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TMI Blog2024 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... l re-calculate the duty liability accordingly and the appellant will pay the same along with interest and equal penalty under Section 11AC of CEA 1944. In view of the above, I pass the following order. ORDER The appeal is partly allowed and the O-I-O is modified in above terms." 2.1 Appellant is engaged in the production and clearance of handmade branded unmanufactured tobacco under the brand name of 'Rajhans'. Investigations were undertaken against the appellant, claiming that the appellant had mis-classified their goods as unmanufactured tobacco whereas the same was manufactured tobacco, for the reason that they were adding flavours. A show cause notice dated 16.04.2015 was issued to the appellant asking them to show cause as to why:- "(i) The differential Central Excise duty amounting to Rs.13,74,832.00 should not be demanded and recovered from them under Section 11A(4) of Central Excise Act, 1944 along with interest at appropriate rate on aforesaid amount under Section 11AA of the Act ibid; (ii) Penalty should not be imposed upon them under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002 for willful mis-statement and sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat appellant has admitted the product as manufactured tobacco cannot be the reason for holding against them. It is settled in law that there cannot be any estoppel against the law in the matter of classification in view of the following judgments:- A. Elson Machines Pvt. Ltd. [1988 (38) E.L.T. 571 (S.C.)] "8. The next submission on behalf of the appellant is that the Classification Lists had been approved earlier and the Excise authority was estopped from taking a different view. Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law and, therefore, this contention must be rejected." B. Plasmac Machine Mfg. Co. Pvt. Ltd [1991 (51) E.L.T. 161 (S.C.)] 6. The appellants contention that the department having earlier approved the classification of Tie Bar Nuts under Tariff Item 68 has no justification for its revision is, to our mind, not tenable inasmuch as there could be no estoppel against a statute. If according to law Tie Bar Nuts fall within Tariff Item 52 the fact that the department earlier approved their classification under Tariff Item 68 will not estop it from revising that classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d post the brief period of February 2012 to August 2012. The impugned order itself hold that the products produced and cleared by the appellant during the entire period of demand was unmanufactured tobacco. In the case of Yogesh Associates [2006 (195) E.L.T. 196 (Tri. - Mumbai)] (affirmed by Hon'ble Supreme Court as reported at 2006 (199) E.L.T. A221 (S.C.) Bombay Bench has held as follows: "The above finding accepts that raw tobacco is used as a chewing tobacco and consumed as such at the point of individual consumers consumption, by mixing of lime and at times with lime and other additives. There is no lime added in the entity herein to render it a Chewing Tobacco, as it leave the premises. The Appellants have relied upon the Apex Court decision in the case of Damodar J. Malpani - 2002 (146) E.L.T. 483 (S.C.) wherein the Apex Court while dealing with the classification of chewing tobacco has laid down, "2. It is not in dispute that the appellants product is chewing tobacco. It is also no tin dispute that chewing tobacco is not necessarily manufactured tobacco or classifiable under Tariff heading 24.04 the classification of chewing tobacco will ultimately depend on the proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bacco‟ other ingredients being non-tobacco origin and thereafter relying and interpreting chapter note 2 under Chapter 24 in details as recorded in paragraph 99 and 100, it was concluded that the treatments brought about on the raw tobacco rendered the product marketable to an industrial consumer and therefore the process employed by the appellants would amount to manufacture by the application of said note 2 to Chapter 24. This finding of the Commissioner cannot be upheld, when the findings and reliance as placed by the ld. Sr. Counsel on the Tribunal decision in the case of Sri Ayyappan Silicate & Chemical Products (P)Ltd. v. CCE - 2004 (165) E.L.T. 425 (T) especially the following findings therein are shown. "14... The term "Consumer" has already been extracted from the Dictionaries above. The item has to be in a marketable stage to be used by the consumer who are the ultimate users of the goods. In the present case, the solid sodium silicate was converted into liquid sodium silicate by addition of water and pumped into the boiler with a mixture of 60 Kgs. of Sodium Hypo chlorides (Liquid Bleach) which helps in colouring and bleaching the final products i.e. Sodium Sili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd "cased" ("sauced" or liquored") with a liquid of appropriate composition mainly in order to prevent mould and drying and also to preserve the flavour are also covered in this heading." A reading of these mandatory provisions to be applied, for purpose of classification, which have been totally ignored by the ld. Adjudicator, induces us to conclude that the treatments and process conducted at the premises of the Appellants are nothing more than flavouring or moistening substances added to be a curing or a casing of tobacco leaf in order to improve the aroma or keeping qualities and such Tobacco leaf,"cased" ("sauced" or "liquored") leaf with a liquid of appropriate composition, mainly in order to prevent mould and drying would not render raw tobacco to be classified out of Heading 2401 of C. Ex. Tariff Act, 1985. Casings and flavours used in cigarette/tobacco industry are understood to be a solution of flavouring materials in water or other solvents that are applied to leaf tobacco blends; in the present case application is of a solution of quimam (which is tobacco flavoured water) and other flavours including saffron water which admittedly serve no other purpose than to prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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