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2020 ] BORSAD TOBACCO CO. PVT. LTD. v. COMMR. OF C. EX. & S.T., AHMEDABAD-III 165

period of 9 years is not at all possible. The appellant M/s. BTPL had allowed
SEPL to use a portion of their unit to M/s. SEPL on lease under lease agreement
dated 1-4-2006. M/s. SEPL were carrying out process related to Tobacco at said
place. It is apparent from statements of directors, employees, accountant, super-
visors of the appellant firm that the premises of the appellant firm was taken
over by M/s. SEPL and the goods were owned by them. Also it is undisputed
fact that the appellant is not liable to pay any duty as the entire goods were ex-
ported. They had produced evidences to show that the goods on which duty was
demanded has been exported from Borsad unit of M/s. SEPL. The adjudicating
authority has erred in holding that the goods belonged to the appellant only, that
the appellant had manufactured the said “Afzal Brand Snuff Tobacco”.
3. Shri T.G. Rathod, Ld. Additional Commissioner, AR appearing for
the Revenue supports the findings of the impugned order and relies upon the
earlier test reports to state that the goods viz. “Afzal Brand Snuff Tobacco” are
branded chewing tobacco classifiable under 2403 99 10 and liable for duty. He
reiterates the findings of the impugned order.
4. Heard both the sides and perused the records. In earlier round of
proceedings, the matter was remanded back by the Tribunal for retesting of
samples. However, the Joint Director, CRCL, New Delhi vide communication
dated 18-10-2016 has stated that “tobacco is a natural plant product and the shelf
life is 2 years if the seal is left intact.” That the samples under reference, nine
years have been already passed from the date of drawl and hence the samples
were returned. The adjudicating authority has held that since the testing is not
possible, therefore, the test report given by the Chemical Examiner, CRCL, Va-
dodara has attained finality, hence he decided the issue of classification. On the
basis of the report of the Chemical Examiner, Vadodara, he held that since the
tobacco leaves were dried, cut and crushed/grinded in the machines installed in
the factory and after mixing of ingredients like calcium oxide, katha, flavouring
agents, the same was packed in printed plastic bags with brand name Afzal Snuff
Tobacco, the said process has resulted into manufactured tobacco, which liable to
central excise duty. He held that the Chemical Examiner can give only opinion
on chemical analysis. He has relied upon the Hon’ble Apex Court judgment in
case of Alnoori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.) wherein the Hon’ble
Court held that there was a categorical finding recorded on facts that the tobacco
powder obtained by crushing of unmanufactured tobacco leaves is a different
commercial product having a distinct name and character and since in the cases
relied upon by the Tribunal, it was categorically noticed that there was no mate-
rial placed to show a different commercial product come into existence, the Tri-
bunal was wrong in holding that the tobacco powder so obtained was classifiable
under Heading 24.01. He also relied upon the Apex Court judgment in the case
of International Tobacco Company that basic character, function and use is more
import than the name known in trade parlance. He held that though the appel-
lants claimed the goods to be “Gadia Powder”, the same is entirely a different
product from the unmanufactured tobacco having its own distinct properties and
characteristics as raw tobacco has undergone various processes like mixing of
calcium oxide, katha, flavouring agents apart from undergoing process of dry-
ing, cutting and crushing/grinding. The adjudicating authority also held that
during search, colour/katha found in the factory supports the report of the
chemical examiner. He also held that though M/s. SEPL vide letter dated
15-5-2008 showed their disagreement with the test report and requested for re-
EXCISE LAW TIMES  1st April 2020  327