TMI Blog2022 (2) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... of the chemical examiner subsequently in the year, 2019 behind the back of the appellant assessee, and have relied on the same in a mechanical manner without application of mind and without giving proper opportunity to the appellant. The appellant have manufactured branded chewing tobacco classifiable under heading 24039910 w.e.f. 01.06.2015. Further, the duty shall be payable accordingly with respect to number of packing machines operated from time to time, for which there is no dispute - appeal allowed - decided in favor of appellant. - Excise Appeal No. 70681 of 2019 - FINAL ORDER NO. 70062/2022 - Dated:- 2-2-2022 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Hari Om Tewari Sh. Amit Awasthi, Advocates for the appellant Shri Gyanendra Kumar Tripathi, Authorised Representative for the respondent ORDER The issue involved in this appeal is whether the appellant have manufactured and sold chewing tobacco classifiable under Central Excise Tariff Heading 24039910 or Jarda Scented Tobacco classifiable under 24039930 during the period 01.06.2015 to 31.03.2016. 2. Brief facts of the case are that the appellant ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security deposit of ₹ 8,68,250/- in the form of FDR. 6. Thereafter, the appellant vide letter dated 11.05.2015 informed the Assistant Commissioner, Central Excise Division-II that they wish to discontinue the manufacture of jarda scented tobacco w.e.f. 31.05.2015 and henceforth w.e.f. 01.06.2015 they would be manufacturing branded chewing tobacco falling under chapter sub-heading 24039910. Accordingly, the appellant also filed a fresh declaration in the prescribed form-I dated 26.05.2015 wherein they intimated that they shall be operating only two pouch packing machines w.e.f. 01.06.2015 for manufacture of branded chewing tobacco falling under CETH 24039910 and prayed for sealing of the other three machines, there being total five machines. It was also informed that MRP shall be continued to be ₹ 1/- per pouch. 7. As regards the sample collected by the Revenue on 01.04.2015 and sent for testing, report dated 04.06.2015 being test report No. 35/Cus/CRCL/2015/CEL/41/CE was received wherein it was reported as under:- Report The sample is in the form of brown coloured dried cut pieces of vegetable matter having pleasant odour. It is mainly composed of tob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was manufacturing jarda scented tobacco. As regards the second report dated 14.07.2014 of CRCL (sample drawn on 09.06.2015) the report nowhere mentions that the product has got a pleasant odour. The reports simply mentions that the product is in the form of dried coloured cut pieces of leaves and further states that it is mainly composed of tobacco and flavourants. It nowhere mentions the presence of any pleasant odour as in the earlier report. 13. Thus, there is a clear difference between the two reports and admittedly the product being manufactured w.e.f. 01.06.2015 is different as earlier the appellant was manufacturing jarda scented tobacco whereas w.e.f. 01.06.2015 they were manufacturing branded chewing tobacco. However, the Assistant Commissioner relying on some survey of units manufacturing jarda scented tobacco conducted by the departmental Officer(s), concluded that the product being manufactured by the appellant and the manufacturing process is similar to the product being manufactured by other similar units. He further referred to the two test reports and also relied upon a clarificatory opinion received from CRCL vide letter dated 04.02.2019/05.02.2019 in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble jarda is a chewing tobacco product made of highly scented and flavoured tobacco flakes. (Ref:IS 10335: 2016) 4. In view of the composition of the sample found in testing and the technical literature available on the subject matter, I am in the opinion that the sample under reference merits to be considered as jarda scented tobacco. 14. Relying on the said opinion of the CRCL, on the test report(s), the Assistant Commissioner vide OIO dt. 18.03.19 concluded that it is abundantly clear that both the test reports are telling about the same ingredients in both the products, thus it is established beyond doubt that the ingredients in jarda scented tobacco and branded chewing tobacco are the same, and the appellant is only trying to avail lesser rate of duty as modified vide Notification No. 4/2015-CE. Accordingly, he was pleased to classify the branded chewing tobacco being manufactured w.e.f. 01.06.2015 under CETH 24039930 and also upheld the capacity determination vide earlier order with respect to the order for three packing machine w.e.f dt. 01.04.2015 MRP ₹ 1/- for the remaining financial year 2015-16. Further, directed the Range Officer to finalise the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute of classification was in issue, there was difference of opinion between the Members of the Division Bench and thereafter by majority it was held to be a preparation of chewing tobacco distinct and different from jarda scented tobacco. It was also observed that there was admittedly difference between flavour and scent. Whereas, flavour has a distinct taste of intangible quality i.e. feel when the substance is eaten. On the other hand, scent or scented essentially means a pleasant smell or odour. While the flavour substance appeals to taste buds, the other refers to sense of smell. As such, it was held by majority that the product remains chewing tobacco even after addition of flavouring substance. The Tribunal also took notice that the assessee was marketing their product as flavoured chewing tobacco. 20. This Tribunal also observed by majority that chewing tobacco or jarda scented tobacco are not defined anywhere in the taxing statute and as such, in the absence of the same, the product has to be classified based upon the description of the product given by the manufacturer on the outer cover of the pouch/ packing, as also on the basis of common parlance test and establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment has come to the conclusion that the product is not chewing tobacco. Further, none of the concerned employee has stated that jarda scent was added. Accordingly, in such circumstances, this Tribunal placed reliance on the label of the product and the common parlance test, that the product has been sold as branded chewing tobacco and not as jarda scented tobacco. 23. Therefore, applying common parlance test the Division Bench in Som Products (supra) have allowed the appeal in favour of the assessee and set aside the demand of duty and penalty. Accordingly, learned Counsel for the appellant prays for allowing their appeal with consequential benefits. 24. Learned Authorised Representative appearing for the Revenue relies on the impugned order. 25. Having considered the rival contentions, we find that it is evident from the test report dated 14.07.2015, that there is no presence of any odiferous substance. Accordingly, we find that the product is branded chewing tobacco , there is no scope for Revenue for drawing any other conclusion. Our findings is also fortified by the Larger Bench ruling of this Tribunal in the case of Flakes-N-Flavourz (supra), wherein it has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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