2004 (12) TMI 432 - AT - Central Excise

Summary

Issues:
1. Interpretation of Section 25 of the Tea Act, 1953 regarding cess on processed tea.
2. Applicability of exemption by the Central Government on stages of tea powder manufacture.
3. Comparison with a decision of the Tribunal's Larger Bench in a similar case under the Jute Manufacturers Cess Act, 1983.

Analysis:
1. The case involved a demand of cess on Black Tea and Re-processed Tea Rejects cleared by the appellants from their tea factories under Section 25 of the Tea Act, 1953. The appellants argued that cess is payable only on tea produced by estates or gardens, not on goods arising from tea processing. The Tribunal examined the proviso to Section 25(1) and found merit in the appellant's contention, granting waiver of pre-deposit and stay of recovery based on the strong case presented.

2. The Respondent, citing exemption by the Central Government on various stages of tea powder manufacture from cess levy, argued that such exemption implied prior exigibility to the levy. However, the Tribunal noted no similar provision under the Jute Act was presented to support this argument. The Tribunal, considering the prima facie case, upheld the appellant's position based on the specific provision in the Tea Act regarding cess applicability.

3. The Respondent relied on a decision from the Tribunal's Larger Bench in a case under the Jute Manufacturers Cess Act, 1983, where hessian bags made from cess-paid jute fabric were held liable to cess. Despite this precedent, the Tribunal distinguished the present case by emphasizing the unique provisions of the Tea Act and the absence of comparable provisions from the Jute Act. This distinction led to the Tribunal's decision in favor of the appellants, granting relief from the cess demand on processed or re-processed tea.