TMI Blog2023 (6) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... cation as 'Unmanufactured tobacco'. The perfuming that the applicant claims is by mixing scent does not get covered under this. As seen in the Explanatory General notes to chapter 24, only natural fermentation is covered. Therefore, the product of the applicant does not fall under CTH 24012090.' 'Chewing tobacco' can be both 'unmanufactured' and 'Manufactured'. The question is whether the product of the applicant is 'unmanufactured' or 'manufactured'. The process undertaken by the applicant is not equivalent to that of winnowing crushing, and separating through seiving and the better part are used for chewing tobacco 'as 'unmanufactured tobacco for chewing' but is similar to the process undertaken in manufacture of 'Chewing tobacco' as acknowledge by the ICAR-CTRI in as much as the raw tobacco is processed by mixing of tobacco dust with scent(mixture of various perfumes and not jarda scent). 'Customs Tariff which gives the classification for determination of rates of goods as per notification No. 01/2017-C.T. (Rale) do not define what is 'Manufactured tobacco' and 'Unmanufactured tobacco' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST1N 09FOSPP6028C1ZI under trade name of M/s Pandey Traders having principal address at Siyapuram, Station Road, Mainpuri, Uttar Pradesh-205001 (hereinafter referred as the applicant ). The applicant is engaged in mixing of scent in the raw/unmanufactured tobacco dust, procured from various traders. 2. The applicant has submitted application for Advance Ruling dated 27.06.2022 enclosing dully filled Form ARA-01 (the application form for Advance Ruling) along with annexure and attachments. The applicant in his application has sought advance ruling on following question/clarification- 1. Whether mixing of scent (mixture of various perfumes and not jarda scent) in raw unmanufactured tobacco dust by the Applicant after procuring the same from various traders, and its subsequent sale to customers on B to B and B to C basis, after ensuring packing from third party, would change the character of unmanufactured tobacco to manufactured tobacco? 2. Whether processing of unmanufactured tobacco dust by add mixing the scent (mixture of various perfumes and not jarda scent) would change the character of unmanufactured tobacco to manufactured tobacco? 3. As per declaration given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for human consumption. Since application of scent (mixture of various perfumes and not jarda scent) on raw unmanufactured tobacco dust do not result in proven irreversible change, the raw unmanufactured tobacco dust remains raw unmanufactured tobacco dust only, as such the same cannot be equated with manufactured tobacco. The Applicant has placed reliance is the following case laws:- i) Yogesh Associates v/s Commissioner of Central Excise, Surat-II reported in 2006 (195) ELT 196 (Tri.-Mum.). ii) Shrikant Prasad v/s Commissioner of Central Excise, Calcutta-1 reported in 2000 (117) ELT 345 (Tribunal). iii) Suresh Enterprises v/s Commissioner of Central Excise, Pune reported in 2006 (203) ELT 432 (Tri. - Mumbai). iv) Iswar Grinding Mills v/s Commissioner of C.Ex., Calcutta-1 reported in 2000 (117) ELT 743 (Tri.). 6. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. But no reply was received. 7. The applicant was granted a personal hearing on 24.02.2023 which was attended by Mr. Amit Awasthi (Advocate), Mr. Ashish Kumar Shukla (Advocate) Authorized R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured tobacco dust by add mixing the scent (mixture of various perfumes and not jarda scent) would change the character of unmanufactured tobacco to manufactured tobacco? 12. The applicant is a proprietary concern is engaged in mixing of scent in the raw/unmanufactured tobacco dust, procured from various traders. That said unmanufactured raw tobacco dust after mixing of scent (mixture of various perfumes and not jarda scent) is being sent for packing along with packing rolls of pouch to M/s Purwar Enterprises, who with the help of pouch packing machine prepares, the Pouches of 1 gm and then ensures packing of 26 pouches of 1 gramps in a transparent packet, bearing no marking, whatsoever and howsoever, and return it to the Applicant. Even the Pouches being supplied for packing contains only statutory marking in terms of Prohibition of Advertisement Regulation of Trade and Commerce, production, Supply and Distribution Act, 2003 along with marking of Rate and weight in terms of Legal Metrology Act. The said pouches also do not bear any brand and /or trade name. That the said product is then supplied on B to B and B to C basis from the premises of the Applicant, classifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Sun cured Virginia tobacco 2401 10 40 --- Burley tobacco 2401 10 50 --- Tobacco for manufacture of biris, not stemmed 2401 10 60 --- Tobacco for manufacture of chewing tobacco 2401 10 70 --- Tobacco for manufacture of cigar and cheroot 2401 10 80 --- Tobacco for manufacture of hookah tobacco 2401 10 90 --- Other 2401 20 - Tobacco, partly or wholly stemmed or stripped : 2401 20 90 --- unmanufactured tobacco; tobacco refuse - tobacco, partly or wholly stemmed or stripped : other Explanatory Notes to HSN 2401 is given as under: From the above, it is evident that CTH 2401 covers unmanufactured tobacco. CTH 240110 covers Tobacco, not stemmed or stripped' and CTH 240120 covers Tobacco, partly or wholly stemmed or stripped'. As per party submission the raw unmanufactured tobacco dust which is result of scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2403 91 00 -- Homogenised or reconstituted tobacco 2403 99 -- Other : 2403 99 10 --- Chewing tobacco 2403 99 20 --- Preparations containing chewing tobacco 2403 99 30 --- Jarda scented tobacco 2403 99 40 --- Snuff 2403 99 50 --- Preparations containing snuff 2403 99 60 --- Tobacco extracts and essence 2403 99 70 --- Cut-tobacco 2403 99 90 - Other The applicant process involves two activities (i) Preparation of dust of tobacco and (ii) mixing of scent (mixture of various perfumes and not jarda scent) by the Applicant in raw unmanufactured tobacco dust. On a fine reading of the above, it is evident that the cutting process prescribed in this note is along with the remarks 'but not tobacco ready for smoking'. This explanation of HSN clearly brings out the classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conference of Collectors of Central Excise wherein. Tariff advice No. 118/81 dated 04-11-1981, 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) and the acceptance of the Order of CEGAT in the case of CCE, Pune Vs. M/s Jai Kisan Tobacco Co., Pune wherein CEGAT has held that raw tobacco crushed in the form of Hakes when packed into smaller packets without adding any ingredients and sold (under a brand name or not) should not be classifiable as manufactured chewing tobacco. In the case of applicant scent(mixture of various perfumes and not jarda scent) is used as additional ingredient in the process of mixing of tobacco dust with scent. 14. We find that 'Chewing tobacco' can be both 'unmanufactured' and 'Manufactured'. The question is whether the product of the applicant is 'unmanufactured' or 'manufactured'. The process undertaken by the applicant is not equivalent to that of winnowing crushing, and separating through seiving and the better part are used for chewing tobacco 'as & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing process, but only a process to cure the leaf and keep it in fit condition for sale. The mam process to which the tobacco is subjected at that stage is that if is soaked in jaggery water, dried in diade and subjected periodical to the process of bulking we have mentioned above. 15.2. We see no reason to differ from the Tribunal, that the process of hulking and desanding to which the tobacco was subjected before the assessee purchased it did not amount to manufacturing process. What the assessee purchased was certainly not raw tobacco in the sense that it was straight of the field. It was cured tobacco. But then clause (viii) of Section Stakes within its scope both cured and uncured, which constitutes raw material for the manufacture of the products to which section 5(vii) applies. What however is excluded from Section 5(viii) is tobacco which has itself been subjected to a manufacturing process. Whether, if tobacco which has been subjected to a manufacturing process is again subjected to a further manufacturing process by the purchaser it will fall under Section 5(vii) does not arise for consideration in this case, and we express no opinion of ours on that question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the Tribunal, and the material on record justified its other finding that the tobacco the assessee purchased had not been subjected to any manufacturing process prior to that purchase. 16. The Apex Court in the State of Madras Vs. Bell Mark tobacco Co [Laws(SC)-1966-10-4] decided on 04th October 1966 has completely agreed with the above view of the High Court that the cumulative effect of the various process to which tobacco was subjected before it was sold, amounted to a manufacturing process. 17. Further, in the case of A.V. Pachiappa Chettiar And. Vs. The State of Madras relied on by the appellant in para 11 of the decision, it is staled as follows: 11.............While the raw product may be capable of a particular use, manufacture as understood in these decision, involves the connotation of some change in the article in question, though basically the material might remain the same, it is being adopted to a particular use which in the original form it was not capable of; that we conceive to be the essence of manufacture.... and has held that in the factual position of that case, the resultant product is 'Unmanufactured Tobacco , Again we see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other Manufactured tobacco and manufactured tobacco substitutes.... 19.. The applicant has placed reliance on the different case laws- i) Yogesh Associates v/s Commissioner of Central Excise, Surat-II reported in 2006 (195) ELT 196 (Tri.-Mum.). ii) Shrikant Prasad v/s Commissioner of Central Excise, Calcutta-1 reported in 2000 (117) ELT 345 (Tribunal). iii) Suresh Enterprises v/s Commissioner of Central Excise, Pune reported in 2006 (203) ELT 432 (Tri. - Mumbai). iv) Iswar Grinding Mills v/s Commissioner of C.Ex., Calcutta-1 reported in 2000 (117) ELT 743 (Tri.). The above case laws deals with difference of classification of same goods of two different dealers differently. In other case it was related to treatment of tobacco leaves. In the above laws it has been discussed that crushing / powdering of tobacco leaves doesn't amount to manufacture. Hence facts of the above case laws are different from applicant case. In the applicant case mixing of tobacco dust with scent(mixture of various perfumes and not jarda scent) is a cumulative process of manufacturing and resulted in different and irreversible goods i.e. manufactured chewing tobacco an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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