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160 EXCISE LAW TIMES [ Vol. 372

vide communication dated 22-4-2008 communicated that the said Gadia Powder
was “manufactured tobacco” and contained calcium oxide (CaO), katha, flavour-
ing agents, etc. That the appellants have been manufacturing, packing and clear-
ing “manufactured tobacco” in pre-printed HDPE bags having brand name as
“Afzal brand snuff tobacco” in the name of Gadia Powder and the same was
cleared without issuing any invoice and without registration of the unit despite
the fact that the same was liable to central excise duty and no exemption was
available... The process of conversion of tobacco leaves to tobacco powder would
amount to manufacture under Section 2(l) as the input and final product are hav-
ing distinct name, character and usage. Further as per Chapter Note 3 to Chapter
24 of the Central Excise Tariff Act, 1985 states as under :
“In relation to products of Heading 2401 or 2402, labelling or re-labelling of
containers and repacking from bulk packs to retail packs or the adoption of
any other treatment to render the product marketable to the consumer,
shall amount to “manufacture”.”
1.5 Thus, even the process of packing of powder from bulk to retail
packs would amount to manufacture. The appellant were engaged in the manu-
facture of tobacco products under the brand name of “Afzal Snuff Tobacco”,
classifiable under Chapter heading 2403 99 which attracts Central Excise duty at
the rate of 66% (BED 50% + NCCD 10% + Additional duty 6%) and Education
cess and Higher Secondary Education cess thereof, without obtaining Central
Excise registration and without following excise procedure. Central Excise duty
of Rs. 19,57,824/- is payable on the said 1152 bags and M/s. SEPL had provided
packing material to the appellant when they were aware that the appellants were
manufacturing “branded manufactured tobacco without being registered. The
appellant were issued show cause notice dated 25-4-2008 wherein it was pro-
posed to confiscate the 1152 bags of manufactured snuff tobacco bearing brand
name “Afzal (Reg.) Snuff Tobacco” and to impose penalty under Rule 25 of Cen-
tral Excise Rules, 2002 read with Section 11AC. Shri Salimbhai Yakubbhai
Momin, supervisor, Shri Sirajbhai Gulamnabi Vekariya, Accountant, Raffique
Sattar Kachhi, Manager, Shri Arif Abdul Kadar Fazlani, and Shri Faisal
Yunusbhai Fazlani, directors were also proposed penalties u/s 26 of CER, 2002.
Vide adjudication order dated 5-1-2009 the show cause notice was adjudicated
thereby ordering confiscation of seized goods and imposition of penalties.
1.6 M/s. BTPL were also issued another show cause notice dated
28-4-2010 proposing “Afzal brand Chewing Tobacco” to be classified as branded
manufactured chewing Tobacco falling under Chapter sub-heading 2403 99 10 of
the CETA 1985 and thereby demanding Central Excise duty of Rs. 1,90,38,063/-
on 559650 kgs of goods manufactured and cleared by the Appellant, along with
interest and to impose penalty u/s 11AC of CEA, 1944 read with Rule 25 of the
CER, 2002. M/s. SEPL were also proposed to impose penalty under Rule 26 of
CER, 20002. It was also proposed to impose penalty under Rule 26 on Shri Faisal
YunusbhaiFazlani, Shri Arif Abdul Kadar Fazlani, Shri Raffique Bhai Sattar Ka-
chhi, Shri Sirajbhai Gulamnabi Vekariya, and Shri Salimbhai Yakubbhai Momin.
The said show cause notice was adjudicated by the Commissioner, Central Ex-
cise, Ahmedabad-I vide OIO No. AHM-CEX-003-COMMR-013-13, dated 7-3-
2013, wherein he confirmed the proposal of the show cause notice and also im-
posed penalty upon M/s. SEPL and other noticees.
1.7 Aggrieved by the orders dated 5-2-2009 and 7-3-2013, the appellant
filed an appeal before the Tribunal, who vide its Order No. A/10749 to 10755/
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