of Central Excise, Vs. M/S. TATA Tea Ltd.  Insc 251 (5 May 2002)
Hegde & Shivaraj V. Patil Shivaraj V. Patil, J.
short question that arises for consideration is whether `instant tea'
manufactured and exported by the respondent is liable for levy of cess under
Section 25 of the Tea Act, 1953.
respondent is engaged in the manufacture of `instant tea'. Show cause notices
were issued to the respondent as to why on `instant tea' cleared by them during
the given period, cess should not be levied under Section 25 of the Tea Act,
1953 (for short the Act). The reply of the respondent was that `instant tea'
was not `tea' falling within the definition of Section 3(n) of the Act and that
the show cause notices issued were patently illegal. The Assistant Commissioner
confirmed the demand. The respondent filed appeal to the Commissioner
(Appeals), Cochin, who upheld the order of the
Assistant Commissioner. The respondent took up the matter before the CEGAT
which set aside the order of the Commissioner (Appeals) taking a view that
`instant tea' cannot be considered as `tea' within the meaning of Section 3(n)
of the Act.
these appeals by the revenue.
learned Attorney General urged on behalf of the appellant that the term `tea'
for levy of cess has to be interpreted on the basis of the definition of `tea'
given in the Act and not on the basis of definitions given in the Prevention of
Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959; `instant
tea' is a variety of tea and it is commercially known and sold in the market as
`instant tea'; there was no further need to go into the manner of manufacture
and preparation of `instant tea'; the Tribunal misdirected itself in concluding
that `instant tea' is not `tea' by referring to other enactments. According to
him, manner of preparing tea and whether it is consumed in hot or cold form, is
immaterial in deciding whether `instant tea' attracted cess under the Act.
Anil B. Diwan, learned senior counsel, appearing on behalf of the respondent,
made submissions supporting the impugned order of the Tribunal for the very
reasons stated in the order emphasizing that `instant tea' when mixed in cold
water, it gets completely dissolved and it is taken instantly; it is not mixed
with hot water to get extract of tea decoction. The learned senior counsel
further contended that `instant tea' has a different identity and it is
differently known in the market and hence it does not fall within the
definition of 'tea' under the Act.
order to appreciate the rival contentions and to record an answer to the
question raised in the beginning, it is useful to notice the relevant
provisions of the Act, which are extracted below:- "S. 3(n) -
"tea" means the plant Camellia Sinensis (L) O. Kuntze as well as all
varieties of the product known commercially as tea made from the leaves of the
plant Camellia Sinensis (L) O. Kuntze including green tea." "S. 25
Imposition of cess on tea produced in India - (1) There shall be levied and
collected as a cess for the purposes of this Act a duty of excise on all tea
produced in India at such rate not exceeding fifty paise per kilogram as the
Central Government may, by notification in the Official Gazette, fix;
that different rates may be fixed for different varieties or grades of tea
having regard to the location of, and the climatic conditions prevailing in,
the tea estates or gardens producing such varieties or grades of tea and any
other circumstances applicable to such production.
duty of excise levied under sub- section (1) shall be in addition to the duty
of excise leviable on tea under the Central Excises and Salt Act, 1944, or any
other law for the time being in force.
provisions of the Central Excises and Salt Act, 1944, and the rules made thereunder,
including those relating to refund the exemption from duty, shall so far as may
be, apply in relation to the levy and collection of the duty of excise under
this section as they apply in relation to the levy and collection of the duty
of excise on tea under the said Act." [emphasis supplied] 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. It is a variety of tea.
the term `instant tea' gives a meaning that it is a `tea', which can be
because the product is known as `instant tea', it does not cease to be known
commercially as `tea`.
tea is consumed as hot beverage or a cold beverage depending upon one's liking
and taste, it does not make any difference in deciding whether it is a tea
falling within the definition of Section 3(n) of the Act. In our view, the
manner of preparation of tea and the process of manufacture of `instant tea'
powder cannot take away `instant tea' out of definition of 'tea' under the Act.
Ultimately `instant tea' is produced from the leaves of the plant Camellia Sinensis
(L) O. Kuntze. In these circumstances, 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.
is stated above, we answer the question in the affirmative and in favour of the
the order under challenge cannot be sustained. Hence, the same is set aside.
The appeals are allowed. No costs.
SANTOSH HEGDE ] .......................J.
V. PATIL ] May 02, 2002.