ORDER
Jyoti Balasundaram, Vice President
1. After hearing both sides for some time on the applications for waiver of pre-deposit of Rs. 78,51,236 confirmed as differential duty on clearances of chewing tobacco during the period April 1999 to June, 2000 by M/s. P.P. Patel & Co. and penalty of equal amount under Sec. 11A and penalty of Rs. One lakh under Rule 173Q(1) imposed on the company and penalty of Rs. One lakh on the Manager of the applicant company, we found that it was possible to hear and decide the appeals themselves at this stage and hence proceed to do so with the consent of both sides and after waiving pre-deposit.
2. The case of the department in a nutshell is that the manufacturer of unbranded chewing tobacco cleared the entire quantity to their other unit and did not correctly value the goods for the reason that the assessable value was not correctly determined under Rule 6(b) of the Central Excise (Valuation)Rules 1975 read with Board’s circular No. 258/92/96-CX dtd 30.10.96.
3. The contention of the assessee is that the benefit of the exemption Notification No. 121/94 CE is available to them even for the period in dispute in the present case as the Notification stipulates that if any unbranded chewing tobacco cleared from one factory to other factory of the same manufacturer for the manufacture of branded chewing tobacco, exemption is available to the unbranded chewing tobacco subject to the condition of following the procedures set out in Chapter X of the Central Excise Rules and although the assessee did not follow procedures set out in Chapter X, it was for the reason that subsequent to an adjudication order dated 10.3.99 of the Asstt. Commissioner who denied the benefit of Notification No. 121/94, the assessees were required not to avail of the benefit of Notification and cleared the unbranded chewing tobacco to their other factory on payment of duty without availing the benefit of Notification. The Id. counsel for the assessees submits that the order of the Asstt. Commissioner by which the benefit of Notification was denied for the period upto 1994 was under challenge before the Commissioner (Appeals) who vide order dated 28.4.03 set aside the Adjudication order and held that the benefit of the Notification was admissible to the assessee since the goods had been cleared to other factory by following Chapter X procedure during that period. The assessee contends in the light of the Supreme Court decision in the case of CCE, Pune v. Wander Ltd [2003(157)E.L.T.3 S.C)] that when the goods are exempted from payment of duty, the question of valuation would not arise.
4. Since the order of the Commissioned Appeals) by which the denial of the benefit of the same Notification was set aside was not placed before the Commissioner during the present proceeding, the interest of justice require that the matter be considered afresh in the light of the order of the Commissioner(Appeals) dated 28.4.03. We, therefore, set aside the impugned order and remand the case for fresh decision in the light of the above to the jurisdictional Commissioner who shall pass fresh orders after extending reasonable opportunity of hearing to the appellants.
5. The appeals are thus allowed by way of remand.