Shiva Tobacco Co. Vs Commissioner of Central Excise (CESTAT Chandigarh)
In this case before the Customs, Excise and Service Tax Appellate Tribunal, multiple appeals were filed against an order confirming excise duty demands and penalties on manufacturers of branded chewing tobacco and “spit tobacco.” The dispute covered different periods and involved demands raised under Section 4A of the Central Excise Act, 1944.
The appellants were engaged in manufacturing chewing tobacco classified under Tariff Heading 2404.41 (later 2403.99.10). Subsequently, they began manufacturing “spit tobacco,” classifying it under 2404.49 (later 2403.99.90). The Department contended that the product was incorrectly classified and that duty should be levied under Section 4A (based on Maximum Retail Price) rather than Section 4. Show cause notices were issued, and after remand and testing by the Chemical Examiner, the adjudicating authority confirmed the duty demand along with penalties, which was upheld by the Commissioner (Appeals).
Before the Tribunal, the appellants argued that the product was not “chewing tobacco” as it was not chewed but spat out after being kept in the mouth, and that classification relied upon by the Department was incorrect. However, the Tribunal noted that the classification dispute was not decisive for resolving the case. The central issue was whether small pouches of 4 grams and 9 grams were liable to duty under Section 4A.
