Supreme Court Affirms Penalty On ‘Zarda’ Manufacturers For Misclassifying Product As ‘Chewing Tobacco’ For Central Excise Duty

Case: Commr. Of Cen. Exc. Ahmedabad v M/S Urmin Products P. Ltd. And Others

Coram: Justice S. Ravindra Bhat and Justice Aravind Kumar

Case No.: CIVIL APPEAL NO.10159-10161 of 2010

Court Observation: “The assessee being aware that there being no change in the nature of the products, its ingredients and also the manufacturing process had changed and misclassified the product as ‘chewing tobacco’ from ‘zarda/jarda scented’ tobacco. Had the assessee continued its classification as ‘zarda/jarda scented tobacco’, the duty payable as per transaction value under Section 4 of the CE Act would have been much more than the determination under Section 4A of CE Act after 50% abatement. It is for this precise reason for avoiding and evading payment of the higher duty, the classification was deliberately changed from ‘zarda/jarda scented tobacco’ to ‘chewing tobacco’”

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Keywords

Supreme Court Affirms Penalty, Chewing Tobacco