Collector of Central Excise Vs. J.D. Shukla and Co. - Court Judgment

Excerpt:
1. respondent, engaged in the manufacture of branded chewing tobacco, was availing benefit of exemption notification no. 20/75 and paying concessional rate of duty. under this notification, if the value of tobacco was rs. 10.00 per kg. or less, duty in excess of 5% was exempt.in other words, this exemption was not available if the value of tobacco was more than rs. 10.00 per kg. in respect of the period from 4.6.1975 to 14.3.1978 show cause notice dated 7.4.1978 was issued alleging that value of tobacco per kg. should be arrived at by dividing the total value or the package of tobacco by the net weight of the tobacco and on such calculation, the value of the tobacco would be more than rs. 10.00 per kg. and the respondent was not entitled to the benefit of the notification and proposing demand of differential duty.though the respondent resisted the notice, the assistant collector confirmed the demand, but the collector (appeals) set aside the order confirming the demand. the department, being aggrieved, has filed this appeal.2. the supreme court in yatindranath shukla & co. 1998 (97) elt 14 (sc) has held that for the purpose of exemption notification no. 35/79 the value of chewing tobacco per kg. shall be determined by dividing the total value of the package by the total weight of the package. the language of notification no. 29/75 is similar to the language of the notification no. 35/79. therefore, the same interpretation must be applied in this case also.3. shri m. ali, jdr prayed for remand of the case on the ground that verification is necessary as to the packaging which was necessary for the purpose of delivery in wholesale at the factory gate. we are not able to agree. the sole basis of the show cause notice was that if the total value of the package was divided by the net weight of the tobacco contained in the package, the value would exceed rs. 10.00 per kg.there is no dispute that if the total value of the package was to be divided by the total weight of the package, the value would be rs. 10.00 per kg. or less. in this view, there is no scope for remand.order passed by the collector (appeals) is correct. the appeal is dismissed.

Judgment:
1. Respondent, engaged in the manufacture of branded chewing tobacco, was availing benefit of exemption Notification No. 20/75 and paying concessional rate of duty. Under this Notification, if the value of tobacco was Rs. 10.00 per kg. or less, duty in excess of 5% was exempt.

In other words, this exemption was not available if the value of tobacco was more than Rs. 10.00 per kg. In respect of the period from 4.6.1975 to 14.3.1978 show cause notice dated 7.4.1978 was issued alleging that value of tobacco per kg. should be arrived at by dividing the total value or the package of tobacco by the net weight of the tobacco and on such calculation, the value of the tobacco would be more than Rs. 10.00 per kg. and the respondent was not entitled to the benefit of the Notification and proposing demand of differential duty.

Though the respondent resisted the notice, the Assistant Collector confirmed the demand, but the Collector (Appeals) set aside the order confirming the demand. The Department, being aggrieved, has filed this appeal.

2. The Supreme Court in Yatindranath Shukla & Co. 1998 (97) ELT 14 (SC) has held that for the purpose of exemption Notification No. 35/79 the value of chewing tobacco per kg. shall be determined by dividing the total value of the package by the total weight of the package. The language of Notification No. 29/75 is similar to the language of the Notification No. 35/79. Therefore, the same interpretation must be applied in this case also.

3. Shri M. Ali, JDR prayed for remand of the case on the ground that verification is necessary as to the packaging which was necessary for the purpose of delivery in wholesale at the factory gate. We are not able to agree. The sole basis of the show cause notice was that if the total value of the package was divided by the net weight of the tobacco contained in the package, the value would exceed Rs. 10.00 per kg.

There is no dispute that if the total value of the package was to be divided by the total weight of the package, the value would be Rs. 10.00 per kg. or less. In this view, there is no scope for remand.

Order passed by the Collector (Appeals) is correct. The appeal is dismissed.