2003 (12) TMI 429 - AT - Central Excise

Appellate Tribunal Rules in Favor of Tea Factories on SSI Exemption Criteria

The Appellate Tribunal CESTAT, CHENNAI allowed the appeals of M/s. Nelliyalam Tea Factory and M/s. Lawson Tea Factory, ruling in their favor regarding the ... Tea put up in tea chests or gunny bags Issues:- Interpretation of SSI exemption under tariff heading 0903.90 for tea not put up in unit containers with a brand name.Analysis:The judgment delivered by the Appellate Tribunal CESTAT, CHENNAI pertains to two appeals by M/s. Nelliyalam Tea Factory and M/s. Lawson Tea Factory challenging Order-in-Appeal No. 172/2002 and 174/2002, respectively, regarding the SSI exemption for tea under tariff heading 0903.90. The Commissioner (Appeals) allowed the SSI exemption up to Rs. 50.00 lakhs but demanded duty for clearances exceeding this value. The appellant-assessee, represented by Consultant Shri S. Kandasamy, argued that they did not claim the SSI exemption granted by the Commissioner (Appeals). They contended that tea falling under the tariff heading with NIL rate of duty should not be considered as put up in unit containers with a brand name. The appellant relied on a judgment by the Eastern Zonal Bench and a decision by the Hon'ble High Court of Guwahati, both supporting the non-liability of duty for bulk tea not in unit containers with brand names during a specific period.The Tribunal considered the arguments and cited the judgments mentioned by the appellant. They found in favor of the appellant-assessee based on the decisions of the Hon'ble High Court of Guwahati and the Eastern Zonal Bench. The Tribunal held that tea stored in tea chests or gunny bags exceeding 20 kgs and bearing the company's name/mark does not fall under the definition of tea put up in unit containers with brand names. Consequently, such tea is not liable to duty for the relevant period specified. Therefore, the appeals were allowed, and the appellant-assessees were not required to pay duty for the mentioned period.This judgment clarifies the interpretation of the SSI exemption for tea under a specific tariff heading, emphasizing the criteria of tea not being put up in unit containers with brand names to be eligible for the exemption. The reliance on previous judicial decisions highlights the importance of legal precedents in determining the liability of duty in excise matters. The Tribunal's adherence to established judgments underscores the consistency and predictability necessary in legal interpretations within the excise framework.