1997 (3) TMI 225 - AT - Central Excise

Summary

Issues:
Appeal against dropping proceedings for selling packed tea. Interpretation of tariff definitions. Determination of whether loose tea in small packets constitutes package tea. Burden of proof on department to show tea sold was recognized as package tea in trade.

Analysis:
The appeal was filed against the lower authority's decision to drop proceedings regarding the sale of packed tea due to lack of evidence supporting the charge. The appellant argued that investigations established the sale of package tea falling under specific tariff items. The Collector of Central Excise failed to consider the definition of package tea and a relevant court decision supporting the levy of excise duty on package tea produced from tea already manufactured. The department contended that the tea sold by the respondents, a partnership firm, was labeled with the company name and specific weights, falling within the parameters of package tea as per the tariff. The nature of packing was not clearly defined by the department, but it was argued that the tea was packed by weight in covers bearing the firm's name and weight information. The respondents' counsel countered by stating that the tea was sold in loose form, with packing done only for handling convenience, not as package tea. Reference was made to a court ruling emphasizing that the net weight of tea, not the container, determines excisability. The Tribunal examined the arguments and evidence presented. It was noted that there was no proof that the respondents were selling regular packaged tea. The crucial question was whether loose tea in small packets constituted package tea. The Tribunal emphasized that for tea to be considered package tea, it must be recognized as such by those in the trade. As the burden of proof was on the department to establish that the tea sold was recognized as package tea, and this burden was not met, the Tribunal gave the benefit of doubt to the respondents and dismissed the appeal of the Revenue.