2026-VIL-307-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Compounded levy under Section 3A of Central Excise Act, 1944 on filter khaini sachets/pillows packed manually into pouches - Respondent is manufacturer of branded chewing tobacco falling under tariff item No.24039910 and was paying Central Excise duty in terms of Section 3A of the Central Excise Act, 1944 on the basis of annual capacity - Department alleged that the process of putting filter pillow sachets into pouches manually at the intermediate stage does not render the goods as being not notified under Section 3A of the Act - Whether the filter khaini sachets/pillows packed manually into pouches are required to be considered as notified goods under Section 3A of the Central Excise Act, 1944 and subjected to compounded levy – HELD - As per Explanation 5 to Notification 16/2010-CE dated 27.02.2010, the words "with the aid of packing machine" are used only for the activity of packing the filter khaini sachets/pillows into pouches, and not for the activity of packing the chewing tobacco into sachets/pillows. Since the respondent packed the sachets/pillows manually into pouches, the same would not be covered under the compounded levy scheme. The Board's clarification in letter dated 05.03.2010, clarified that manual packing of pouches and their sealing would not come within the purview of compounded levy scheme – Further, the filter khaini sachets/pillows packed with the aid of machines cannot be considered as notified goods under the Capacity Determination Rules as they do not bear the requisite information like brand name, MRP, health warnings etc. Hence, the order of the Commissioner is upheld and the appeals filed by the Revenue are dismissed
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