1998 (2) TMI 218 - AT - Customs

Summary

Issues:
1. Whether tea cess is leviable on tea waste cleared for the manufacture of instant tea meant for export.
2. Whether the definition of tea under the Tea Act, 1953 includes tea waste.
3. Whether any notification under Rule 191B of the Central Excise Rules, 1944 permits clearance of tea waste without payment of cess.
4. Whether the Central Excise duty is payable on tea waste sent for the manufacture of instant tea.

Analysis:
The appeals were filed by the Revenue challenging the Order-in-Appeal passed by the Collector of Central Excise, Madras, which held that tea cess is not leviable on tea waste. The Revenue contended that cess is applicable on tea waste cleared for instant tea production for export, as it is not exempted under the Central Excise Rules, 1944. The definition of tea under the Tea Act, 1953 was emphasized, stating that it includes tea waste. The absence of a specific notification permitting clearance of tea waste without cess payment was highlighted, asserting that cess is payable on tea waste even if cleared without Central Excise Duty payment.

The Respondent's Counsel argued that the Tea Act, 1953 imposes cess only on tea, not on tea waste. Referring to the Commissioner of Central Excise's order and Ministry of Commerce instructions, it was contended that tea waste is not included in the definition of tea under the Tea Act, thus not subject to cess. The Board's instructions further supported this stance, clarifying that no cess is to be collected on tea waste as defined in the Tea Act, 1953.

The core issue was whether tea cess under the Tea Act, 1953 is applicable to tea waste. The respondents were engaged in black tea manufacturing, with waste classified under a specific Central Excise Tariff sub-heading. The exemption from Central Excise duty for denatured waste and the duty payment for waste used in instant tea production were outlined. The Commissioner concluded that tea waste is not covered in the definition of tea under the Tea Act, supported by Ministry of Commerce and Board instructions, which explicitly stated that no cess is leviable on tea waste as defined in the Tea Act, 1953.

The judgment upheld the Commissioner's decision, dismissing the Revenue's appeals. It was determined that tea waste is not subject to cess under the Tea Act, 1953, based on the legislative provisions and official instructions provided by the Ministry of Commerce and the Central Board of Excise & Customs. The absence of any infirmity in the impugned orders led to the dismissal of the Revenue's appeals.