2013 (9) TMI 1041 - HC - Central Excise

Summary

Issues involved: Interpretation of Section 11A of the Central Excise Act, 1944 and classification of manufactured tobacco under different sub-headings of the Central Excise Tariff Act, 1985.

Interpretation of Section 11A:
The appellant argued that Section 11A was rightly invoked due to mis-statement, suppression of facts, or fraud by the respondent assessee. However, the tribunal found that the respondent was repacking raw tobacco into small pouches and selling branded unmanufactured tobacco, concluding that there was no fraud or suppression of facts to evade duty payment. As a result, the tribunal held that Section 11A could not be applied in this case.

Classification of Tobacco:
Initially, the respondent paid duty at a higher rate for manufactured branded tobacco. Subsequently, the respondent informed the authorities about manufacturing branded unmanufactured tobacco under a different sub-heading with a lower duty rate. The first appellate authority determined that the Revenue's demand, interest, and penalty were time-barred, and Section 11A could not be invoked. The tribunal upheld this decision, emphasizing that the rate of duty dispute could not be raised in the High Court and that the specific contention regarding Section 11A lacked merit.

Conclusion:
The High Court found that the appeal lacked merit and could not be entertained, as the tribunal's factual findings did not support the application of Section 11A. The court rejected the appellant's argument based on Section 11A and upheld the tribunal's decision regarding the classification and duty rate dispute.