Respondent-Assessee. 128. A valiant attempt was made by Ms. Nisha Bagchi to contend that the tribunal erred in appreciating the fact that the onus of establishing the change in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, whereunder the product of the Assessee was classified by him as 'chewing tobacco'. The Assessee filled another form on 28.04.2015 describing the product as Jayanti zarda/jarda scented classifying the product under CET SH 2403 9910, culminating in another determination order dated 05.05.2015, wherein the Deputy Commissioner classified the product as 'chewing tobacco' under CET SH 2403 9910. 133. A search was conducted by the Director General of Central Excise in the factory of the Petitioner after drawing the panchnama and recording the statement of Shri. Tara Chand Jain, partner of the Assessee-firm. The samples were forwarded for chemical examination. The chemical examiner opined that the samples had a characteristic odour of odoriferous substances vide report dated 07.03.2016. Hence, a show cause notice dated 24.02.2017 came to be issued alleging that during the period March 2015 to February 2016, the Assessee manufactured the product using the process in which tobacco was ground and mixed with lime, menthol, synthetic flavouring perfumes, compound, etc. and was labelled as Jayanti Brand Zarda . Hence, alleging central excise duty amounting to Rs. 4.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee was approved. He would further contend that no appeals had been filed against the approval of the classification and said orders had become final. He would also add that ISI's specification and glossary are applicable to determine the classification in the absence of any definition of 'chewing tobacco' preparations for 'chewing tobacco' and 'zarda/jarda scented tobaccot' or any test prescribed by the CBIC. He would contend that the burden of classification or change of classification of a product is always on Revenue and the same has not been discharged. He would contend that there ought to be uniformity in classification. By relying upon the judgment of this Court in Damodar J. Malpani v. CCE reported in (2004) 12 SCC 70 in a case relating to 'chewing tobacco' itself, it was held that where the process adopted has been scrutinized and the Revenue in the case of one Assessee has classified the product as 'unmanufactured tobacco' falling under heading 24.01 as it stood then, another Assessee following the same process cannot be discriminated and there should be uniformity in classification. He would contend that verificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Flakes-n-flavourz, apart from assigning other reasons, in the facts and circumstances obtained in the present case, we have proceeded to examine the rival contentions, notwithstanding the findings recorded by the tribunal in Urmin Products and Flakes-n-flavourz which are the subject matter of Civil Appeal No. 10159-161 of 2010 and Civil Appeal No. 5146 of 2015, which has been adjudicated by us under this common order itself by assigning separate and independent reasons and the facts of the said case are distinguished from the facts of the present case. This view also gets fortified by the very fact that in the instant case, an inquiry was conducted in respect of Assessee's product and the superintendent in-charge of the Respondent's factory furnished the reports to the Deputy Commissioner on 04.03.2015 after visiting the factory of the Assessee, inspected the machines and the product manufactured, since the Assessee had declared in Form 1 to the effect that the product manufactured by it is 'zarda/jarda scented tobacco'. In the said report the superintendent has opined as under: As regards the Assessee's letter dated 02.03.2015 regarding amendment in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciples enunciated in Urmin's case is distinguishable. It may be noted that this Court in the case of CCE v. Damnet Chemicals Private Ltd. (2007) 7 SCC 490 had held: 26. In the circumstances, we find it difficult to hold that there has been conscious or deliberate withholding of information by the Assessee. There has been no wilful misstatement much less any deliberate and wilful suppression of facts. It is settled law that in order to invoke the proviso to Section 11-A(1) a mere misstatement could not be enough. The requirement in law is that such misstatement or suppression of facts must be wilful. We do not propose to burden this judgment with various authoritative pronouncements except to refer the judgment of this Court in Anand Nishikawa Co. Ltd. v. CCE [(2005) 7 SCC 749: (2005) 188 ELT 149] wherein this Court held: (SCC p. 759, para 27) 27. ... we find that 'suppression of facts' can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court and the appeal has to fail. 143. We place on record our deep appreciation for the able assistance rendered by the learned Counsel appearing for the parties, in not only making available compilation of statutory provisions, notifications, and circulars prevalent at the relevant time, but also their erudite elucidation of arguments which are noted hereinabove, which enabled this Court to arrive at the conclusions recorded hereinabove. Resultantly, we proceed to pass the following: ORDER (a) Civil Appeal Nos. 10159-10161 of 2010, Civil Appeal No. ........ of 2023 arising out of Diary No. 44912 of 2019 and Civil Appeal No....... of 2023 arising out of Dairy No. 6888 of 2020 are hereby allowed. (b) Civil Appeal No. 5146 of 2015, Civil Appeal No. 2469 of 2020 along with Civil Appeals arising out of Diary No. (s) 3492, 2810, 3484, 3513, 3536, 3544, 3545 and 3547 of 2020, Civil Appeal No. 3596 of 2023, Civil Appeal No. arising out of Diary No. 14581 of 2019 and Civil Appeal No. 959 of 2019 are hereby dismissed. (c) Civil Appeal No. of 2023 arising out of Diary No. 3487 of 2020 stands remitted to the Tribunal for adjudication afresh in light of observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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