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2014 (3) TMI 449 - AT - Central ExciseLevy of Cess - Tea Act, 1953 - Whether cess is payable on export under-bond - Held that - Tribunal in the case of Hindustan Lever Ltd. (2009 (9) TMI 402 - CESTAT, NEW DELHI) following the decision of the Hon ble Supreme Court in the case of Union of India and Ors. Vs Ahmedabad Manufacturing and Calico Printing Co. Ltd. - reported 1985 (8) TMI 70 - SUPREME COURT OF INDIA , observed that exemption granted in relation to excise duty under Central Excise Act cannot be extendable in different statutes. No such notification has been placed before the Hon ble court nor it is contended that there is any such notification. Prime facie, we do not find any notification in the instant case for exemption of the cess in respect of export under-bond. We have also noticed the decision of the Hon ble Supreme Court in the case of Tata Tea Ltd., (2002 (5) TMI 235 - SUPREME COURT OF INDIA) has held that cess is liable to be levied under Section 25 of the Tea Act, 1953 and the Hon ble court answered the question in favour of the Revenue - Conditional stay granted.
Issues Involved:
1. Whether cess is payable on export under-bond in the case of tea manufacturing. Analysis: The judgment by the Appellate Tribunal CESTAT Chennai involved a dispute regarding the payment of cess on export under-bond by tea manufacturers. The applicants, engaged in tea manufacturing, were facing a demand for cess amounting to Rs.6,46,674 along with interest. The key contention revolved around the interpretation of Section 25 of the Tea Act, 1953, which imposes a duty of excise on all tea produced in India. The advocate for the applicants argued that the cess should be considered a duty of excise, citing a Board's Circular and a previous Tribunal's decision granting a stay on the issue. On the other hand, the authorized representative for the respondent contended that the Cess Rule was enacted for the industry's welfare and should not be equated with the duty of excise. Reference was made to a Supreme Court decision in the case of Commissioner of Central Excise, Cochin Vs Tata Tea Ltd., which was supported by a Tribunal decision involving Hindustan Lever Ltd. The Tribunal, after considering both sides' arguments and reviewing the records, referred to the decision in the case of Hindustan Lever Ltd. The Tribunal noted that exemptions related to excise duty under the Central Excise Act cannot be extended to different statutes unless specifically notified. In this case, no such notification for cess exemption in export under-bond was presented. The Tribunal also highlighted the Supreme Court's decision in Tata Tea Ltd., affirming that cess is liable to be levied under Section 25 of the Tea Act, 1953. Consequently, the Tribunal directed the applicants to deposit Rs.2 lakhs within four weeks, following which the balance amount of cess along with interest would be waived, and recovery stayed pending the appeal's disposal. The compliance was to be reported by a specified date, ensuring a fair resolution to the dispute.
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