Page 270 - ELT_1_1st April 2020_Vol 372_Part

156 EXCISE LAW TIMES [ Vol. 372

2020 (372) E.L.T. 156 (Tri. - Ahmd.)
IN THE CESTAT, WEST ZONAL BENCH, AHMEDABAD
[COURT NO. III]
S/Shri Ramesh Nair, Member (J) and Raju, Member (T)
BORSAD TOBACCO CO. PVT. LTD.
Versus
COMMR. OF C. EX. & S.T., AHMEDABAD-III
Final Order Nos. A/10979-10985/2019-WZB/AHD, dated 4-6-2019 in Appeal Nos.
E/10483-10489/2018-DB
1
Tobacco Powder (Snuff) - Manufactured vis-à-vis unmanufactured
Tobacco - Classification - Demand - Department based on test report of Chem-
ical Examiner holding goods as manufactured tobacco and accordingly de-
manding duty after classifying same under Tariff Item 2403 99 10 of Central
Excise Tariff - HELD : In first round of litigation, aforesaid test report was dis-
carded 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 re-
port 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, cal-
cium 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 oth-
erwise, 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 Cen-
tral Excise duty payable - Demand set aside - Section 11A of Central Excise
Act, 1944. [paras 4, 5, 5.1, 5.2, 5.3]
Adjudication - Natural justice - Cross-examination - By not providing
appellant with copy of department’s communication with Chemical Examiner
and by denying his cross-examination for giving two different reports, natural
justice has been violated in adjudication - Section 33 of Central Excise Act,
1944. [para 5.2]
Appeals allowed
________________________________________________________________________
1 Appeal against this order was admitted for consideration by Supreme Court in 2020 (372)
E.L.T. A29 (S.C.).
EXCISE LAW TIMES  1st April 2020  318