1998 (5) TMI 186 - AT - Central Excise

Summary

Issues:
- Appeal against the rejection of refund claim of cess paid on tea waste.
- Interpretation of provisions of the Tea Act, 1953 and Central Excise Tariff Act, 1985.
- Consideration of exemption notifications and Circulars issued by the Board.
- Application of Section 11B of the Central Excise Act, 1944 regarding unjust enrichment.

Analysis:
The case involved three appeals by the Revenue against the Collector (Appeals) order allowing the respondent's appeal. The main issue was the rejection of the respondent's refund claim of cess paid on tea waste by the Assistant Collector. The Assistant Collector rejected the claim due to the absence of a separate exemption Notification exempting payment of cess on tea waste cleared by the respondent. The Collector (Appeals) observed that as tea waste is not included in the definition of 'tea' under the Tea Act, 1953, it would not be leviable to cess under Section 25 of the Act. The Collector remanded the matter to the Assistant Collector for verification of the incidence of cess passed to customers and consideration of the refund claim under Section 11B of the Central Excise Act, 1944.

The Revenue contended that tea waste is chargeable to cess as per the Central Excise Tariff Act, 1985, and Circular No. 67/88. The Advocate for the Respondents argued that the definition of tea under the Tea Act, 1953 should be considered, and Circular No. 214/48/96-CX held that no cess should be levied on tea waste. The Tribunal considered the arguments and the Collector (Appeals) observations, emphasizing that tea waste is not covered under the Tea Act's definition of 'tea.' The Tribunal agreed with the Collector (Appeals) reasoning and the Board's Circular of 1996, which clarified that no cess should be calculated on tea waste.

The Tribunal rejected the Revenue's appeals, upholding the impugned orders and remanding the matters to the original adjudicating authority for a fresh decision in light of the amended provisions of Section 11B. The Tribunal concluded that the Circular of 1996, being clarificatory and binding on the department, applied to all pending cases involving the same dispute, in line with the Supreme Court's decision in Ranadey Micronutrients v. Collector of Central Excise.