2002 (5) TMI 235 - SC - Central Excise

Whether instant tea manufactured and exported by the respondent is liable for levy of cess under Section 25 of the Tea Act 1953? Held that - In order to satisfy the definition of tea under Section 3(n) a product should be commercially known as tea and it should be made from the leaves of the plant of Camellia Sinensis (L) O. Kuntze. Instant tea satisfies both these conditions. By the very name the product namely instant tea conveys that it is a tea . The term instant tea is not the brand name of the product manufactured by the assessee but the name of the product itself. Thus the instant tea is covered by the definition of tea within the meaning of Section 3(n). Once instant tea falls within the definition of Section 3(n) a cess can be levied on it under Section 25 of the Act. In our view the Commissioner (Appeals) was right in upholding the order of the Assistant Commissioner but the Tribunal went wrong in holding that instant tea is different from tea and it fell outside the scope of Section 3(n) of the Act referring to Prevention of Food Adulteration Rules 1955 and the Tea Waste (Control) Order 1959. When the Act defined tea specifically the Tribunal ought not to have strained itself by referring to other enactments to construe instant tea as the product not included within the definition of tea under the Act.

Summary

Issues:
Whether 'instant tea' manufactured and exported is liable for levy of cess under Section 25 of the Tea Act, 1953.

Analysis:
The respondent, engaged in manufacturing 'instant tea,' received show cause notices regarding the levy of cess under Section 25 of the Tea Act, 1953. The respondent argued that 'instant tea' did not fall under the definition of 'tea' as per Section 3(n) of the Act. The Assistant Commissioner upheld the demand, which was further confirmed by the Commissioner (Appeals). However, the CEGAT set aside the order, stating that 'instant tea' did not qualify as 'tea' under the Act, leading to the Revenue's appeals.

The Attorney General contended that 'instant tea' should be interpreted based on the Act's definition of 'tea' and not on other rules or orders. He argued that 'instant tea' is a variety of tea known and sold commercially, regardless of its manner of preparation or consumption. On the other hand, the respondent's counsel supported the Tribunal's decision, emphasizing that 'instant tea' has a distinct identity and is not prepared like traditional tea, hence not falling under the Act's definition of 'tea.'

The Court examined the relevant provisions of the Act, particularly Section 3(n) defining 'tea' as including all varieties commercially known as tea made from Camellia Sinensis. It was noted that 'instant tea' met these criteria, as the product's name itself indicated it was a type of tea that could be prepared instantly. The Court emphasized that the process of manufacturing 'instant tea' did not exclude it from being classified as 'tea' under the Act. Therefore, the Court held that 'instant tea' fell within the Act's definition of 'tea,' making it liable for cess under Section 25. The Tribunal's decision was deemed incorrect as it referred to other enactments, deviating from the Act's specific definition of 'tea.'

In conclusion, the Court ruled in favor of the Revenue, setting aside the previous order and allowing the appeals without costs.