Jarda Scented Tobacco Misclassified as Chewing Tobacco to Evade Excise Duty: CESTAT Confirms Demand and Penalty

The CESTAT confirmed the excise duty demand and penalty on a manufacturer of "Jarda" scented tobacco, holding that it was misclassified as chewing tobacco to evade excise duty. The tribunal upheld the revenue's contention that Jarda, being a distinct product with added scent and processing, should be classified under a higher excise duty rate. The CESTAT relied on technical evidence and industry practices to establish the correct classification of the product. This ruling underscores the importance of accurate product classification for excise duty purposes and the consequences of misclassification aimed at tax evasion. The decision serves as a deterrent against such practices in the tobacco industry.