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2013 (8) TMI 607 - AT - Central ExciseCompounded levy - Production capacity based duty - Chewing tobacco and Filter Khaini - Notified Goods as per Notification No. 10/2010 - The assesse was engaged in the manufacture of Chewing tobacco and Filter Khaini falling under tariff item No.24039910 of the First Schedule of the Central Excise Tariff Act, 1985 - Whether the Filter Khaini Pouches manufactured by the Respondents with the help of packing machines were required to be considered as notified goods in terms of notification No.10/2010-CE(NT) and whether the same were required to be taken into consideration while determining the annual capacity of production and collection of duty. Held that:- The packing machine used for packing of filter khaini pouches/pillows/sachets cannot be considered to be notified item and the goods manufactured with the aid of packing machine would not be covered under the compounded levy Rules - They were required to discharge duty not in terms under the said Rule, but in terms of the normal provisions of law - in the pillow packing machine for the manufacture of the said sachets would not be taken into consideration for determining the annual capacity of production and collection of duty - Section 3 A covers only pouches packed with the aid of packing machine and not the pouches that were packed manually - Inasmuch as the plastic pouches were pre-sealed and zipped from one side and the sachets were put in manually and the pouch was sealed with the help of hot iron/band sealer. The filter khaini, pillows/sachets packed with the aid of packing machine do not bear any brand name, MRP, warnings as to health hazards and manufacturer's particulars, as required under the capacity Rules, it cannot be held that the same were notified goods in terms of the compounded levy rules - The same were more or less like the Tea bags, which were without any brand, name or carrying any other requisite information and which were ultimately packed in the final containers carrying various requisite information. It was only the final container, which can be held to be as the final product -The Tea bags cannot be held to be the product which was marketable in that condition inasmuch as not even the manufacturer's name was described - even if the Tea packs were manufactured with the aid of power, they cannot be considered to be notified goods in terms of the Capacity Determination Rule. The packing machine used for packing of filter khaini pouches/pillows/sachets can not be considered to be notified item and the goods manufactured with the aid of packing machine would not be covered under the compounded levy Rules. They are required to discharge duty not in terms under the said Rule, but in terms of the normal provisions of law. – Decided against Revenue.
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