Custom, Excise & Service Tax Tribunal
Cce, Coimbatore vs Jayashree Tea & Indus. Ltd on 7 May, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/519 to 522/2001
(Arising out of Order-in-Appeal Nos. 8, 10-16/2001 (CBE) (GVN) dated 22.01.2001 passed by the Commissioner of Central Excise (Appeals), Trichy)
For approval and signature
Honble P. G.CHACKO, Member (Judicial)
Honble P.KARTHIKEYAN, Member (Technical).
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CCE, Coimbatore : Appellants
Vs.
1. Jayashree Tea & Indus. Ltd. : Respondents
2. Manjushree Tea Plantations Ltd:
3. Silver Cloud Tea Factory
4. Manjushree Tea Plantations Ltd.:
Appearance Shri B.L. Meena, SDR, for the appellants None appeared for (E/519/01) Shri T.V. Suresh Kumar, Adv.(E/520/01 & E522/01) Shri B. Ramkumar, Con. (E/521/01), for the respondents CORAM Shri P.G. CHACKO, Member (Judicial) Shri P. KARTHIKEYAN, Member (Technical) Date of hearing : 07.05.08 Date of decision : 07.05.08 Final ORDER No.________/2008 Per P. KARTHIKEYAN The captioned appeals filed by the revenue challenge the orders impugned which had vacated the demands for cess on package tea cleared during the period 02.06.98 to 31.10.99. The original authority had held that Notification No. 1086 (E) dated 11.11.99 had clarified that cess was not payable a second time if the same tea had suffered cess at an earlier stage (in another form). He held that as the Notification did not have retrospective effect, levy of cess a second time was waived only with effect from 11.11.99. Therefore, package tea manufactured during the material time from cess paid bulk tea had to discharge tea cess.
2. In the impugned order the Commissioner held that the levy of cess is not linked to the process of manufacture. Even if conversion of bulk tea into package tea constituted manufacture, cess did not have to be paid again if cess had been paid on bulk tea. The cess on tea was payable only once. In respect of units in no Commissionerate except Coimbatore Commissionerate cess was demanded for a second time. This amounted to discrimination. Accordingly, he dropped the demands.
3. In the appeal filed by the revenue, the sole ground take is that Notification No. 1086(E) dated 11.11.99, is prospective and the Commissioner had not given his reading of the notification while vacating the orders of the original authority.
4. The respondents rely on the decision of the Tribunal in Bombay Burmah Trading Corporation. Ltd., Vs. CCE, Trichy reported in 2005 (187) ELT 247 (Tri.-Chen). In the above decision, the Tribunal held that cess on tea was a one time levy at the stage of production from tea leaves. This was the settled position as per para-6 of the judgment of the Apex Court in the case of CCE Vs. Tata Tea Ltd. reported in 2002 (142) ELT 3 (S.C.) reproduced below.
6. In order to satisfy the definition of tea under Section 3(n), a product be commercially known as tea and it should be made from the leaves of the plant of Camellia Sinensis (L) O. Kuntze. Instant tea satisfies both these conditions By the very name, the product namely instant tea conveys that it is a tea. The term instant tea is not the brand name of the product manufactured by the assessee but the name of the product itself. It is a variety of tea. Further, the term instant tea gives a meaning that it is a tea, which can be prepared/used instantaneously. Merely because the product is known as instant tea, it does not cease to be known commercially as tea. Whether tea is consumed as hot beverage or a cold beverage depending upon ones liking and taste, it does not make any difference in deciding whether it is a tea falling within the definition of Section 3(n) of the Act. In our view, the manner of preparation of tea and the process of manufacture of instant tea powder cannot take away instant tea out of definition of tea under the Act Ultimately instant tea is produced from the leaves of the plant Camellia Sinensis (L) O. Kuntze. In these circumstances the instant tea is covered by the definition of tea within the meaning of Section 3(n). Once instant tea falls within the definition of Section 3(n), a cess can be levied on it under Section 25 of the Act. In our view, the Commissioner (Appeals) was right in upholding the order of the Assistant Commissioner but the Tribunal went wrong in holding that instant tea is different from tea and it fell outside the scope of Section 3(n) of the Act referring to Prevention of Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959. When the Act defined tea specifically, the Tribunal ought not to have strained itself by referring to other enactments to construe instant tea as the product not included within the definition of tea under the Act.
It was also held that the orders impugned were based on the exemption notification dated 11.11.99 and could not be sustained. Where levy was not contemplated by statute, issuance of an exemption notification for a particular period could not be taken as changing the scope of levy of previous period. Following the ratio of the above decision, we affirm the impugned orders and dismiss the appeals filed by the Revenue. (Operative part of the order dictated and pronounced in open Court on 07.05.08) (P.KARTHIKEYAN) (P.G. CHACKO) MEMBER(T) MEMBER (J) BB 2