ROSHAN LAL AGARWAL Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is producing tobacco dust and manufacturing chewing tobacco powder according to the allegation in the petition. A raid was conducted on the factory premises by a team of Central Excise and Customs Collectorate on 30-5-1990. Some documents, bills and 12 bags of tobacco dust and six bags of tobacco leaves were seized from his premises. According to the petitioner he is only producing those goods which are not subject to any excise duty. A show cause notice was issued to him on 14-11-1990 (Annexure-7) mentioning the items which were collected by the department on the basis of which it was of the opinion that the petitioner was manufacturing tobacco powder deliberately by crushing tobacco leaves in the machines with the aid of power and this was classified in sub-heading No. 2404.90 of Schedule to the Central Excise Tariff Act, 1985 attracting duty at 15 per cent ad valorem. The show cause notice required the petitioner to explain as to why the bags seized should not be confiscated and why the penalty should not be imposed. The petitioner submitted a detailed reply to the notice and according to him the goods/articles collected from his factory was not manufactured tobacco subject to duty but it was unmanufactured tobacco leaves and no duty was leviable on the same. The Collector, Central Excise and Customs, Rajasthan decided the matter vide Annexure-9 dated 15-9-1992 and was of the opinion that the assessee was deliberately manufacturing tobacco powder with the aid of power and his plea that it was tobacco dust was not accepted.

(2.) The learned counsel for the petitioner has raised several grounds in order to argue that the material was tobacco dust which is exempt from duty and that full opportunity of showing cause was not afforded to him. According to him the report of the Assistant Collector as has been referred to in para No. 7 of the order of the Collector was not furnished to him, as such he could not explain the position fully.

(3.) Before arriving at a decision as to whether a particular item is liable to excise duty or not, it is first necessary to determine as to what the item is and how it can be classified. This is a subject matter of evidence and complete enquiry in this respect has to be made. The finding given by the Collector in this respect cannot be said to be very specific and even the Assistant Collector was not of a firm view as to whether the tobacco dust/powder under seizure was obtained by deliberate crushing of tobacco leaves or it arose during the course of manufacturing bidi patti.