Double levy of tea cess barred where cess was already paid at the garden stage before blending or packing.

Cess under Section 25 of the Tea Act, 1953 is leviable on tea produced in India, but it cannot be imposed again on the same tea merely because it is later blended or packed. Where cess has already been paid at the garden stage, subsequent blending or packing does not change the tea's nature so as to justify a second levy. The position was treated as settled by precedent and supported by the Board circular intended to prevent double incidence of cess. The demand on blended and packed tea was therefore held unsustainable and was set aside in favour of the assessee.

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Issues: Whether cess under Section 25 of the Tea Act, 1953 is again leviable on blended and packed tea when cess has already been paid at the garden stage.

Analysis: Cess under Section 25 of the Tea Act, 1953 is leviable on tea produced in India. Where cess has already been paid on tea at the garden stage, the subsequent packing or blending does not alter the nature or character of the tea so as to justify a second levy. The position was treated as settled by the relevant precedent and was also supported by the Board circular clarifying that, to avoid double incidence of cess, tea on which cess had already been paid at an earlier stage would not attract cess again.

Conclusion: The demand of cess on blended and packed tea was unsustainable and was set aside in favour of the assessee.

Ratio Decidendi: Cess on tea cannot be levied twice on the same tea merely because it is later blended or packed, if cess has already been paid at an earlier production stage.

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