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2002 Supreme(Gau) 374
GAUHATI HIGH COURT
J.N.Sarma, J.
Duken Hengra Tea Pvt.Ltd. -Appellant
Versus
Union of India -Respondent
W.P (C) Nos. 238, 239 and 3945 of 2002
Decided On : 04-09-2002
Y.S.Mannan, S.Sharma, S.Senapati, S.N.Sharma, S.Kejriwal, S.K.Kejriwal, R.K.Joshi, N.Talukdar, R.Gogoi, D.Barua, B.C.Goswam, A.Thakur, A.K.Panja, A.K.Goswami, G.N.Sahewalla, H.Roy, A.Ajit Saria, M.Hazarika, N.Tagia, N.Chakraborty, N.C.Deb Nath, Md.Aslam, M.Rajkumari, G.K.Joshi, M.P.Kejriwal, P.Bora, K.D.Chetri, J.Sharma, J.M.Barman, I.Gohain, H.Sharma, M.R.Barua
Headnote:
CENTRAL EXCISE - Levy of duty on tea - Tea put up in unit container with brand name - Whether tea removed in tea chests or gunny bags with the name of the garden, name of the product, name of the kinds of tea can be said to be 'tea put up in unit container with a brand name' - Held, no - Tea removed in tea chests or gunny bags with the name of the garden, name of the product, name of the kinds of tea cannot be said to be 'tea put up in unit container with a brand name' - The word 'brand' name must be given a qualified meaning to include only package tea with such qualified meaning because of the following: (i) As understood in the ordinary course of trade and business; (ii) Legislative history; (iii) Finance Minister's speech referring to package tea only; (iv) As understood in the trade and business circle because of the various representations made by the two tea associations.
Fact of the Case:
Petitioners carry on business of producing, manufacturing and selling tea. Petitioners remove tea in bulk in chests or gunny bags containing 20 Kgs. or more. Petitioners challenge the levy and/or collection of duty on bulk tea removed/sold in the above way (20 Kg. and above) for the period from June 2, 1998 to June 23, 1998. The basic contention is that the tea manufactured in tea estate cannot be sold in loose form. It is to be removed either in small packages or in gunny bags containing 20 Kg or more and for the purpose of identification, in the gunny bags or in tea chest, names of the garden only is written and it is not a brand name. This is done only for the purpose of facilitating transportation so that the same are not mixed up with other tea and/or goods sent in the same truck or in the warehouse. The package tea with brand name stands on a different footing.
Finding of the Court:
The court held that there was no tax in the parent Act on tea removed in the manner. It was Nil/above in bulk tea removed in tea chests and gunny bags and it does not come under the definition of "tea put up in unit container with a brand name". As such, the letter dated 13.10.98 (Annexure-G) issued by the Ministry of Commerce is erroneous and the same shall stand quashed. It is not the correct interpretation of the statute. In view of it, all the show cause notices issued by the authority shall stand quashed as bulk tea removed in unit container like tea chests, gunny bags etc. were not liable for taxation as it will come in the category of 'others'. The exemption notification issued on 24.6.1998 is really not an exemption notification and there was no necessity to issue such a notification and there was no tax on bulk tea removed in container like tea chest and gunny bags etc. It is also to be noted that the examination notification which has been issued is absolutely irrelevant in view of the decision arrived at in this case that there was no tax on tea removed/sold in tea chest and gunny bags etc. by the garden. As there was no tax on such things, the question of granting exemption does not arise and it is in view of that matter, the exemption notification also would not be applicable in connection with tea removed in tea chest and gunny bags as such removal as held earlier does not come within the subject matter of tax i.e. 'tea put up in unit container with a brand name'. This can be ignored.
Issues: Whether tea removed in tea chests or gunny bags with the name of the garden, name of the product, name of the kinds of tea can be said to be 'tea put up in unit container with a brand name'.
Ratio Decidendi: The court held that the word 'brand' name must be given a qualified meaning to include only package tea with such qualified meaning because of the following: (i) As understood in the ordinary course of trade and business; (ii) Legislative history; (iii) Finance Minister's speech referring to package tea only; (iv) As understood in the trade and business circle because of the various representations made by the two tea associations.
Final Decision: All the writ applications are allowed to the extent as indicated above.
2. These writ applications have been filled basically with the following prayers:
i) for a declaration that there is no levy of any Central Excise duty on tea in unit containers of 20 Kgs. or more; alternatively a declaration that there is no levy of excise duty on bulk tea removed in unit containers of tea chests or the like containing more than 20 Kgs. of tea;
ii) for a declaration that the order/direction dtd. 13th October, 1998 is illegal, ultra vires and void;
iii) the impugned show cause notice of different dates issued in the month of November, 1998 being different annexures to different writ application (Annexure-H to WP(C) 3088/99) are illegal, ultra vires and void;
iv) for a declaration to withdraw the show cause notices issued by the authority.
3. The order/letter dated 13th October, 1998 issued by the Director, Ministry of Commerce is annexure-G to WP(C) No. 3088/99) (this is the common order in all the writ applications, but the annexure number may be different) and that Annexure-G is quoted below :
"ANNEXURE - G
FAX MESSAGE
From : Bharat Bhusan Signature
Director Fax No.
Ministry of Commerce 033-2215715
Page No. One
Dated 13.10.1998
To
1. Shri SS Ahuja Tea Board Calcutta
2. Shri VK Goenka Chairman
Indian Tea Association Calcutta.
File No. T-29012/1/98-Plant (A)
I am directed to refer to the representation on the subject exemption of Excise Duty on bulk tea traded during the period 2.6.98 to 24.6.98. The matter was taken up with the Ministry of Finance who has observed that the exemption on tea packed in unit containers containing more than 20 Kgs. is applicable from the date of issue of notification. The exemption notification is prospective in nature and instructions to this effect has already been issued to the field formations by the CBEC."
4. The relevant portion of the impugned show cause notice is quoted below:
ANNEXURE-H
"Consequently, duty has become liable on all tea falling under sub-heading 0902.10 of heading 09.20 when packed in any unit container and bearing a brand name irrespective of the quantity for the period from 2.6.98 to 23.6.98 @ 8% Advalorem vide clause 115 of the Finance Bill (No.2) 1998, under the provisional collection of Taxes Act, 1931."
So, one is liable to pay tax when tea is put up in unit containers and bears a brand name. Emphasis laid on it as it will have a bearing on the decision of the writ applications.
5. I have heard Mr. Samaraditya Pal, learned Senior counsel and other advocate in different writ applications and Mr. Bipul Sarma, learned Addl. CGSC for Union of India & Ors. An affidavit in opposition has been filed on behalf of the respondents.
6. The validity of the impugned show cause notice is basically challenged on the ground that the respondents Central Excise authorities have no power and/or authority to levy Excise duty on the tea removed by the petitioners in unit containers of 20 Kg. and more as it does not have a brand name and further more, the impugned show cause notice is wholly without jurisdiction and without authority of law. and in violation of law inasmuch as in the parent/ main Act itself, there was no levy of excise duty on such tea removed in tea chests or gunny bags as it does not have a brand name as required under the statute.
7. The facts of the cases, in brief, are as follows:
Petitioners carry on business of producing, manufacturing and selling tea. Petitioners remove tea in bulk in chests or gunny bags containing 20 Kgs. or more. Petitioners challenge the levy and/or collection of duty on bulk tea removed/sold in the above way (20 Kg. and above) for the period from June 2, 1998 to June 23, 1998. The basic contention is that the te
