Trade Notice No.08/2010-CE

Dated Shillong, the  06.05. 2010.


             Subject: Compounded levy scheme for chewing tobacco and branded   
      unmanufactured tobacco under Section 3A of the Central Excise Act,
      1944 – regarding.

            The trade, Industry and all concerned are invited to Notification Nos 10 & 11/2010-Central Excise (NT) dated 27th February, 2010 whereby chewing tobacco and branded unmanufactured tobacco were brought within the purview of Section 3A (compounded levy) for the purpose of levy of Central Excise duty and rules for putting into operation the scheme were notified. The rates of duty applicable to these goods were specified in Notification No.16/2010-CE bearing the same date. The scheme has come into effect on the 8th of March, 2010. 

2.         Based on representations received from the trade and industry and feedback from field formations some changes have been made in the scheme with effect from 13th April, 2010. For this purpose, Notification No.17/2010-CE(NT), 18/2010-CE (NT) and Notification No.19/2010-CE all dated 13th April, 2010 have been issued. The Notifications have since been published on 

3.                  The scope of these changes is briefly discussed below:

(i)                 “Jarda Scented Tobacco” falling under tariff item 2403 99 30 has also been       
 brought under the purview of the Compounded levy scheme.

(ii)                The duty rates for “branded unmanufactured tobacco” and “chewing tobacco   have been revised. The rates of duty applicable to chewing tobacco (other than filter khaini) would also apply to “jarda scented tobacco”. Separate rates have been prescribed for “Filter Khaini” – a type of chewing tobacco, which has been defined in the relevant Notification.

4.            The following amendments have also been made in Chewing Tobacco and 
             Unmanufactured Tobacco Packing Machines (Capacity Determination and
             Collection of Duty), Rules 2010:

(i)                   Capacity of production per packing machine per month for chewing tobacco (including filter khaini), jarda scented Tobacco and unmanufactured tobacco (number of pouches) has been revised.

(ii)                 A proviso has been inserted to Rule 6(5) &13(1) to provided that, where it is not feasible to remove packing machines out of the factory premises, the same shall be uninstalled and sealed by the Superintendent of Central Excise in such a manner that it cannot be operated.

(iii)               Rule 8 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of duty), Rules 2010 has been amended so as to provide that where a manufacturer produces pouches with different RSPs on a single machine, the duty liability for that machine for the month would be the duty applicable to the highest of the RSP so manufactured.

5.                  Hindi version of this Trade Notice will follow.



(Hemant A Bhat )


Authority:-Letter dated 16.04.2010 issued by

                  of the Tax Research Unit, Deptt.

                  of Revenue, New Delhi, under