Yes!! I remember reading this book at the library as a kid, and for years afterwards I wondered if I had just hallucinated the whole thing.
I think it's a really important scene, and I'm sad that it was cut from the movie.
Side note: the (extremely well-done) Star Wars Radio Drama [0] included a great many expanded scenes on Tattoine (with quite a bit of expansoin on Tosche Station), and I think those scenes (which include the aforementioned scene with Biggs) really add to the richness and flavor of the setting.
If you're a fan of Star Wars and haven't yet listened to the radio drama, I highly recommend it!