1989 (12) TMI 197 - AT - Central Excise

Summary

Issues involved: Classification of tobacco dust and stalks, liability to pay duty under the relevant tariff.

Summary:
The appellants were involved in dealing with unmanufactured tobacco forms, including tobacco dust and stalks, which were considered under the old tariff. The appellants argued that unmanufactured tobacco carried nil duty and they were not liable for duty payment. The Department contended that tobacco dust was a marketable item attracting duty under a specific tariff entry.

The Bench noted discrepancies in the documents submitted by the appellants and observed that the documents could not be considered as evidence. The Department argued that grinding tobacco constituted a manufacturing process, attracting duty under the relevant tariff entry.

The appellants highlighted that the change in physical form did not alter the essential nature of the product, maintaining that they were dealing with unmanufactured tobacco. The Department cited cases to support the view that grinding constituted manufacturing.

After considering both sides' arguments, the Bench acknowledged that changes in physical processes could result in different product classifications under the tariff. The amended Section 2(f) of the Central Excise & Salt Act and the relevant tariff entries were analyzed to determine the liability for duty.

The Bench concluded that the appellants were dealing with unmanufactured tobacco forms that carried nil duty. The Department failed to prove that the products attracted duty under a specific tariff entry. Therefore, the appeals were accepted in favor of the appellants.