Tea exemption eligibility through agents accepted where notification did not require direct purchase from growers.

The exemption under Notification No. 41/95-C.E. was held not to be denied merely because tea leaves were purchased through agents, where the notification required purchase of not less than two-thirds of green leaf from growers with holdings not exceeding 10 hectares and did not insist on direct purchase. Receipts issued by the growers in the appellants' names, along with payment by the appellants, supported prima facie compliance with the notification conditions. As the remaining eligibility requirements were not in dispute, the appellants established a strong prima facie case for waiver of pre-deposit and stay of recovery.

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Issues: Whether the appellants made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the duty and penalty demand, and whether the exemption under Notification No. 41/95-C.E. dated 26-11-99 could be denied merely because the tea leaves were purchased through agents rather than by direct purchase from growers.

Analysis: The condition in the notification required that not less than two-thirds of the green leaf be purchased from growers having tea cultivation holdings not exceeding 10 hectares, and it did not state that such purchase must be direct. The records showed receipts issued by the growers in the appellants' name, indicating that payments for the leaves were made by the appellants. Since the other eligibility conditions were also not in dispute, the objection based only on purchase through agents did not displace the appellants' prima facie entitlement to the notification benefit.

Conclusion: The appellants were held to have a strong prima facie case, and waiver of pre-deposit with stay of recovery was granted in their favour.

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