2015 (9) TMI 879 - HC - Central Excise

Exemption from levy of excise duty - additional excise duty - tea purchased from small growers whose holding is less than 10-hectre - notification(no 13/2003) dated 1st March, 2003 - Held that - Order is an appealable order. It is further stated that the order of the DC cannot be relied on in this Court as the order had no persuasive value in law. It is stated that the order of the AC is sound and proper - order of the AC for insisting land documents of the small grower is sound and proper. When the basic proof of status of the small grower is not produced the petitioner would not be entitled to any exemption. However in the interests of justice we remand the matter to the AC for a fresh consideration by providing an opportunity to the petitioner to produce the land documents of the seller to substantiate that the seller is a small grower with a land holding less than 10-hectre. - Petition disposed of.

Issues:
1. Whether the petitioner is entitled to exemption from additional excise duty for tea purchased from small growers.
2. Validity of the order of the Assistant Commissioner rejecting the exemption claim.
3. Consideration of equity in granting exemption.
4. Appealability of the order.
5. Reliability of the Deputy Commissioner's order.

Analysis:

1. The main issue in this case is whether the petitioner is entitled to exemption from additional excise duty for tea purchased from small growers with a land holding less than 10-hectare. The exemption is provided under item 5 of notification no. 13/2003 dated 1st March, 2003. The Assistant Commissioner rejected the petitioner's claim as they failed to produce documents proving the seller's status as a small grower. The petitioner argued that in previous assessments, the appellate authority allowed the exemption on the grounds of equity. The High Court found that without proof of the seller's status, the petitioner cannot claim exemption. However, to ensure justice, the matter was remanded for the petitioner to provide the required documents.

2. The validity of the Assistant Commissioner's order, which insisted on land documents of the small grower for exemption, was challenged by the petitioner. The Court found the order to be sound and proper as the basic proof of the small grower's status was not provided. The Court emphasized the importance of substantiating the seller's status to claim exemption from excise duty.

3. The concept of equity was raised concerning the exemption claim. The petitioner argued that in similar cases, the Deputy Commissioner allowed exemptions based on equity. The High Court acknowledged the importance of equity but emphasized the necessity of complying with the legal requirements. The Court remanded the matter for fresh consideration while considering the principles of justice.

4. The issue of appealability of the Assistant Commissioner's order was raised by the department. The Court noted that the order was appealable but focused on the substantive issue of providing necessary documents for claiming exemption rather than the procedural aspect of appeal.

5. The reliability of the Deputy Commissioner's order in granting exemptions based on equity was discussed. The Court recognized the persuasive value of the Deputy Commissioner's decision but ultimately based its judgment on the legal requirement of proving the seller's status as a small grower for claiming exemption.

In conclusion, the High Court remanded the matter for fresh consideration by the Assistant Commissioner to allow the petitioner to provide the required documents to substantiate the seller's status as a small grower. The judgment highlighted the importance of adhering to legal requirements while also considering principles of equity in tax matters.

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