TMI Blog1990 (9) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... aini tobacco. It is a chewing tobacco within the meaning of the said expression as used in the Central Excise Act. Chewing tobacco was liable to excise duty, during the relevant period, under Entry No. 4II(5) of the First Schedule to the Act. The rate in force prior to 1-3-1979 was 10 per cent ad valorem. On 1-3-1979 two notifications were issued by the Central Government being Notifications No. 34/79 and 35/79, under Rule 8(1) of the Central Excise Rules. Notification No. 34/79 granted total exemption from duty to "chewing tobacco falling under sub-item II(5) of Item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944 ........ subject to the condition that such chewing tobacco is manufactured by a manufacturer who or on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he weight of chewing tobacco should be taken inclusive of the weight of the sachet and the wrapper. The chewing tobacco manufactured by the petitioner is put in small paper sachets, which are in turn packed in thick paper wrapper. For the purposes of determining the value of the product for determining the duty and rate of duty, the cost of both the sachet and wrapper are taken into account. If so, there is no reason why for the purposes of determining the weight of the product, weight of the sachet and the wrapper should not be taken into account. On the other hand, the case of the Department is that for purposes of weight, the net weight of the chewing tobacco shall be taken, although for the purposes of determining the value for determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an exemption notification. As such it has to be construed strictly. Exemption will be available only if the terms and conditions prescribed by the notification are satisfied. At the same time, a reasonable interpretation must be placed upon the notification so as to subserve the underlying object. On a consideration of rival submissions, we are of the opinion that when the notification speaks of one kilogram of chewing tobacco, it means one kilogram of chewing tobacco itself, which naturally would exclude the weight of sachet and wrapper. The mere fact that for the purpose of determining the value for the purpose of determining the duty and rate of duty, the value of the sachet and the wrapper is taken into account, is no ground for hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the market stream as the basis, the value of the tobacco should be arrived at for notification purposes after abating therefrom the value of the polythene, gunny bags, cartons so that the value of the chewing tobacco in the primary packing bearing the brand is obtained." However, the Tribunal further proceeded to observe that "the value so arrived at should be divided by the total weight of all the branded packets in which the tobacco is packed and the value so arrived should be taken as value per kg. for the purposes of the notification." Based upon this observation and also the observation occurring at the end of the preceding paragraph (Para 13), counsel for the petitioner contends that the said judgment bears out the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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