The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh bench has held that the product “Maha Pasand Jarda Scented Tobacco” is classifiable as “Chewing Tobacco” and not as “jarda scented tobacco” for the purpose of Central Excise Tariff Act, 1944.
The appellant, M/s. Tej Ram Dharam Paul, claimed that the product manufactured by them is chewing tobacco classifiable under heading 24039910. However, the department observed that the product is jarda scented tobacco classifiable under heading 24039930.
Mr. Ajay Sharma, Member (Judicial) and Mr. P.V. Subba Rao, Member (Technical) observed that in the show cause notice there is no finding that the appellant have used “jarda scent” in their product. Even the statements relied upon by the department nowhere mention that “jarda scent” has been used by the appellant in their product.
The Tribunal held that the commissioner has erred in not resorting to the Trade Parlance Test in the facts of the present case by erroneously observing that as the product can be classified as per the contents, there is no need to resort to the parlance test.
“In Trade parlance i.e. from packaging and presentation, sales and distribution and till its consumption by the ultimate consumer the product in issue is known as chewing tobacco only. The learned commissioner has also overlooked that the contents of the product in dispute have been prescribed under the Tariff and therefore the classification cannot be based on contents,” the Tribunal said.
Noting that jarda scented tobacco and chewing tobacco are different products for the purpose of Central Excise Tariff, the Tribunal held that “Admittedly the pouches of the products in including presentation, sales, distribution and usage issue described the product as „chewing tobacco‟ and in Trade Parlance it is known as „Chewing Tobacco‟ only. The manufacturer, distributor and the consumer, everyone understands and consume the product as chewing tobacco only. The Tribunal in the matter of Flakes-NFlavours (supra) has held that in the absence of anything to the contrary, the product in question has to be treated as per the description given by the manufacturer on outer cover of pouch, common parlance and established practice as the chewing tobacco or zarda scented tobacco have not been defined in the tariff.”
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