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TMI Blog2015 (2) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ettes which is entirely machine driven, certain amount of wastages in the form of dust, sand waste and floor sweepings arise. These are collectively known as Tobacco refuse. At present Tobacco Refuse which would arise is classifiable under Tariff Item 2401 3000 of the schedule to the Central Excise Tariff Act 1985. According to the estimate of the assessee, about 95-96% of the Cut Tobacco gets used up in the manufacture of cigarettes and 4 to 5% as Tobacco refuse. It is their submission that tobacco refuse is nothing but wastage emerging during the course of manufacture of Cigarettes and is not obtained by any process of manufacture but in the course of manufacturing process to produce their final produce namely Cigarettes. 3. The tobacco refuse which is generated during the manufacture of cut tobacco from tobacco leaf and during the manufacture of cigarettes from cut tobacco as mentioned earlier is an item classifiable under schedule to the Central Excise Tariff Act 1985 under CETH 2401 3000. The tobacco refuse is exempted from payment of duty under Notification No. 3/2005 CE dated 24.02.2005 as amended and the appellant has been clearing tobacco refuse at nil rate of duty. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; nothing contained in the said Notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise, leviable thereon or are chargeable to nil rate of duty. 5. Further from the Cut Tobacco captively consumed in the manufacturing process, M/s. VST manufactures Cigarettes (Chapter Sub-Heading Nos. 24022010, 2422020, 24022030, 24022040 and 24022050) and Tobacco Refuse, which arises during the course of manufacture of Cigarettes and are capable of being sold for a consideration. As mentioned above, Tobacco Refuse is a marketable and excisable goods. Out of the two final products viz., Cigarettes and Tobacco Refuse (which arises during the course of manufacture) manufactured by M/s. VST from the captively consumed Cut Tobacco, Cigarettes are dutiable and the Tobacco Refuse is chargeable to Nil rate of duty upto 27.02.2005 and exempt from the whole of the duty of excise leviable thereon with effect from 28.02.2005. Thus, it is clear that the Notification No. 52/2002-CE dated 17.10.2005, as amended, is not applicable to that quantity of Cut Tobacco, which has gone into the manufacture/production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision only on the ground that in that case Tribunal was considering the application of provisions of Rule 6 of CENVAT Credit Rules whereas in the present case the dispute relates to availability of benefit of Notification No. 52/2002. He also submits that Notification No, 52/2002 provides for exemption to Cut Tobacco used in the manufacture of final products which are not exempted. Therefore what is required to be examined is whether tobacco refuse is a final product for the appellant or not. For this purpose he relies upon the decision in the case of Magnum Ventures Vs. CCE, Ghaziabad [2014 (303) E.L.T. 226 (Tri.-Del.)] wherein it was held that sludge and pulper waste cannot be considered as manufactured product at all. He also relies upon the decision in the case of CCE, Chandigargh Vs. Markfed Vanaspati & Allied Industries and others reported in [2003 (153) E.L.T. 491 (S.C.)] to submit that spent earth which has a residue cannot be considered as a product manufactured. He also relies upon the decision in the case of Commissioner Vs. Shakumbari Sugar & Allied Industries Ltd. [2005 (189) ELT A62 (SC)] to submit that bagasse which has obtained during the course of manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 2001 (14 of 2001) (hereinafter referred to as the said Finance Act) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue), No. 121/94-Central Excise, dated 11th August, 1994, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said Tariff Act) manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products all goods falling under Chapter 24 of the first Schedule to the said Tariff Act, from the whole of the duty of excise and additional duty of excise and national calamity contingent duty leviable thereon, which is specified in the respective Schedules to the said Tariff Act and the said Special Importance Act and the said Finance Act : Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring is whether tobacco refuse cleared by the assessee is a final product of the assessee. In this case as rightly submitted by the learned counsel, the assessee is engaged in the manufacture of Cigarette. During the course of manufacture of Cigarette, and for the process of manufacture of Cigarette, they have to manufacture Cut Tobacco also. Therefore it can be clearly said that the appellant is a manufacturer of Cut Tobacco and Cigarette. Can anyone say that appellant is a manufacturer of tobacco refuse is the moot question to which the obvious answer in the light of the decision of the Tribunal in the case of Golden Tobacco Ltd. is tobacco refuse is not a final product . The Tribunal also while rendering the decision in the case of Golden Tobacco Ltd. had relied upon the decision of the Hon ble High Court of Bombay in the case of Rallis India Ltd. Vs. Union of India [2009 (233) E.L.T. 301 (Bom.)] where a similar view was taken. Thereafter several decisions have been rendered following the same view and the issue is no longer res integra. 10. When this observation was made, the learned AR had sought time and no contrary decision has been placed before us at thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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