No, Bíonn sé ag caitheamh tobac does not mean "He is smoking tobacco", which would normally be understood as meaning he is doing it right now, and is tá sé ag caitheamh tobac in Irish. Bíonn sé ag caitheamh tobac means "He smokes".
You would use Bíonn sé ag caitheamh tobac arís in a sentence like "He is smoking again", talking about someone who had given them up, but has started to smoke on a regular basis again. When used in that context "smoking" doesn't mean that it is happening right now, just that it is a regular occurrence.
And it isn't necessary to translate the tobac. The Irish for "smoking" is caitheamh tobac.
"He smokes tobacco" implies that it is something that he does habitually - it is a good translation of the explicitly habitual "bíonn sé ag caitheamh tobac".
Contrast that to "bíonn sé le do mháthair" (https://www.duolingo.com/comment/4315044). Translating that as "He is with your mother" does not capture the habitual sense of the Irish "bíonn", whereas "he does be with your mother" does capture that sense (at least for those of us familiar with the Hiberno-English "does be").