Exported tea under bond and cess exemption led to complete waiver of pre-deposit and stay of recovery.

Tea exported under bond by Export-Oriented Units was treated as not prima facie liable to cess where a Ministry of Commerce notification under the Tea Act, read with the Central Excise framework, exempted Indian tea exported by EOUs from levy and collection of cess. The CBEC circular of 13-01-2006 also supported the view that goods exported under bond were not liable to cess when the levy was administered through Central Excise procedures. On that combined reading, complete waiver of pre-deposit was considered justified and recovery of the demanded cess was stayed pending the appeal.

---

---

Issues: Whether the appellants were entitled, for purposes of stay, to complete waiver of pre-deposit and stay of recovery of cess demanded on tea exported under bond, in view of the exemption notification and the CBEC circular.

Analysis: The application was considered in the light of the Ministry of Commerce notification issued under Section 25 of the Tea Act, 1953 read with Section 5A of the Central Excise Act, 1944, which exempted tea produced in India and exported by Export-Oriented Units from levy and collection of cess. The CBEC circular of 13-01-2006 was also taken into account, which indicated that goods exported under bond were not liable to cess where the levy and collection mechanism was governed by the Central Excise framework. On a combined reading of the notification and circular, the claim that the exported tea was not prima facie liable to cess was accepted for interim relief.

Conclusion: Complete waiver of pre-deposit was granted and recovery of the demanded cess was stayed pending disposal of the appeal.

---