Court rules cess on package tea production is one-time levy. Appeals dismissed as discriminatory.

The court affirmed the original authority's decision that cess on package tea is a one-time levy at the production stage and cannot be demanded multiple times. The notification exempting cess for a second time was found to be prospective and could not alter the levy for a previous period. The appeals filed by the Revenue challenging the waiver of cess demands were dismissed, holding that demanding cess for a second time in units under different Commissionerates was discriminatory.

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Issues:
1. Interpretation of Notification No. 1086(E) dated 11-11-1999 regarding cess on package tea.
2. Whether cess on tea is a one-time levy or payable multiple times.
3. Discrimination in demanding cess for a second time in units under different Commissionerates.
4. Prospective nature of Notification No. 1086(E) dated 11-11-1999.

Analysis:
1. The appeals filed by the revenue challenged the orders vacating demands for cess on package tea cleared from 2-6-1998 to 31-10-1999. The original authority held that cess was not payable a second time if the tea had already suffered cess at an earlier stage, based on Notification No. 1086(E) dated 11-11-1999. The levy of cess a second time was waived only from 11-11-1999, and package tea manufactured during the material time had to discharge tea cess.

2. The Commissioner in the impugned order stated that the levy of cess is not linked to the process of manufacture. Even if conversion of bulk tea into package tea constituted manufacture, cess did not have to be paid again if it was already paid on bulk tea. The cess on tea was considered payable only once, and demanding it for a second time in units under different Commissionerates was seen as discriminatory. Consequently, the demands were dropped.

3. The sole ground in the appeal by the revenue was the prospective nature of Notification No. 1086(E) dated 11-11-1999. The Commissioner vacated the original authority's orders without providing his interpretation of the notification, leading to a challenge by the revenue.

4. Relying on a previous Tribunal decision, it was established that cess on tea is a one-time levy at the production stage from tea leaves. The Tribunal referred to a judgment of the Apex Court to support this position. It was held that the exemption notification dated 11-11-1999, forming the basis of the impugned orders, could not change the scope of levy for a previous period where the statute did not contemplate the levy. Following this precedent, the impugned orders were affirmed, and the appeals filed by the Revenue were dismissed.

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