TMI Blog2007 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... as "other than filter cigarettes" and discharging duty liability applicable to such cigarettes. Under the impugned order, it has been held that these cigarettes are also "filter cigarettes" and were required to discharge duty at higher rates as applicable to filter cigarettes. Consequent to the finding, a duty demand of over Rs. 2.3 crores along with interest has been made and a penalty of equal amount imposed under the order. The present appeal challenges the duty demand, imposition of penalty etc. made under the order. 3. The manufacturing process of 'tipped' cigarette as detailed in the show cause notice may be noted :- "An observation of manufacturing process of the said Tipper Brand Gold Tipped cigarettes reveals that the party m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be other than the materials satisfying the specifications of cigarette filter". 6. In adjudication, the contentions of the appellant were rejected and classification of the cigarette as filter cigarette ordered. The finding of the Com missioner may be read "13. Essential characteristics of a filter, from whatever has been submitted and put forth by the party are :- (i) It should check the suspended particles from entering the mouth. (ii) It should not let the tobacco particles enter the mouth. (iii) It should absorb smoke of tobacco resulting in absorption of nicotine to some extend. (iv) It should have higher filtration efficiency. (v) It should purify tobacco smoke. All above essential characteristics of a filter are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge amount of duty involved in the case was the main factor for not divulging the true facts to the department. Visibly, facts have thus been distorted and misrepresented by the party with a clear and mala fide motive to evade Central Excise duty and therefore for this deliberate action on the part of the party, a penalty under Section 11AC read with Rule 25 is rightly attracted and has correctly been imposed." 7. The contention of the learned Senior Counsel for the appellant is that the finding is without any evidence in its support and is also contrary to the entire materials available on record. It is being pointed out that there is no material, even remotely suggesting that tobacco itself can be used as a (tobacco) filter by making i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et would indicate that other materials also would be suitable as cigarette filter. Copy of the report in Business Wire dated 3rd October 2005 has been brought to our notice. This report states that Biotec, a company in the U.S; was developing starch based cigarette filters. It is also the learned SDR's contention that since the tariff mentioned no specific filtering material or any particular kind of filters, cigarettes with filters made of all materials would require to be classified as filter cigarettes. He would also point out that the Commissioner has correctly held that when smoke passes through the dense layer of tobacco at the smoker's end, it gets filtered. it is also the finding that loose flakes of tobacco are stopped from enterin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the contrary. We may read the report of the Chemical Examiner "C. No. 138 Chem/Misc/2005/M/CLM/Misc/2 dated 7-11-2005 Report : The sample is cigarettes with the description "Tipper Gold Tipped" in unit packing (containing 10 nos:) Total length of cigarette - 60 mm having light brown marking at 15 mm length. While portion (45 mm) is filled with processed tobacco and remaining 15 mm (brownish portion) is filled with exhausted tobacco treat with sugary material. However, as per ISO 10666-1983 cigarette filter shall be made from suitable non-toxic material which may be bonded with non-toxic binder. The filter rods may be made of mono dual or multiple materials with or without special/selective absorbing additives. Generally, filters are m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection. 15. In sum, the evidence on record is that the cigarette in question does not satisfy the common parlance test of its being filter cigarette. That is the valid test .acceptable tar excise classification Novopan India Limited v. Collector of Central Excise and Customs, Hyderabad as reported in 1994 (73) E.L.T. 769 (S.C.) etc. 16. In view of what is stated above, the classification of the cigarette as filter cigarette and duty demand on that basis are not sustainable. In the absence of duty demand, penalty and demand for interest also cannot arise. 17. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, to the appellant. (Dictated and pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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