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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
K.L. Rekhi, M. Santhanam, V.T. Raghavachari, JJ.
Collector of Central Excise, Pune -Appellant
Versus
Jaikisan Tabacco Co. -Respondent
Orders Nos. 375 to 380/1985-D, 375 to of 1985, 380 of 1985
Decided On : 29-10-1985
K.L. Rekhi, Member (T)
1. The point of dispute involved in all these six appeals is common. Though they arise out of two separate orders-in-appeal, the second order in fact followed the ratio of the first. The appeals were argued together before us. We are, therefore, making this combined order for all the six appeals.
2. The facts, in brief, which are not disputed, are that the respondents purchase raw tobacco, crushed in the form of flakes and packed in bulk packs, from the market. They do not add any ingredient to the tobacco, nor process it in any manner. They just re-pack the flakes into small paper/polythene packets, label the packets with their brand name and the description "Jarda" or "Bhugi" (Choora) and sell them. In retail, the 10 gms. packets sell at about 30 paise each. These are generally purchased by poor people who use the tobacco contained therein for chewing with or without the admixture of small quantities of slaked lime (such mixing is done usually on the palm of the user).
3. The point at issue is whether the tobacco Jarda or Bhugi packets prepared by the respondents are liable to duty as "Chewing tobacco" under Entry 4-II (5) of the Central Excise Tariff. In order to facilitate the discussion, we reproduce below the relevant portions of the tariff entry and Section 2(f) of the Central Excises and Salt Act, 1944 :-
Extracts of the tariff entry
"4. Tobacco.
I-UNMANUFACTURED TOBACCO
(i) 1
to * * *
(8)
II-MANUFACTURED TOBACCO
| ** | ** | ** |
5. Chewing tabacco.
| ** | ** | ** |
Extracts from Section 2.
"2. Definitions.-In this Act, unless there is anything repugnant in the subject or context-
(f) 'manufacture' includes any process incidental or ancillary to the completion of a manufactured product; and
(i) in relation to tobacco, includes the preparation of cigarettes, cigars, cheroots, biris, cigarettes or pipe or hookah tobacco, chewing tobacco or snuff;
(ia) In relation to manufactured tobacco, includes the labelling Dire-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.
| ** | ** | ** |
4. The rival contentions were put forth before us with the help of extracts from the Report of the Tobacco Excise Tariff Committee, statutory definitions of "manufacture" in Section 2(f) aforesaid, Board's Tariff Advices and judicial authorities. In substance, the department's case is that description of the goods as "Jarda" etc. and their intended and actual use for chewing squarely bring them under the entry which is specific for chewing tobacco, that the fact of "manufacture" is to be presumed in the circumstances, that repacking and labelling operations undertaken by the respondents amounted to "preparation of...chewing tobacco..." within the statutory definition of "manufacture" in Clause (i) of Section 2(f) and that, in any case, these operations, being intended to render the product marketable to the consumer, came within the ambit of Clause (ia) of the said section as well.
5. On the other hand, the case of the respondents is that only manufactured chewing tobacco (that is, the processed variety which has added ingredients like perfume, menthol, lime, katha, cardamom, spices, silver foil etc. and which because of such processing and admixture of ingredients sells at a very high price) comes within the scope of the tariff entry, that their tobacco, though known as Jarda, is unmanufactured and is purchased as such from others, that unmanufactured tobacco is exempt from duty since 1-3-1979, that they do no processing on the bulk Jarda purchased by them nor add anything to it and that their activity of just repacking and labelling cannot convert the unmanufactured tobacco into manufactured tobacco.
6. We have carefully considered the matter. We observe that the tariff entry has two clear sub-divisions-unmanufactured tobacco and manufactured tobacco. The entry "chewing tobacco" occurs under the second sub-division "II-Manufactured Tobacco". The first questi
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