1991 (7) TMI 194 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff, Seizure of goods, Imposition of penalties

Classification of Goods under Central Excise Tariff:
The case involved the classification of 'package tea' under Tariff Item 3(2) of the Central Excise Tariff. The respondents were manufacturing 'package tea' without the required Central Excise License. The Department seized quantities of package tea and imposed penalties. The Collector (Appeals) allowed the appeals, stating that mere packaging of loose tea does not constitute 'manufacture' under the Central Excises and Salt Act, 1944. The Revenue appealed against this decision. The Tribunal referred to the judgment in Brooke Bond India Limited case, which held that package tea is a separate excisable item, subject to duty. The Tribunal upheld the classification of package tea under Tariff Item 3(2) based on this precedent.

Seizure of Goods and Imposition of Penalties:
Apart from the classification issue, the case also involved the seizure of goods and imposition of penalties for manufacturing package tea without the necessary license. The Superintendent had imposed penalties and ordered confiscation of seized goods. The Tribunal considered that at the relevant time, the excisability of the goods was uncertain. Thus, it gave the benefit of doubt to the respondents regarding the confiscation and penalties. Consequently, the Tribunal set aside the confiscation and penalties in all four cases related to seizure and penalties, rejecting the appeals filed by the Revenue.

Conclusion:
The Tribunal allowed the appeals related to the classification of goods under Tariff Item 3(2) as package tea, following the precedent set in the Brooke Bond India Limited case. However, it rejected the appeals concerning the seizure of goods and imposition of penalties, giving the benefit of doubt to the respondents due to uncertainty regarding the excisability of the goods at the relevant time. The decision provided consequential relief to the respondents based on these findings.