V.K. Agrawal, Member (T)
1. In this appeal filed by M/s. Shree Ganesh International the issue involved is whether Pan Masala containing tobacco manufactured by them is classifiable under Heading 24.04 as confirmed by the Commissioner (Appeals) in the impugned Order or under Heading 21.06 of the Schedule to the Central Excise Tariff Act as claimed by the Appellants. impugned product is classifiable under Heading 21.06. Finally the learned Advocate submitted that even if they are held to be liable to pay duty under Heading 24.04 of the Tariff the price realized by them should be regarded as cum-duty price in terms of the decision of the Larger Bench of the Appellate Tribunal in the case of Sri Chakra Tyres vs. CCE, 32 RLT 1 (CEGAT – LB).
3. Countering the arguments Shri P.M. Rao, learned D.R., submitted that tobacco products are classifiable under Chapter 24 of the Central Excise Tariff and once the Pan Masala containing tobacco, commonly known as gutaka, is covered by Additional Duty of Excise (Goods of special Importance), Act, 1957 it cannot be claimed by the Appellants that it will be classifiable still under Heading 21.06 ; that under Article 141 of the Constitution, the Law laid down by the Supreme Court of India is the law of land; that the Tribunal also in one decision has held that Pan Masala containing tobacco will be classifiable under Heading 24.04.
4. We have considered the submissions of both the sides. No doubt during the relevant period Pan Masala was covered by Heading 21.06 of the Central Excise Tariff and as per Note 3 to the said Chapter Pan Masala may contain tobacco. However, when M/s. Kothari Products challenged the imposition of Sales Tax on
2. Shri Naveen Mullick, learned Advocate, submitted that the Appellants manufacture Pan Masala containing tobacco; that as per Note 3 to Chapter 21 of the Central Excise Tariff Pan Masala means any preparation containing betel nuts and any one of the following ingredients namely lime, katha, tobacco, cardamom, menthol, etc.; that besides discharging the Central Excise duty under heading 21.06 of the Tariff the Appellants have been paying the Sales Tax also on the Pan Masala sold by them; that the Revenue has classified their product under Heading 24.04 of the Tariff on the ground that the Supreme Court in the case of Kothari Products Ltd. vs. Govt. of Andhra Pradesh, 2000 STC 553 has held that Pan Masala containing Tobacco is covered by an Entry in the first Schedule to the Additional Duty of Excise (Goods of Special Importance) Act, 1957. The learned Advocate further submitted that the goods in question legitimately fall under Heading 21.06 as the decision of the Supreme Court cannot be made applicable since the same was delivered in respect of Andhra Pradesh General Sales Tax Act; that as per the Rules for Interpretation of the Schedule to the Central Excise Tariff Act, the classification has to be determined on the basis of the Chapter/Section Note; that as per Note 3 to Chapter 21, the Pan Masala containing tobacco manufactured by them under First Schedule to the Andhra Pradesh General Sales Tax Act on the ground that the Additional Duty of Excise (Goods of Special Importance) Act, 1957 refers to Gudaku as other manufactured tobacco, the Supreme Court held that General Sales Tax cannot be imposed by the State of Andhra Pradesh as Gutka is a tobacco covered by an Entry in the First Schedule to the Additional Duties of Excise Act. It is thus evident that Pan Masala containing tobacco has been held to be a product of tobacco which are chargeable to Central Excise duty under Chapter 24 of the Tariff. Once the Apex Court has held that Pan Masala containing Tobacco is covered by Additional Duties of Excise (Goods of Special Importance) Act, 1957 which is applicable to tobacco and manufactured tobacco, the impugned product for the purpose of Central Excise duty cannot fall under Chapter 21 of the Central Excise Tariff. The learned D.R. has rightly emphasized that the law laid down by the Supreme Court is the law of the land and it has to be implemental. Accordingly Pan Masala containing tobacco manufactured by the Appellants is classifiable under Heading 24.04 of the Central Excise Tariff. The Appeal is thus rejected on this ground. However, the Appellants will be eligible to the statutory deduction by treating their price as cum-duty price in terms of the decision of the Larger Bench of the Tribunal in the case of Sri Chakra Tyres. The Adjudicating Authority will, therefore, re-compute the amount of duty and intimate the same to the Appellants who are liable to discharge the same. The appeal is disposed of in this manner.