ORDER
S.K. Bhatnagar, Vice-President
1. These are appeals filed w.r.t. the orders of the Collector (Appeals) dated 29.8.1991, 25.2.1991 and 19.7.1991.
2. Ld. Counsel stated that the appellants are engaged in the manufacture of flavoured snuff a preparation made out of raw snuff of tobacco on which duty had already been paid under Chapter heading 2404.50. The appellants also pack the said product and label the containers in packing acceptable to the consumers.
3. A question has arisen as to whether this product was classifiable under heading 2404.50 or 2404.60. It was the appellants contention that the product was classifiable under latter sub-heading, and therefore they were entitled to the refund claim filed by them.
4. It was also his submission that the same issue in relation to similar product had earlier arisen before the Tribunal and decided by Tribunal’s order in the case of Lachman Das Behari Lal .
5. In this case the issue was decided by a majority of opinion referring to Section 2(f), the Chapter notes and the process to which raw snuff was subjected to for converting it into the product in question, and it was held that the processing and adding of flavours, perfumes, etc. had converted raw snuff into a new product which is marketed as a preparation of snuff and is known to the trade as such. The Tribunal had also noted that heading 2404.60 refers to the item as a “preparation containing snuff in any proportion.”
6. It was their contention that their product was similar. It was subjected in the same way to processing of raw snuff and addition of menthol and other perfumes and flavours and is similarly marketed. Therefore, their product was also classifiable under the sub-heading 2404.60.
7. He would however also like to point out that the department has since filed an appeal before the Hon’ble Supreme Court and the same has been admitted as Civil Appeal Nos. 1440-1441/96 as reported in 1996 (86) ELT A-217. At the same time he would like to further point out that no stay has been granted against this order.
8. Ld. DR drew attention to the order-in-original and reiterated the department’s view as contained therein. He emphasised that the heading 2404 covers “other manufactured tobacco and manufactured tobacco substitutes; homogenised or ‘reconstituted’ tobacco; tobacco extracts and essence” and the subheading 2404.50 covers “snuff of tobacco” whereas 2404.60 covers “preparations containing snuff of tobacco in any proportion”. It was therefore the department’s contention that since it is basically snuff of tobacco, therefore, merely by addition of perfumes etc. it does not cease to be such and hence was chargeable to duty under 2404.50.
9. In response to queries from the bench to the effect that if it was the department’s contention that it still remained snuff of tobacco then how could any further duty be demanded once it was the contention of the appellants that they had purchased duty paid snuff on which the duty has already been discharged under 2404.50 and this fact was not contradicted or shown to be wrong, Ld. DR drew attention to chapter note 2 of chapter 24 and stated that in relation to products of heading No. 2404 labelling or re-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 amounts to manufacture and admittedly the appellants are doing so.
10. We have considered the above submissions. We observe that the Ld. Counsel has succeeded in pointing out to us that this issue has already been dealt with and is squarely covered by the Tribunal’s order in the case of Lack-man Das Behari Lal (supra).
11. Although it has been very fairly pointed out that an appeal has been filed against that order, since no stay has been granted by the Hon’ble Supreme Court, we feel that it is still open to us to follow the ratio thereof and proceed accordingly.
12. That apart the appellants have also stated in this case that they had purchased raw snuff on which duty had already been discharged under heading 2404.50 and there is no dispute about it. Therefore, if it still continued to be snuff classifiable under heading 2404.50 no further duty could be demanded. The fact that they are also processing, adding flavours and then re-packing into similar packets, and therefore Chapter Note 2 is also attracted would only go to show that a new marketable commodity classifiable under heading 2404.60 had emerged. Therefore the case is also not distinguishable on facts and the ratio of the aforesaid order of the Tribunal still applies. Hence, we accept the appeals.
(Dictated in open Court).
