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2020 ] INDEX - 1st April, 2020 xxiii
demanding duty after classifying same under Tariff Item 2403 99 10 of
Central Excise Tariff - HELD : In first round of litigation, aforesaid test
report was discarded as unreliable evidence and matter was remitted for
readjudication after getting goods re-tested - However, since samples of
goods expired due to long time, readjudication has been done on the
basis of same test report - This report not reliable inasmuch two reports
were submitted by Chemical Examiner - In first report, it was mentioned
that tested Tobacco Powder was a coarse powder which may be
considered as manufactured tobacco - In second report, given on the
basis of department’s subsequent communication, it was stated that said
powder has been found mixed with other ingredients like katha, calcium
oxide or flavouring agents - If goods were found in coarse stage as per
first report, then there is no question of their having been mixed with
other goods ibid - Further, cross-examination of Chemical Examiner was
not allowed during adjudication proceedings - No other evidence,
including any market survey, has been adduced by Department to
substantiate its stand - Even otherwise, during search, neither any
ingredients for mixture as mentioned ibid were found in factory nor any
mixing machine found - Only machines which were found were meant
for drying, cutting, crushing and grinding - In their statements, various
persons of appellant and its sister unit also stuck to stand that after
purchasing tobacco leaves from farmers only process undertaken was to
convert it into powder, pack it in branded bags and sent to sister unit for
export - Test report of reputed Agricultural University, produced by
appellant also confirming that goods are unmanufactured tobacco - In
view of above, goods are not manufactured tobacco and merit
classification as un-manufactured tobacco classifiable under Heading
2401 ibid on which no Central Excise duty payable - Demand set aside -
Section 11A of Central Excise Act, 1944 — Borsad Tobacco Co. Pvt. Ltd. v. Commr.
of C. Ex. & S.T., Ahmedabad-III (Tri. - Ahmd.) ....................... 156
Undervaluation of SS Flats, demand not sustainable in absence of cogent
evidence - See under DEMAND .......................... 129
Undervaluation charge of goods solely based on statement of buyers not
presented for cross-examination not sustainable - See under
VALUATION (CENTRAL EXCISE) ........................ 121
Unmanufactured Tobacco vis-à-vis Manufactured tobacco, classification of -
See under TOBACCO POWDER (SNUFF) .................... 156
Unrefined lead ingots converted into refined lead ingots to make lead alloys
for making batteries, activity amounts to manufacture - See under
MANUFACTURE ................................. 172
Utilization of accumulated credit on abolishing of Money Credit scheme,
scope of - See under MONEY CREDIT SCHEME ................. 56
VALUATION (CENTRAL EXCISE) :
— Charge of undervaluation of goods solely based on statement of buyers
not presented for cross-examination not sustainable in absence of any
documentary evidence showing cash receipts from buyers particularly
when such statement inconsistent as they initially admitted cash
payment to assessee through angadias/dealers but later on stated that
the same handed over to their employee - Further, statement of co-
accused manufacturers who were also not presented for cross-
examination and also being inconclusive not admissible in evidence -
EXCISE LAW TIMES  1st April 2020  73