ORDER
V.P. Gulati, Vice President
1. These appeals have been filed against the order of the lower authority under which he has dropped proceedings against the respondents for the reason that the evidence did not support the charge that the appellants have sold packed tea. In the grounds of appeal, the following has been urged :
(2) Collector of Central Excise, Bangalore failed to appreciate that the investigations carried out clearly established that M/s. Prakash Tea Agency had manufactured and cleared “package tea” falling under Tariff Item No. 3 of the erstwhile Central Excise Tariff and Chapter 9 of the schedule to the Central Excise Tariff Act, 1985.
(3) Collector of Central Excise, Bangalore also failed to observe that Chapter Note 2 to Chapter 9 clarifies that “for the purpose of Heading 09.02, blending, sorting, packing or repacking into smaller containers shall amount to manufacture”.
(4) Collector of Central Excise, Bangalore failed to take note of the decision of the Hon’ble High Court of Calcutta, in the case of Brooke Bond India Ltd. and Anr. v. Union of India and Ors., reported in 1988 (34) E.L.T. 590 (Cal.), wherein it was held that levy of excise duty on package tea produced out of tea already manufactured in gardens is valid and such package Tea is a separate and specific excisable item.
2. The learned SDR for the department has pleaded that the respondents are partnership firm and they themselves have admitted that they made retail sale of tea in packets which bore the respondents’ company name and also tea was sold in certain specific weight i.e. 100 gms., 250 gms., 500 gms., 1 kg. and 2 kg. etc. He has pleaded that tea was sold in cover which carried the name of the respondents and the tea sold by the respondent was by specific weight and therefore, the same can be taken to have acquired the definition as set out for package tea. In this connection he referred us to the definition of package tea as set out in the tariff which reads as under :
Package tea, that is to say, tea packed in any kind of container containing not more than 27 kg. net of tea but excluding “Instant tea”.
In the new tariff for tea the following is set out :
0902.11- Packed in unit containers of content 44 paise per kilogram
not exceeding 25 grams and plus the duty for the
ordinarily intended for sale to time being leviable
consumers in that pack under sub-heading
0902.19
0902.12- Packed in unit containers of content Rs. 1.10 per kilogram
exceeding 25 grams but not plus the duty for the
exceeding 20 kilograms, whether or time being leviable
not ordinarily intended for sale to under sub-heading
consumers in that pack 0902.19
He has pleaded that tea was packed by weight in covers and the weight parameters fell within the limits laid down for package tea in the tariff. He pleaded that the respondents, therefore, can be taken to have manufactured package tea. As to the nature of the packing, the learned SDR could not enlighten us except saying that the respondents get paper cover made out for specified weight and the specific address of the firm. The pre-determined weight of the tea was put in the respondents’ cover carrying the weight of the packet. He in this context pleaded that the duty has been rightly demanded and the lower authority was in error in having ignored this fact.
3. The learned Counsel for the respondents has pleaded that there is no plea from the department that tea as sold by the respondents was recognised in the trade as package tea. He has pleaded that the respondents were dealing in loose tea and packing the tea in pre-determined weight for sale was done at the time of sale to new customers. The nature of the packing was such that it could be considered as sale of tea in loose form. Packing was done only for convenience of handling and not for selling the tea as such as package tea. In this context the learned Counsel drew our attention to the Division bench ruling of Madhya Pradesh High Court in the case of Keshaodeo Shivprasad v. UOI reported in 1992 (61) E.L.T. 404 (MP). Para 9 of the said judgment is reproduced below:
9. It will thus be seen that sugar, confectionary, preserved foods, food products, aerated waters, glucose and dextrose, maida, coffee and tea all are covered by the description of goods, namely ‘food’. The excisable goods are, therefore, the foodstuffs enumerated in Items Nos. 1 to 3. Can it be said that the package in which tea is contained, is a food, thereby becoming an excisable goods? The answer must clearly be in the negative. Furthermore, it will be found from Item No. 3 itself that tea has been mentioned as including all varieties of the product known commercially as tea including ‘green tea’ and ‘instant tea’. Package of any sort cannot be impressed within the term varieties of the product known commercially as tea including green tea and instant tea. To crown it all, in sub-item (2) of Item No. 3 where package tea is dealt with, it is described as package tea, that is to say, tea packed in any kind of container containing not more than 27 Kg. net of tea. (underlining is ours for the sake of emphasis). It is, therefore, the net weight of the tea over which excise duty is leviable and not the product in which such tea is contained. Therefore, sufficient intrinsic evidence in the first schedule itself reinforces our conclusion that package of any sort or a container containing tea cannot be an excisable good in the first schedule to the Act. As a matter of fact, in this context, it has been said in the Law of Central Excise by V.J. Taraporevala and S.N. Parikh, Second Edition, at page 346, dealing with the decisions on the item that in the context of the provisions of the Act, the phrase ‘all varieties’ occurring in Item No. 3 was interpreted to mean ‘different types of tea which are commercially known to be of different types’. A reference in this connection has been made to the case of Long View Tea Co. v. Collector o/Central Excise – (77) TLR (NOC) 16.
4. We have considered the pleas made by both the sides. We observe that nothing has been brought on record to show that the respondents were selling out regular packaged tea. The question to be answered is in case loose tea is put in different packets for convenience of sale will it amount to manufacture or will it make the tea as package tea. Nothing has been brought on record to controvert the plea that the sale as effected by the respondents to the individuals by putting loose tea in small cover at the time of sale for carrying the tea home. It would have been a different matter in case evidence had been brought on record to show that tea was kept in pre-determined packet condition in packets of the type which can be put in market stream as would bear the rough and tumble of the movement and the packet had enough strength to bear the handling etc. during the course of movement for sale. Before the tea can be taken as package tea, it has to be shown that the tea was package tea as recognised by those who deal in this product as package tea. The burden is on the department to show that what the respondents sold was package tea recognised in the trade. This burden having not been discharged, we hold taking into consideration the evidence on record, that the charge against the respondents has not been proved. In the circumstances we give benefit of doubt to the respondents and dismiss the appeal of the Revenue.