The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the excise duty demand and penalty against the Kaipan Pan Masala who has misclassified chewing tobacco as jarda scented with the intention to evade excise duty.
The bench of Binu Tamta (Judicial Member) and Hemambika R.Priya (Technical Member) has observed that the conduct of the appellant in suppressing the facts from the Department by mis-declaring and mis-classifying their goods from time to time was with intent to evade payment of central excise duty.
The appellant, M/s Kaipan Pan Masala Pvt. Ltd. has challenged the order by which the Commissioner has decided the issue of classification of the goods manufactured by the appellant being classifiable as Jarda Scented Tobacco covered by Tariff Entry 2403 9930 instead of as Chewing Tobacco covered by Tariff Entry 2403 9910.
The issue is no longer res integra and has been decided by the Apex Court by a recent decision in Commissioner of Central Excise, Ahmedabad versus Urmin Products P. Ltd & Ors., where the Apex Court considered the issue with reference to seven separate appellants and the appeal filed by the revenue against the appellant was considered at Sl. No.3. In the decision, the Apex Court concluded that the assessee had mis-classified the goods from JST to CT for evading payment of higher duty. The issue was, therefore, decided against the appellant and in favour of the department.
The appellant submitted that the decision of the Apex Court in Urmin Products is not applicable to the present appeal as the appeal before the Apex Court had arisen from the order of the Tribunal dated November 14, 2018, whereby the order passed by the Commissioner (Appeals) was set aside, where the challenge was to the order passed by the Assistant Commissioner dated August 28, 2015 for the period, June 2015 to August 2015, whereas the appeal arises out of the order dated July 16, 2018 passed by the Adjudicating Authority.
The tribunal while dismissing the appeal held that the Adjudicating Authority has rightly confirmed the penalty of equivalent amount under the provisions of Rule 18 of Unmanufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010, read with section 11AC of the Act and rule 25 of Central Excise Rules, 2002.
Case Details
Case Title: M/s.Kaipan Pan Masala Pvt. Ltd. Versus Commissioner of CGST & Central Excise
Case No.: EXCISE APPEAL NO. 53421 OF 2018
Date: 17.04.2025
Counsel For Appellant: Aditya Kumar and Ms. Ila Nath
Counsel For Respondent: Rakesh Agarwal
Read More: Service Tax Under Wrong Registration Can Be Adjusted Against Correct Registration: CESTAT
