FINAL ORDER NO. 60291-60299/2026

DATE OF HEARING: 20.03.2026 DATE OF DECISION: 08.04.2026

P. ANJANI KUMAR:

The present appeals are directed against the impugned order dated 30.03.2012 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon. The details are as follows:

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2. Brief facts of the case are that the appellants were engaged in manufacture of branded chewing tobacco falling under Central Excise Tariff Heading 2404.41 (now 2403.99.10) after certain time, the appellants started manufacturing a variety of tobacco known as spit tobacco classifying the same under 2404.49 (now 2403.99.90). Revenue, on conduct of an investigation against the appellants, was of the opinion that the impugned goods i.e spit tobacco was classifiable under 2404.41 and 2404.49 as classified by the appellants and that the product manufacture by the appellants was chargeable to central excise duty in terms of Section 4A and not Section 4 w.e.f. 01.03.2003. Various show cause notices were issued to the appellants. The original authority, in the first round of litigation, concluded that the appellants have classified the goods correctly as spit tobacco; Commissioner (Appeals) upheld the order. On an appeal filed by Revenue, this Bench vide order dated 28.10.2009 remanded the case back to the original authority for fresh adjudication. In pursuance of the directions given by this Bench, samples of impugned goods i.e branded spit tobacco were drawn on 20.04.2010 and were sent to the Chemical Examiner, CRCL, New Delhi, who vide reports dated 02.06.2010 & 28.07.2010 opined that the product was manufactured tobacco and as per the classification given on the website of National Institute of Dental & Craniotical Research (NIDCR). Accordingly, the original authority confirmed the duty demanded in the show cause notices along with equal penalty. Commissioner (Appeals) vide the impugned order dated 30.03.2012 upheld the original orders. Hence, these appeals.

3. Shri Naveen Bindal, learned counsel for the appellants submits that the impugned product cannot be covered under the definition of chewing tobacco as the same is not chewed but spit out after keeping some time in the mouth; the ingredients and the process of manufacture are different; reliance on NIDCR is not relevant as they place snuff, chewing tobacco and smokeless tobacco in the same category whereas as per the tariff snuff falls under 2403.99.60 and chewing tobacco under 2403.99.10. The impugned product is further processed after dipping the chewing tobacco in different flavours. He submits that the burden of proving the classification is on the Department as held in Garware Nylon – 1996 (87) ELT 12 (SC) and Megha Plastics Ltd. – (2023) 3 CENTAX 238 (Cal.). He submits that penalty cannot be imposed in an issue involving classification as held in Chakkiath Brothers – (2014) 3 KLT 222 and J K Synthetics – (1994) 4 SCC 276.

4. Learned counsel further submits that the issue of classification in the impugned case is of only academic importance. He submits that the Revenue proposes to levy duty under Section 4A of the Central Excise Act, 1944. The impugned product i.e. spit tobacco is packed in small pouches of 5 gm and 9 gm in any case less than 10 gm; therefore, the same is entitled to exemption under Rule 34 (1) (b) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977; it was held in Loknath Prasad Gupta – 2006 (204) ELT 412 that 25 pouches of Khaini, each containing 5 gm/ 9 gm do not attract the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.

5. Shri S.K. Meena, learned Authorized Representative for the Department reiterates the findings of the impugned order.

6. Heard both sides and perused the records of the case. We find that though the Revenue has gone into the issue of classification, we find force in the argument of the learned counsel for the appellants that the decision on classification will have no bearing on