9911796707
TMI Blog2023 (10) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of DIARY No. 3547 of 2020), Civil Appeal No. 5146 of 2015 and Civil Appeal No. 3596 of 2023 S. Ravindra Bhat and Aravind Kumar, JJ. For the Appellant : Mr. B. Krishna Prasad, AOR Mr. S.K. Bagaria, Sr. Adv. Mr. Ramesh Singh, Sr. Adv. Ms. Sheena Taqui, Adv. Ms. Akansha Saini, Adv. Mr. Ajit K Sinha, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR Mr. N. Venkatraman, A.S.G. Mr. Mukesh Kumar Maroria, AOR Ms. Nisha Bagchi, Adv. Mr. H.R. Rao, Adv. Mr. S.K. Singhania, Adv. Ms. Aakansha Kaul, Adv. Mr. Shetty Uday Kumar Sagar, Adv. For the Respondent : Mr. Kishan Datta, AOR Mr. A R Madhav Rao, Adv. Mr. A Mukunda Rao, Adv. Mr. Siddhant Buxy, AOR Mr. Ajay K. Jain, Adv. Ms. Seema Jain, Adv. Mr. Dushant Mahant, Adv. Mr. Vimlesh Kumar, Adv. Mr. Dileep Pillai, Adv. Mr. Atul Shankar Vinod, Adv. Mr. M. P. Vinod, AOR Mr. Vivek Kohli, Sr. Adv. Mr. S K Bagaria, Sr. Adv. Mr. Sunil Tyagi, Adv. Mr. Ashwani Sharma, Adv. Mr. Nalin Talwar, Adv. Mr. Sandeep Buraria, Adv. Mr. Archit Upadhayay, AOR Ms. Bhavya Bhatia, Adv. Mr. Kumar Ajit Singh, Adv. Mr. Rupesh Kumar, AOR Mr. R. Krishnan, Adv. Ms. Pankhuri Shrivastava, Adv. Ms. Neelam Sharma, Adv. Mr. Rajeev Sharma, Adv. Mr. Aryaman Sharma, Adv. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Parties 133 137 iii. Discuss and Findings 137 142 ORDER Page 143-144 3. On behalf of the Revenue in the various groups of matters before this Court, we have heard: (1) Mr. N. Venkataraman, learned Additional Solicitor General of India, (2) Ms. Nisha Bagchi, learned standing counsel. 4. On behalf of the Assessee, we have heard: (1) Mr. S.K. Bagaria and Mr. Vivek Kohli, learned Senior Counsel, (2) Mr. A.R. Madhav Rao, Mr. Rupesh Kumar and Ms. Seema Jain, learned Counsel. 5. The Appellants in Group No. (s) 1,2,3,5,6 and 7, and the Respondents in Group No. 4, namely the 'Commissioner of Central Excise' are hereinafter referred to as "Revenue". The Appellants in Group No. 4 and the respective Respondents in Group No. (s) 1,2,3,5,6 and 7, are hereinafter referred to as "Assessee" for the sake of convenience and brevity. 6. For ease of reference, the following table No. 2 of nomenclatures/abbreviations is made available below. TABLE 2 Sr. No. Nomenclature/ Abbreviation Particulars / Meaning 1. "BIS" Bureau of Indian Standards 2. "CBIC" Central Board of Indirect Taxes and Customs 3. "CETA" Central Excise Tariff Act, 1985 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capacity deemed to have been produced for chewing tobacco (including Filter Khaini), Unmanufactured Tobacco and Jarda Scented Tobacco. 7. Notification: 19/2010- C.E. dated 13.04.2010 - prescribing the rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 8. Notification: 14/2012 - CE Dated 14.03.2012 prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 9. Notification: 2/2014 - C.E. dated 24.01.2014 - prescribing the new rate for Chewing Tobacco, Unmanufactured Tobacco and Filter Khaini. 10. Notification: 17/2014 - C.E. dated 11.07.2014 - Prescribing the new rate for chewing tobacco, unmanufactured tobacco and filter khaini. 8. It would be apt and appropriate to extract Section 11A as it stood in 1980, and as it stood after the amendment brought in 2000 and by Act 10 of 2000 (w.e.f. 17.11.1980) and subsequent substitution by Act 8 of 2011, as it would have a direct bearing on the various batch of appeals before us. They read as under: 1980 2000 2011 Section 11A. Recovery of duties not levied or not paid or short levied or short-paid or erroneously refunded. (1) When any duty of excise has not been levied or pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be. [(1A) When any duty of excise has not been levied or paid or has been shortlevied or short paid or erroneously refunded, by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to subsection (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice. Subs. By Act 8 of 2011 Section 11.A Recovery of duties not levied or not paid or short-levied or short paid or erroneously refunded-(1)Where any duty of excise has not been levied or paid or has been short levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; reflecting under the relevant Entry 2404.21, within its ambit of 'notified goods' for the purposes of availing benefits Under Section 4A. However, subsequently by Notification No. 10/2003 - CE (NT) dated 01.03.2003 was issued introducing Entry 24A in Notification 13/2002 dated 1.03.2002, thereby covering all goods under entry 2404.41 within the ambit of 'notified goods' for the purposes of Section 4A of the CE Act. 14. Prior to the introduction of the 8-digit tariff classification, 'chewing tobacco' was reflected under Chapter 24, under specific entry '2404.41' of the six-digit Central Excise Tariff classification. Subsequently the new 8-digit Central Excise Tariff classification was introduced vide Circular 808/05/2005 -CX dated 25.02.2005, Chapter 24 of the Central Excise Tarriff came to be amended and heading '2403' was introduced which reads: "2403 - Other manufactured tobacco and manufactured tobacco substitutes; 'Homogenised' or 'Reconstituted' tobacco; Tobacco extracts and essences". The Central Excise Tariff Heading '2403' included the following sub- headings: "2403 9910 chewing tobacco 2403 9920 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited with a show cause notice dated 09.07.2007 stating thereunder that the Assessee had been manufacturing and clearing the product manufactured by it as 'zarda/jarda scented tobacco' under the guise of 'chewing tobacco.' During the visit to the Assessee's factory by the Department's officers, they noticed the process of manufacturing 'zarda/jarda scented tobacco.' The statement of the production manager and also the statement of the factory in charge came to be recorded, based on which the Department concluded that there was a deliberate intention to evade payment of duty by misclassification and wilful misstatement of their product to enable them to pay lesser duty. Accordingly, by invoking the extended period of limitation as provided under proviso to Section 11A(1) CE Act, the Department called upon the Assessee to show cause as to why the product which had been classified as 'chewing tobacco' should not be classified as 'zarda/jarda scented tobacco' and why the said product should not be accordingly assessed to duty as per Section 4 of the CE Act, for the period 01.03.2006 to 10.07.2006. Further, the Assessee was required to sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product is Chewing Tobacco or Zarda Scented Tobacco clearly. Both sides have some points in their favour and some against them. Under these circumstances, in view of the fact that the label calls the product as Flavoured Chewing Tobacco, no Zarda Scent has been used and the product has not been sold as Zarda Scented Tobacco by the Appellant, we consider that the claim of the Appellant that the product is Flavoured Chewing Tobacco has to be accepted. Thus, on merit, the Appellants succeed. Therefore, the demand for differential duty fails and naturally the penalties imposed Under Section 11AC of Central Excise Act or Rules of Central Excise Rules, 2002 also have to be set aside." 21. The issue of limitation was also held in favour of the Assessee by opining as under: "22. In any case, we consider that the limitation would apply in this case and show cause notice should not have been issued beyond one year in view of the fact that the Appellant intimated their intention to change. Further, the Appellant had also intimated that the proposed change was not in line with industrial factory. Therefore, extended period also could not have been applied in this case." 22. Hence these ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee by invoking the proviso Under Section 11A (1), along with interest, at the appropriate rate Under Section 11AB of the Act 1944. 25. The learned Senior Counsel for the Revenue would further elaborate his submissions by contending that the Assessee has not shown any proof of record for concluding that 'zarda/jarda scented tobacco' is also 'chewing tobacco'. By contending that this tariff classification was in force during the period of the board's letter dated 23.06.1987, notice dated 15.07.1987, and the notification dated 16.03.1995 and as such they would not come to the rescue of the Assessee. It is also urged that the tariff has been aligned to 8 digits and more specifically calculation has been provided where 'chewing tobacco' and 'zarda/jarda scented tobacco' have been separately classified and as such the contention of the Assessee has no legs to stand. 26. The Revenue would further contend that the Assessee is selling its product as "zafrani zarda" and as such it cannot claim 'zarda/jarda' used in the tariff heading is different from 'zarda/jarda' used by Assessee and further, the Assessee has not been able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al time but had only forwarded a cryptic communication, lacking details and bereft of material particulars, namely the intention of changing the heading and classification of the product which was being manufactured by them and no evidence for reasons of change was forthcoming from the said communication, and as such the Assessee cannot take umbrage under the said communication to stave-off its liability or, to contend that extended period of limitation cannot be applied as the department knew about such change. 29. The learned Counsel appearing for the Respondent - asseessee by supporting impugned order passed by the tribunal would contend that intention of the Revenue/Government was to levy duty on the product manufactured by the Appellant-Assessee Under Section 4A of CE Act only. He would submit that the product manufactured by the Assessee was classified under CET SH No. 2404.41 as 'chewing tobacco' and duty was assessed Under Section 4A of CE Act on MRP basis and accordingly duty was paid. He would contend that with introduction of the 8 (eight) digit tariff era, Assessee classified its product as 'zarda/jarda scented tobacco' under CET SH 2403 9930 for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than just change in tariff entry. Even otherwise, if classification is possible under two entries, the one more beneficial to the Assessee would be adopted. Hence, relying upon the following judgments he prays for dismissal of the appeal filed by the Revenue: 1. HPL Chemical Ltd. v. CCE 2006 197 ELT Chandigarh 324 (SC) 2. Mauri Yeast India Pvt. Ltd. v. State of U.P. (2008) 5 SCC 680 3. C.G. & S.T. CCE and ST Rohtak v. Som Flavours Masala Pvt. Ltd. - Civil Appeal No. 1251 of 2023 disposed of on 17.02.2023. 4. Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhawan Ltd. (2009) 12 SCC 419. ISSUES/QUESTIONS FOR CONSIDERATION 33. Questions that arise for our consideration in this group are as under: Q.1 Whether the authorities below were correct and justified in invoking the proviso to Section 11A of the CE Act? Q.2 Whether the product manufactured and cleared by the Assessee for the period 01.03.2006 to 10.07.2006 was required to be classified under the CET SH 2403 9910 as 'chewing tobacco' or to be classified under CET SH 2403 9930 as 'zarda/jarda scented tobacco'? DISCUSSION AND FINDINGS BACKGROUND 34. The Assessee herein was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11A of the CE Act: 36. In the instant case i.e., Civil Appeal Nos. 10159-10161 of 2010 - CCE Ahmedabad v. M/s. Urmin Products Pvt. Ltd. the show cause notice came to be issued on 09.07.2007 and the OIO came to be passed on 28.01.2008 which resulted in the impugned order dated 25.03.2010. 37. The tribunal by the impugned order has held to the following effect: "22. In any case, we consider that the limitation would apply in this case and show cause notice should not have been issued beyond one year in view of the fact that the Appellant intimated their intention to change. Further, the Appellant had also intimated that the proposed change was not in line with the industrial factory. Therefore, the extended period also could not have been applied in this case." 38. It would be apt to note at this juncture itself that the judgment of this Court in CCE v. Cotspun (1999) 7 SCC 633, whereunder, it came to be held that levy of excise duty based on an approved classification list is not a short levy and differential duty cannot be recovered on the ground that it is a short levy. It was further held that levy of excise duty based on an approved classification list is the correct le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zarda/jarda scented tobacco') but covered the goods falling under CET SH 2403 9910 ('chewing tobacco'). Since the 'zarda/jarda scented tobacco' was not specified under MRP-based assessment Under Section 4A of CE Act, the goods had to be assessed Under Section 4 of the CE Act. The abatement provided to the goods classified under CET SH 2403 9910 was 50 percent. Hence, if the goods are cleared as 'chewing tobacco' the duty has to be paid on lower value resulting in payment of a lesser amount of duty, as the value determined Under Section 4A after 50 percent abatement was much lesser compared to transactional value Under Section 4 of CE Act. It is for this precise reason the Assessee changed the classification from 'zarda/jarda scented tobacco' to 'chewing tobacco'. 'Zarda/jarda scented tobacco' was brought into the ambit of Section 4A of the CE Act (MRP-based assessment), by virtue of amendment to Notification No. 2 of 2006 vide Notification No. 16 of 2006 dated 11.07.2006. In other words, 'zarda/jarda scented tobacco' was not specified for assessment Under Section 4A of CE Act for the period 01.03.2006 to 10.07.2006. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty. It has been further held: "12. The expression "suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the revenue invokes the extended period of limitation Under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 14. As far as fraud and collusion are concerned, it is evident that the intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word 'wilful', preceding the words " misstatement or suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent which was lower than the value as prescribed Under Section 4 of the CE Act. 43. Yet another factor which cannot go unnoticed is the statement of the production manager and factory in-charge and manager recorded at the time of the inspection of the units/factory of the Assessee, whereunder they have clearly admitted in their statement dated 21.06.2007 recorded Under Section 14 of the CE Act, wherein they confirmed that in the E.R. 1 returns filed for the month of April 2006 onwards, they have revised the classification of their final product from CET SH 2403 9930 to CET SH 2403 9910 and started describing their product as 'chewing tobacco' instead of 'zarda/jarda scented tobacco' and by virtue of such declaration they continued to pay duty as per MRP-based assessment under the relevant Notification No. 2 of 2006 dated 01.03.2006 though 'zarda/jarda scented tobacco' was not covered under MRP-based assessment during the period 01.03.2006 to 10.07.2006 till the tariff entry i.e., CET SH 2403 9930 being brought within the ambit of Section 4A of CE Act by issuance of Notification 16 of 2006 dated 11.07.2006. It is for this precise reason that the act of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of such type, a general inference will be drawn that a new product has been introduced in place of earlier one. The Assessee, with intent to evade the Central Excise duty, deliberately resorted to mis-statement and willfully suppressed the vital facts. The Assessee had changed and misclassified the product from 'Jarda scented tobacco' to 'Chewing tobacco' with an intention to evade payment of duty payable Under Section 4 of the Central Excise Act, 1944, despite knowing the fact that their product was not covered under the relevant Notification which provides for valuation Under Section 4A. The Assessee did so to enable them to pay duty on lower value [as the value as per Section 4A of Central Excise Act, 1944 (MRP based assessment) was lower than the value as per Section 4 of Central Excise Act, 1944. Thus, there was a deliberate intention to evade payment of duty by the Assessee, by misclassification and willful mis-statement of their product and due to this act, the department is entitled to invoke the extended period as provided in the proviso to Section 11A (1) of the Central Excise Act, 1944 to recover the differential duty along with interest Under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the goods covered under 'chewing tobacco' head as 2404.41. When Notification No. 2 of 2006 dated 01.03.2006 came to be issued and it reflected under Serial No. 28 that all goods classified under entry SH 2403 9910 to 2403 9920 were covered for MRP assessment and the product 'zarda/jarda scented tobacco' was not included under said entry, it necessarily meant that 'zarda scented tobacco' could not be determined under MRP assessment scheme. 45. The signatory to the ER - 1 returns filed by the Assessee for the relevant period was Smt. Sheetal K Majithia, Director - Finance and she was the one who took the decision to change the classification of the product. Hence, she was issued with the summons for appearing and explaining the same. However, she chose to ignore the summons and has not appeared before the adjudicating authority. Whereas, the factory in-charge and manager, Shri Dipak S Shah, has appeared and has furnished the statement, whereunder he admits that he reports to Smt. Sheetal K Majithia, Director - Finance. He further admits in his statement dated 26.06.2007 and 09.07.2007, that their/Assessee's product is classifiable as 'jarda/zarda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2006 dated 01.03.2006 was issued in supersession of Notification 13 of 2002 dated 01.03.2002 specifying the goods covered Under Section 4A of the CE Act, for MRP based assessment. The said notification did not specify the goods falling under CET SH 2403 9930, i.e., 'zarda/jarda scented tobacco', but it covers the goods falling under CET SH 2403 9910 i.e., 'chewing tobacco'. Thus zarda/jarda scented tobacco not having been specified under MRP- based assessment Under Section 4A of the CE Act, the goods had to be necessarily assessed Under Section 4 of the CE Act. The Assessee being aware that there being no change in the nature of the products, its ingredients and also the manufacturing process had changed and misclassified the product as 'chewing tobacco' from 'zarda/jarda scented' tobacco. Had the Assessee continued its classification as 'zarda/jarda scented tobacco', the duty payable as per transaction value Under Section 4 of the CE Act would have been much more than the determination Under Section 4A of CE Act after 50 % abatement. It is for this precise reason for avoiding and evading payment of the higher duty, the classification was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty by Rs. 4,28,65,508/- and accordingly, a show cause notice came to be issued Under Section 11A of the CE Act. The Commissioner of Central Excise, in his OIO dated 02.04.2008 confirmed the demand of duty, interest, penalty and held that the product manufactured by the Respondent- Assessee falls under CET SH 2403 9930 as 'Zarda/Jarda scented tobacco' by concluding that assessment has to be made Under Section 4 of the CE Act. An appeal was preferred against the said order before the CESTAT which came to be allowed and the OIO dated 02.04.2008 was set aside. SUBMISSIONS OF THE PARTIES 52. We have heard the learned advocates appearing for the parties. 53. Ms. Nisha Bagchi learned Counsel appearing for the Department has supported the OIO dated 02.04.2008 while contending that the tribunal committed an error in setting aside the said findings and in holding that the product in question was classifiable as 'chewing tobacco' under CET SH 2403 9910 and rejecting the stand of the department that same should be classified as 'zarda/jarda scented tobacco' under CET SH 2403 9930. She would contend that the tribunal erred in relying upon its findings recorded in M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct under tariff entry number 2403 9910 and discharged its tax liability Under Section 4A of CE Act, which was accepted with full knowledge by the Revenue and raising objection during audit of the unit for the period 1.03.2006 to 11.07.2006 is possibility of higher Revenue during this period is due to (a) technical oversight by the Revenue itself which was later corrected and, (b) the alternate assessment on transaction value rather than MRP based assessment. He would contend that when classification of the product is accepted earlier and for the subsequent period, same cannot be classified differently. There being no definition of the competing products, the application of the common parlance test is to be adopted and when so adopted the only conclusion that has to be drawn is that product is to be construed as 'chewing tobacco', as declared in invoices and understood by distribution chain of dealers, stockists, retailers and consumers. He would submit that burden of proof lies on the Revenue as classification is a question relating to chargeability and the same having not been discharged by adducing any evidence whatsoever the classification as done by the adjudicating aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Based on this statement and precisely for the reason that the product manufactured by the Assessee seems to not be 'chewing tobacco', aforesaid show cause notice dated 30.03.2007 came to be issued by calling upon the Assessee to show cause as to why the short-paid duty amounting to Rs. 4,28,65,508/- should not be recovered. The said show cause notice came to be adjudicated and the Commissioner confirmed the said demand. 58. Being aggrieved by the order dated 02.04.2008 passed by the Commissioner, appeal before the tribunal was filed and as already noticed hereinabove, there were divergent views of the Member (Judicial) and Member (Technical). The judicial member at paragraph 16 of the order held that the Appellant (Assessee) had properly classified it as 'chewing tobacco' under CET SH 2403 9910 and applying the principles laid in M/s. Urmin Products Private Limited (which is the subject matter of Civil Appeal No. 10159-161 of 2010) allowed the appeal whereas the technical member disagreed with the said view and held that the product manufactured by the Appellant-Assessee is to be classified as 'zarda/jarda scented tobacco' under CET SH 2403 9930 and sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 16/2006 dated 11.07.2006, the product 'zarda/jarda scented tobacco' was brought back within the MRP-based assessment benefit. Thus, the burning issue would be between the period 01.03.2006 to 11.07.2006 which in the instant case relates to 01.03.2006 to 10.07.2006. 63. In the instant case, the facts do not disclose there being a change in the declaration of the product manufactured by the present Respondent herein, as was in the case with M/s. Urmin Products Private Limited. Even otherwise by virtue of the change from Six-digit tariff to Eight-digit tariff era and during the period 01.03.2006 to 11.07.2006. Though the generic word 'chewing tobacco' including preparation commonly known as "khara masala, quiwam, dhokta, zarda, sukha, surti" or "chewing tobacco and preparation containing chewing tobacco" got bifurcated or took its new birth by virtue of which the said entry was re-organised and classified under three headings namely 'chewing tobacco' (2403 9910), 'preparations containing chewing tobacco' (2403 9920) and 'zarda/jarda scented tobacco' (2403 9930), the heading 'zarda/jarda scented tobacco' did not find a place in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed such headings or Notes do not otherwise require, according to the provisions of the Rules that follow". 27. Rule 2 deals with (i) incomplete or unfinished articles; and (ii) mixtures or combinations of material or substance. While Rule 2(a) deals with incomplete or unfinished Articles, Rule 2(b) deals with mixtures or combinations of a material or substance. 28. Rule 3 deals with cases where goods are classifiable under two or more sub-headings. But Rule 3 begins with a reference to Rule 2(b). Therefore, it is necessary to extract Rule 2(b) and Rule 3 together. They read as follows: "2. (a)*** (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cented tobacco' by the Revenue, whereas the Assessee has taken a stand that by addition of the scent or flavour, it would not partake the character of the 'zarda/jarda scented tobacco' but continues to be 'chewing tobacco'. In this background, the difference between 'chewing tobacco' and 'zarda/jarda scented tobacco' if attempted to be ascertained from the definition found in the glossary of Bureau of Indian Standards, particularly in terms of definition and preparation, it is classified as under: "2.27 'Chewing Tobacco'- Chewing tobacco, as its name suggests is a tobacco preparation for chewing purpose, also taken with paan (betel leaf). Gutka, surti, zarda, quiwam and dokta are some of the different types of chewing tobacco preparations. 2.184 'Zarda'- A chewing tobacco product made of highly scented and flavoured tobacco flakes. Chewed along with betel nut and paan (betel leaf)." 66. A careful perusal of the meaning allocated to the concerned products, 'Chewing Tobacco' and 'Zarda' leads to formulation of the following distinction based on the different parameters as under: "Preparation and Form Chewing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the product which was sought by the Assessee. It is settled law that the onus/burden of proof for change in classification of the product lies on the Department, particularly when it wishes to challenge a long-accepted classification. This Court in the case of HPL Chemicals Limited v. CCE, Chandigarh: 2006 5 SCC 208 while discussing the onus/burden of proof in matters of chargeability held as follows: "28. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the Assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue. On the one hand, from the trade and market enquiries made by the Department, from the report of the Chemical Examiner, CRCL and from HSN, it is quite clear that the goods are classifiable as "denatured salt" falling under Chapter Heading 25.01. The Department has not shown that the subject product is not bought or sold or is not known or is dealt with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient evidence before this Court determine the nature, characteristics, contents, and composition of the product in order to adjudicate the present dispute purely on the issue of classification and hence no attempt can be made to determine the appropriate entry of classification for the product manufactured by the Assessee at the relevant period of time of the dispute. The Revenue has also not raised any specific grounds in relation to any wilful misstatement with an intention to evade duty on part of the Assessee, as opposed to the case of Urmin wherein one of the main grounds urged was the intention to avoid payment of duty. It is pertinent to mention that there is a specific observation made by the Commissioner in his OIO dated 30.03.2007 that no wilful suppression is attributable to the Assessee, and placing reliance on this very observation, the tribunal had also set-aside the penalty imposed upon the assesssee. It may be noted that this Court in the case of CCE v. Damnet Chemicals Private Ltd. (2007) 7 SCC 490 had held: "26. In the circumstances, we find it difficult to hold that there has been conscious or deliberate withholding of information by the Assessee. There has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers. In the absence of iota of material, the finding of the tribunal cannot be displaced. It would be of benefit to extract the finding recorded by the third member of the tribunal, who upheld the finding of the judicial member and it reads: "9 In the tariff the expression xxxx practice. In the present case, as the product is flavour chewing tobacco and it is bought and sold in the market as chewing tobacco. Further the Appellant from the beginning classifying the same as chewing tobacco and after the period in dispute also classified the same as chewing tobacco. Hence I find merit in the contention of the Appellant that the product in question is chewing tobacco and classifiable under Heading 24039910 of the Tariff." 71. Upon anxious consideration of the aforestated facts, coupled with lack of cogent evidence for the purpose of determination of the classification entry with respect to the product manufactured by the Assessee, we deem it necessary to not interfere with the findings of the tribunal in light of the settled judicial findings of this Court which directly have a bearing on the facts of the present case. 72. At the cost of repetition, we would further like to rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , they would be manufacturing 'chewing tobacco' falling under CET SH 2403 9910 instead of 'scented zarda/jarda tobacco' falling under CET SH 2403 9930 and accordingly submitted a revised form to the competent officer. In the background of frequent changes made in the classification by the Assessee and in order to ascertain the proper classification of goods, the officers of the department drew the samples of the products under panchnama dated 01.06.2015 and forwarded the same to the chemical examiner, CRCL, New Delhi and received the test report on 03.06.2015. It was found that the 'chewing tobacco' contains identical ingredients that are contained in 'scented zarda/jarda tobacco.' It was also noticed by the department that Assessee through communication and declaration form filed prior to 28.05.2015 had mentioned their product as Pan masala and "scented zarda/jarda tobacco". Thus, having found that the product manufactured by the Assessee namely, contains the same ingredients as 'chewing tobacco' and 'scented zarda/jarda tobacco' and involves the same manufacturing process which was confirmed by the CRCL Report vide dated 03.06.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhopal for the period of June 2015 to February 2016 which culminated in order-in-original dated 20.12.2017. The said order held that the Assessee has misclassified the product as 'chewing tobacco' instead of 'zarda/jarda scented tobacco' and the differential duty claimed in Show Cause Notice was affirmed. The said order became the subject of appeal No. 51978 of 2018 and No. 51319 of 2018 before the CESTAT which vide the common order dated 14.11.2018 set aside the OIO. SUBMISSIONS OF PARTIES 79. Ms. Nisha Bagchi learned Counsel appearing for Revenue, would contend, that tribunal committed a serious error in holding the product in question as 'chewing tobacco' though it was to be classified as 'zarda/jarda scented tobacco'. She would contend that tribunal failed to appreciate the test report dated 4.11.2015, suggested that the product did not contain added lime and yet on the ground test reports not having been drawn a finding has been recorded by the tribunal to the effect that adjudicating authority was not in a position to correlate the test report in the absence of test memo. She would also contend that tribunal failed to notice that Assessee it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely no market enquiry was conducted to ascertain the common parlance understanding of the product. The product sold by the Assessee had been described on the package as 'chewing tobacco premium' and as per the Legal metrology (packaged commodities) Rules 2011, the labelling/description contained on the packaging is determinative of the goods contained in the package, until proved to the contrary. Hence, the Assessee has prayed for dismissal of the appeal. DISCUSSION & FINDINGS 81. It is pertinent to note at the outset that show cause notice dated 02.02.2016 for the classification of the product is the subject matter of the appeal before the CESTAT in Appeal No. E/53421 of 2018 where under the order dated 16.07.2018 is impugned before it. The said order dated 16.07.2018 has been passed by the Commissioner pertains to the period of June 2015 to August 2015 where the Commissioner has adjudicated and passed an order regarding mis-classification. 82. The orders dated 30.10.2015, 27.11.2015, 31.12.2015 and 29.01.2016 which were impugned before the Commissioner (Appeals) were disposed of on 23.10.2017 in the background of the show cause notice dated 02.02.2016. 83. The Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no change in the manufacturing process of both the items and the product was claimed to be 'chewing tobacco' containing the same ingredients as that of 'zarda/jarda scented tobacco'; (2) The declaration was filed by Assessee as 'scented zarda/jarda tobacco' up till 27.04.2015; (3) The duty payable had been determined on the basis of the deemed capacity of production Under Rule 6(2) of the CTPM Rules. 85. On omission of Compounded Levy Scheme vide Act No. 14 of 2001 Section 3A of the CE Act, was again inserted by Act 18 of 2008, hence 'chewing tobacco' was notified Under Section 3A by Notification No. 10 of 2010 dated 27.02.2010. From time to time, several Notifications were issued increasing rate of duty for 'chewing tobacco', unmanufactured tobacco. Notification No. 4 of 2015 dated 01.03.2015 was issued notifying the deemed capacity of production per packing machine per month, on the same day on which Notification No. 5/2015 was issued. Subsequently, by Notification No. 25/2015 dated 30.04.2015 came to be issued under which the rate of duty per packing machine per month was notified which was based on packing speed. The differential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cco' vide Notification No. 25/2015 dated 30.04.2015. The Deputy Commissioner thereafter vide Order dated 13.01.2016 amended Assessee's declaration dated 08.01.2016, wherein Assessee classified the product as CET SH 24039910 i.e., 'chewing tobacco', and Deputy Commissioner reclassified it to CET SH 2403 9930 i.e., 'zarda/jarda scented tobacco', w.e.f. 16.01.2016. The Deputy Commissioner in his Order dated 13.01.2016 justified the reclassification on account of discovery of the fact that similar manufacturer i.e, M/s. Dharampal Satyapal was manufacturing the same product with identical manufacturing process and classifying the product as 'zarda/jarda scented tobacco'. Subsequent order came to be passed on 17.02.2016 correcting the next declaration dated 11.02.2016 w.e.f. 18.02.2016, after affording a personal hearing. 89. The Revenue had also issued two show cause notices pertaining to the goods manufactured at two different factories of the Assessee. Show cause dated 04.05.2016 was issued for the factory located at 1D, A-34/35, Sector 60, NOIDA (hereinafter referred to as "1D factory") and show cause notice of same date was also issued for the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sification of a product arises, the initial burden is on the Department/Revenue, and it can be contested by the Assessee and thereafter the dispute is to be adjudicated by following the principles of natural justice. He has submitted that these aspects though urged before the tribunal, had been completely ignored and as such impugned orders are required to be set aside by this Court. 94. He would elaborate his submissions by contending that the issue of classification is an independent issue in itself and no decision on the classification can be taken in a matter concerning the approval of declaration Under Rule 6 of the CTPM Rules. He would also contend that the description of a product as declared under the declaration filed Under Rule 6 cannot be changed by the Revenue when the product has been sold and marketed under a particular heading. He would contend that under the CETA, there is no definition of 'chewing tobacco' and 'zarda/jarda scented tobacco' and therefore the test lies in the market understanding of the product and the same would prevail. He would further contend that Under Rule 6 of CTPM Rules, the authority would only consider the number of machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as entering the market as the same product. She would also contend that the Appellant had not contested that manufacturing process which was identical and both products were marketed under the same brand name. She would also submit that the classification of the product ought to have been under CET SH 2403 9930 and there cannot be estoppel in taxation matters for rectifying the past erroneous classification/ declaration which was approved pursuant to intentional misdeclaration and wilful suppression. To conclude her arguments, she would submit that the adjudicating authority and the tribunal have considered the factual matrix and arrived at a well- reasoned conclusion based on the characteristics of the product, the test reports applying the commercial parlance, admission of the Assessee, and the definitions found in IS glossary and existing precedents. Hence, by relying upon the following Judgments she has sought for dismissal of the appeals: (i) CCE v. Cotspun (1999) 7 SCC 633 (Para 14, 15) (ii) Vivek Narayan Sharma v. Union of India 2023 (3) SCC1 (iii) Hindustan Poles Corpn. v. CCE (2006) 4 SCC 85 (iv) Mishra Zarda Traders v. State of Orissa 1987 SCC Online 363 (v) Swi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 which would have direct bearing on the points formulated hereinabove is extracted herein below for immediate reference and it reads: "Rule 6. Declaration to be filed by the manufacturer. - (1) A manufacturer of notified goods shall, immediately on coming into force of these rules, and not later than 8th March, 2010, declare in Form 1 annexed to these rules, (i) the number of single-track packing machines available in his factory; (ii) the number of packing machines out of (i), which are installed in his factory; (iii) the number of packing machines out of (i), which he intends to operate in his factory for production of pouches of notified goods with lime tube and without lime tube, respectively, with effect from the 8th day of March, 2010; (iv) the number of multiple track or multiple line packing machine available in his factory; (v) the number of multiple track or multiple line packing machines out of (iv), which are installed in his factory; (vi) the number of multiple track or multiple line packing machines out of (iv), which he intends to operate in his factory for production of pouches of notified goods without lime tube and with lime tube, respectively, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted subject to the modifications, if any, which the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, may communicate later on but not later than thirty days of filing of the declaration." 100. A perusal of the above Rule would indicate that the manufacturer of notified goods should immediately on coming into force of the Rules (08.03.2010) file a declaration in Form No. 1 declaring the details of notified goods as prescribed or specified Under Sub-rule (i) to (x) and on receipt of such declaration the jurisdictional Deputy Commissioner or the Assistant Commissioner of Central Excise, namely, the Competent Authority, would approve the declaration and determine and pass orders concerning the annual capacity within three working days after making such inquiry as may be necessary including physical verification. The first proviso to Rule 6 of CTPM mandates that the authorised officer may direct modifications of the details as prescribed thereunder. The perusal of the second proviso would indicate that if the manufacturer does not receive the approval in respect of his declaration within the said period of 3 working days, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the notified goods as notified Under Sub-section (1) of Section 3A and for the relevant period. 102. The Form of declaration that has been prescribed Under Rule 6 is Form No. 1 and such declaration ought to contain the details specified thereunder. For the purposes of clarity and brevity we deem it appropriate to extract the Form No. 1 as prescribed Under Rule 6 herein below: FORM - 1 [See Rule 6] (1) Name of the manufacturer: (2) Address of the manufacturing premise: (3) ECC No: (4) Address of other premises manufacturing the same products : (5) Number of single track packing machines available in the factory: (6) Number of packing machines out of (5), which are installed in the factory: (7) Number of packing machines out of (5), which the manufacturer intends to operate in his factory for production of pouches of notified goods with lime tube and without lime tube, respectively: (8) Number of multiple track or multiple line packing machine available in the factory: (9) Number of multiple track or multiple line packing machines out of (8), which are installed in the factory: (10) Number of multiple track or multiple line packing machines out of (8), whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ET SH 2403 9930' and 'chewing tobacco' under the head 'CET SH 2403 9910' with effect from 28.02.2005. However, Notification No. 2 of 2006 which was issued in supersession of Notification No. 13 of 2002 'zarda/jarda scented tobacco' was deleted or, in other words, such Entry was omitted. 104. In the light of the two products having been notified Under Section 3A as 'notified goods' which is contemplated Under Rule 2(c), it cannot be gainsaid by the Assessee that while adjudicating the declaration filed, the issue of classification would not fall within the domain of the adjudicating authority Under Rule 6(2). In the event, that there has been improper classification of the notified goods the adjudicating authority would be empowered to rectify the misclassification, all the more, in a situation where it has been misclassified with an intention to evade a higher rate of duty. It is in the teeth of the same, that the expression "inquire, determine and pass order" will acquire great significance Under Rule 2(c). The declaration which is required to be filed Under Rule 6(1) by a manufacturer is of "notified goods". The said notified goods means as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty of the product, the condition precedent is the capacity of the production. Thus, it becomes important to ascertain the capacity of production first, which can only be done when the concerned authority is acquainted with the product as described which would ultimately assist the Competent Authority to classify the product under the appropriate tariff head as provided under CETA. Thirdly, the rationale behind Rule 6(2) is that, unless there is proper classification of the product, the Competent Authority would not be in a position to ascertain the correct classification under the tariff head and consequently would not be able to determine the annual capacity of the production of the notified goods, which may lead to improper calculation. This is more so, for every notified product may not possess similar ingredients as that of the other product. It is trite law that changes in the ingredient of a product can bring about change in the production capacity, namely, affect the manufacturing process. Thus, in the event of mis-description, wrong description or erroneous description or intentional improper classification of the product manufactured would not tie the hands of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment for the period February 1977 to May 1977 was issued on the ground that the NES Yarn ought to have been classified under old Tariff Item No. 19-I(2)(f) and the differential duty was demanded. This was followed by a second show cause notice and subsequently amended by corrigendum. The adjudicating authority upheld the contention of the Assessee by arriving at a conclusion that duty liability had been ascertained based on an approved classification list, and the question of short levy did not arise. However, the appellate authority allowed the appeal and confirmed the demand. On appeal, the tribunal held the revised assessment could be made effective only prospectively, namely, from the date of show cause notice, not earlier. This Court took note of the fact that the Assessee was required to file before the appropriate Excise Officer, for approval, a list of the goods that he proposes to clear and the said list indicated that details to be found in such approval list filed before the Appropriate Authority which not only include the description of the goods produced or manufactured by the declarant but also provided the tariff entry under which the goods that the declarant inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and passing of the order Under Sub-rule (2) of Rule 6 would not preclude the Department or Revenue from issuing notice Under Section 11A or Section 11AC of CE Act where there is wilful misstatement or suppression of fact leading to what levy or non-levy of the duty. 109. In the instant case, the declaration confined to 'chewing tobacco' falling under CET SH 2403 9910. However, during the course of such inquiry, the Competent Authority would be competent to examine as to whether the product would fall within the notified goods. In the instant case, 'zarda/jarda scented tobacco' was specified as notified goods Under Section 3A by Notification No. 17 of 2010 dated 13.04.2010 and the CTPM Rules also correspondingly had been amended on the same day i.e., 13.04.2010 by Notification No. 18 of 2010. Thus, taking into within its sweep the said 'notified goods' as defined Under Rule 2(c) of CTPM Rules for the purposes of classification and this exercise undertaken by the Competent Authority cannot be found fault with. Hence, we record our finding on the questions formulated hereinabove as under: (1) What is the purpose of the declaration filed Under Rule 6 of CTPM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2016 to the extent of appropriation of central excise duty of Rs. 1,82,56,000/- and set aside to the extent of interest of Rs. 18,59,042/ levied. 113. Being aggrieved by the same, appeal was filed before the CESTAT in Excise Appeal No. 70242 of 2018 contending before the tribunal that the order of the Deputy Commissioner dated 30.03.2016 is in violation of natural justice, namely, in the grounds of appeal before this Court it has been urged the impugned order passed by the tribunal it had failed to address the issue of abatement of Rs. 1,96,67,556/-. On perusal of the case papers and after hearing the learned advocates appearing for the parties, we notice that the tribunal has failed to examine this issue. Hence, on the short ground of tribunal having not examined this issue, the appeal deserves to be allowed. Accordingly, Civil Appeal arising out of Diary No. 3487 of 2020 is allowed and the matter is remitted to the tribunal for adjudication de novo on merits. We have not expressed any opinion on merits, and contentions of both the parties on the issue of abatement is kept open. V. COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX v. M/S TEJ RAM DHARAM PAUL - CIVIL APPEAL No. 3596 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... differential duty along with interest and same was deposited under protest. 116. On 01.07.2016 a show cause notice was issued demanding duty, interest, and penalty Under Section 11A, 11AA, and 11AC read with relevant Rules which came to be adjudicated by OIO dated 18.03.2021 whereunder the demand made under the show cause notice was affirmed. In the interregnum, the Assessee challenged the capacity determination order No. 24 of 2015 dated 18.12.2015 before the Commissioner (Appeal-I) who dismissed the appeal on the ground that it was premature as the issue relating to the classification was pending since the show cause notice dated 01.07.2016 had already been issued and it was yet to be decided vide order dated 06.12.2016. Aggrieved by the same an appeal was filed before the tribunal and tribunal held that issue of classification was open and it was to be decided by the adjudicating authority. Subsequently, OIO came to be passed on 18.03.2021, confirming the duty demand and further ordered for appropriation of the amount specified thereunder, apart from imposing of penalty. Being aggrieved by the same, appeal was filed before the tribunal which came to be allowed and the order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the product is 'zarda/jarda scented tobacco'. Hence, relying upon the following judgments the Assessee has sought for the appeal to be dismissed: '1. Prabhat Zarda Factory v. Commr. Of Central Excise [2004 (163) ELT 485 (Tri-Delhi) 2. Suresh Enterprises v. Commr. Of Central Excise, decided on 06.07.2006. 3. Yogesh Associates v. CCE, Surat-II (2005(188) ELT 251 (SC). 4. Gopal Zarda Udyog v. CCE, New Delhi 2005 (188) ELT 251 5. Dharam Pal Satyapal v. CCE New Delhi [2005 (183) ELT 241 (SC).' DISCUSSION AND FINDINGS 119. Heard the learned Counsel appearing for the parties and on perusal of the record it would emerge therefrom that the Form No. 1 dated 05.03.2015 submitted by the Assessee before the jurisdictional Central Excises Division, Kundli, it had declared that they were manufacturing 'Mahapasand zarda/jarda scented tobacco'. On 17.03.2015, Form No. 2 was submitted by the Assessee for the period 10.03.2015 to 31.03.2015, and duty was paid for the said period as per declaration in Form No. 1. On 13.05.2015 the Department by Panchnama on the same date, drew samples of the product of the Assessee's product i.e., 'Mahapasand zarda/jard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on an issue inter partes is a cogent factor in the determination of the same issue. The applicability of maxim res judicata pro veritate accipitur in the matters of classification of goods has to be seen in that perspective." 121. Even the report of the Chemical Examiner clearly reflects that it is 'chewing tobacco'. In fact, it is the Revenue that has been taking consistently inconsistent stand. In the first instance when Form No. 1 was filed by the Assessee declaring the product 'Mahapasand zarda scented tobacco', the Department drew samples from the factory premises, obtained the CRCL Report, and called upon the Assessee to reclassify its product as 'chewing tobacco' under CET SH 2403 9910 and accordingly the Form No. 1 was filed by the Assessee and duty paid in tune with the declaration filed. It is only after Notification No. 25 of 2015 came to be issued revising the duty payable on 'zarda scented tobacco' that fresh samples were drawn, and the Revenue started singing a new tune, and thus called upon the Assessee to declare the product manufactured by it as 'zarda scented tobacco'. In the light of communication dated 27.04.2015 by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r vide order dated 02.06.2015 rejected the proposed change in classification and raised the demand for the months of June 2015 to September 2015 and this order was confirmed by the appellate authority on 12.01.2016. A separate show cause notice dated 04.05.2016 was issued claiming differential duty on May 2015 which was confirmed vide order dated 16.03.2017 and the appellate tribunal set aside both the orders, namely, dated 12.01.2016 and 16.03.2017. The Assessee's attempt to contend that what was manufactured by it was 'chewing tobacco' by relying upon the sale invoices before the tribunal was successful and it was held that the product manufactured by the Petitioner was 'chewing tobacco'. Hence, the Revenue is in appeal. SUBMISSIONS OF PARTIES 125. Ms. Nisha Bagchi, learned standing counsel for the Revenue, would contend that post facto declaration by the Assessee would not be valid in view of Rule 6,7,9 of CTPM Rules. She would contend that the Assessee in its declaration had clearly declared the product in manufactured by it as, zarda scented tobacco, based on which the duty would be payable. The tribunal committed an error in proceeding on the basis that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co and not as Jarda scented tobacco. Revenue has neither disputed the manufacturing process undertaken by the Appellant which shows non-use of any scent or perfume in the product nor have made any enquiries from the dealers, shopkeepers or the ultimate consumers of the product. No evidence of procurement of Perfume or Scent as raw material and then use in the product stands produced by the. Revenue. No employee of the Assessee was examined so as to establish that perfume being used for manufacture of their final product. As such the said factor of marketing of the goods as chewing tobacco leads us to inevitable conclusion apart from other reasons as discussed above, that the product in question is admittedly chewing tobacco and not Jarda scented tobacco." 130. The aforesaid conclusion arrived at by the tribunal is just and proper based on appreciation of factual matrix which would not call for interference. Hence the appeal is dismissed. VII. COMMISSIONER OF CENTRAL EXCISE & ST ALWAR v. TARA CHAND NARESH CHAND [C.A No. 959 OF 2019] BRIEF FACTS 131. In the last group, in this batch of appeals before this Court, the Revenue is calling in question the order dated 28.03.2018 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned standing counsel appearing for the Revenue Appellant and Mr. A.R. Madhav Rao, learned Counsel appearing for the Respondent Assessee. It is the contention of the learned Counsel appearing for the Revenue that the tribunal committed an error in arriving at a conclusion that the classification of the product is 'chewing tobacco' and not 'zarda/jarda scented tobacco'. She would contend that the Commissioner had examined the process of manufacture and taken into consideration the test reports of CRCL in the light of tariff heading and the trade opinion, including the statement of two customers to conclude that the product is 'zarda/jarda scented tobacco'. She would submit that the tribunal erroneously applied the principles laid down in Urmin products and Flakes N Flavours without applying its mind to the present case. She would contend that the tribunal has merely relied upon the communication of the superintendent of excise whereunder the assesses's prayer to classify the product as 'zarda/jarda scented tobacco' had been rejected and classified the same as 'chewing tobacco' to set aside the order in original which classified the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to February 2016) covered four different products each having a different deemed capacity of production and rate, which was a function of the speed of packing for some products. Therefore, the department would necessarily have to classify the appropriate tariff entry in order to pass orders determining the monthly deemed capacity and duty to be paid by the applicant. He would submit that even the monthly returns depict the product of the Respondent-Assessee as 'chewing tobacco' has been scrutinized and assessed to be correct for the relevant period. By referring to Rule 12 of Central Excise Rules 2002, he would contend that filing of the returns would be applicable to notified goods Under Section 3A and said returns are required to be scrutinized and assessed by which process there would be verification of the product manufactured by the Assessee and classification of the same. Hence, by relying upon the following judgments he prays for the dismissal of the appeal. a) Collector of Central Excise, Baroda v. Cotspun Ltd. (1999) 7 SCC 633 b) Union of India v. Delhi Cloth and General Mills 1963 Supp. 1 SCR 586. c) Collector of Central Excise, Kanpur v. Krishna Carbon Pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tobacco', for which there was also an order of determination passed Under Rule 6(2) of CTPM rules. Whereas in the other matters, namely Urmin and Flakes-n-Flavourz, the facts were entirely different. In Urmin Products the Assessee had declared the product as 'chewing tobacco' and then changed the classification to 'zarda/jarda scented tobacco' and again came back to the original position of declaring it or classifying it as 'chewing tobacco'. These classifications in Urmin Products were at the behest of the Assessee himself. In Flakes-n-Flavourz, the Assessee was alleged to be manufacturing 'zarda/jarda scented tobacco' and clearing it as 'chewing tobacco', and on facts it was found that there were additives added to the tobacco. In the said case this Court on facts held that there was no wilful suppression attributable to the assesssee and the Revenue had failed to establish the product as 'zarda scented tobaccot'. 139. In the instant case the Assessee had clearly declared his product as 'zarda/jarda scented tobacco' falling Under Sub-heading 2403 9930 in Form 1 filed and based on the said declaration, capacity determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not make any attempt to lead any evidence that there was any wilful misstatement or suppression of facts with intent to evade payment of duty." 140. In the facts of the present case, there has been no penalty levied Under Rule 26 on the ground that there has been no intent to evade duty. In fact, the commissioner in his order dated 27.09.2017 concludes at para 48.2 to the following effect: "..in view of the above there is no fraud or collusion or any wilful misstatement or separation of facts with intent to evade payment of duty to invoke the provisions of Section 11A (4) of Central Excise Act, 1944 in the present case." 141. It is also pertinent to note that on 04.03.2015 the Respondent- Assessee sought to make a change in the registration certificate and claimed that the product manufactured by it was zarda/jarda. However, the Appellant-Revenue called upon the Respondent to withdraw the application for registration as 'zarda' and to show it only as 'chewing tobacco' and thereafter application showing the product as 'chewing tobacco' came to be filed on 06.07.2015, and accordingly said application was allowed on 23.07.2015 vide annexure A-45 (volume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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