Classification of unmanufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand names for consumption as chewing tobacco, which is commonly known in the market as Zarda - Regarding - Central Excise - 81/5/87-CX.3

Classification of unmanufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand names for consumption as chewing tobacco, which is commonly known in the market as Zarda - Regarding F. No. 81/5/87-CX.3 Dated 23-6-1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Classification of unmanufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand names for consumption as chewing tobacco, which is commonly known in the market as Zarda - Regarding. A doubt has been raised as to whether unmanufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand names for consumption as chewing tobacco, which is commonly known in the market as 'Zarda', should be classifiable as unmanufactured tobacco under Heading No. 24.01 or as manufactured chewing tobacco under sub-heading No. 2404.41 or 2404.49 depending on whether it is branded or unbranded. 2. The above issue came up for discussion in the North Zone Tariff-cum-General Conference of Collectors of Central Excise held at New Delhi on 27th and 28th May, 1987. In the course of discussion, the Conference noted that Tariff Advice No. 118/81, dated 4-11-1981 was issued by the Ministry in the context of the old Central Excise Tariff, clarifying that unmanufactured tobacco merely broken into pieces and packed in gunny bags, whether sold under a brand name or not, is not classifiable as manufactured chewing tobacco under old TI 4.11 (5). It was also observed that CEGAT had held in the case of CCE, Pune v. M/s. Jai Krishan Tobacco Co., Pune that raw tobacco crushed in the form of flakes and packed into smaller packets without adding any ingredients and whether sold under a brand name or not should not be classifiable as manufactured chewing tobacco. The said order has been accepted by the Government. 3. The Conference, after discussion, came around to the view that the only argument which could possibly be adduced in favour of classification of such products as 'Zarda' under the category of manufactured chewing tobacco would be that such products are found to have been marketed as 'Zarda', may not be enough to bring the product in the category of manufactured tobacco under Heading No. 24.8. The HSN description of unmanufactured tobacco under corresponding Heading No. 24.01 is stated to cover unmanufactured tobacco in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or stemmed or trimmed or untrimmed, broken or cut (including prices cut to shape) but not tobacco ready for smoking. 4. The Conference was, therefore, inclined to support the classification of the product in question under Heading No. 24.01 in the category of unmanufactured tobacco. It was, however, noted by the Conference that normally understood 'Zarda' preparation which come in the category of chewing tobacco as manufactured tobacco product would not be entitled to classification under Heading No. 24.01 since these are squarely covered by the description appearing in sub-heading No. 2404.41 or 2404.49. 5. The Board has accepted the above views of the conference. Accordingly, it is clarified that unmanufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand name for consumption as chewing tobacco, which may be commonly known in the market as 'zarda', would be appropriately classifiable under heading No. 24.01 of the Schedule to the Central Excise and Tariff Act, 1985 as 'unmanufactured tobacco'. 6. The above position may be brought to the notice of the lower field formations and the trade interest may also be suitably informed. 7. All pending assessments may be finalised on the basis of the guidelines given above.