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2020 ] BORSAD TOBACCO CO. PVT. LTD. v. COMMR. OF C. EX. & S.T., AHMEDABAD-III 169

powder as after mixing of katha and calcium oxide, the product may not remain
so.
5.2 We also find that the appellants had requested for cross-
examination of the Chemical Examiner as well as the cross-examination of per-
sons, under the provisions of Section 9D of the Central Excises Act, whose state-
ments were relied upon. However, no such opportunity was granted to them.
We also find that the Department did not undertake any investigation to ascer-
tain the fact as to how the impugned goods are being sold by the appellant or
M/s. SEPL in the market. It was more so required when the contents of the im-
pugned goods and the chemical examination were in doubt. The Department
could have at least verify the fact from the market as to how the appellants are
marketing their finished goods. Obviously, such an exercise has not been under-
taken, which leads only to the conclusion that the allegation of the show cause
notice is not based either upon the facts or the contents of the impugned goods.
Even the department did not retest the samples, which again vitiate the whole
adjudication proceedings. When the appellants since the very first day itself were
claiming their goods to be tobacco powder, it was imperative for the Revenue to
test the samples properly and conduct a market enquiry. It is coupled with the
fact that the officers did not find any mixtures or machines in which the process
of mixing the tobacco flakes with katha, calcium oxide and flavouring agents
takes place. Since the goods has remained unmanufactured tobacco, the same
cannot be classified under impugned classification. Our views are based upon
following judgments :
In case of Sree Biswa Vijaya Industries - 1997 (96) E.L.T. 712 (Tribunal), it
was held :
“We agree with the appellants’ Learned Counsel that it is merely a change
from one form of unmanufactured tobacco to another form. This is also
clear from the definition of manufacture in relation to tobacco. None of the
processes mentioned in Section 2(f) of the Central Excise Act, 1944 which
sets out the various processes of manufacture in relation to tobacco, are car-
ried out in the present case. No other evidence has also been brought on
record by the Revenue that tobacco powder so produced by appellants is
known in the market as a manufactured tobacco. This burden squarely rests
on the Revenue if they want to levy duty under Tariff Heading : 24.04 on
the said product under consideration. We also observe that there is a judg-
ment of the Tribunal in the case of Shree Chand Agarwal v. Collector of Central
Excise reported in 1990 (48) E.L.T. 115 (Tribunal), which helps the appellant
company in this case. In view of the foregoing discussion, we, therefore,
hold that the tobacco powder manufactured by the appellants herein would
fail under the Tariff Heading 2401.00 being manufactured tobacco carrying
nil rate of duty. The appeal is thus allowed with consequential relief to the
appellants.”
This aforesaid Tribunal’s order stands approved by Hon’ble Apex Court
as reported in 1998 (104) E.L.T. A136 (S.C.).
In case of Iswar Grinding Mills - 2000 (117) E.L.T. 743 (Tri.), it was held
that;
“5. After carefully considering the submissions on both sides and going
through the impugned Order, we find that all these judgments relied upon
by the learned Advocate, were considered by this Bench in a recent judg-
ment delivered in the case of Shri Shrikant Prasad and Others, Vide Order
EXCISE LAW TIMES  1st April 2020  331