Package tea levy failed where loose tea was repacked only for convenience of sale, not marketed as trade-recognised package tea.

Loose tea placed into small packets at the time of sale was not shown to be package tea in the commercial sense, so the alleged manufacture was not established. The department had to prove that the goods were packed and marketed as package tea recognised in trade; the record showed only repacking for convenience of sale and carrying. As the tariff description was not met on the evidence, the excise duty demand was not sustained.

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Issues: Whether loose tea put into small packets at the time of sale amounted to manufacture of package tea and attracted central excise duty.

Analysis: The department had to show that the tea sold was package tea as understood in trade and that the packing was of the kind intended for marketing as a distinct excisable product. The record did not establish that the respondents were selling regular packaged tea. The evidence indicated that loose tea was put into small covers only for convenience of sale and carrying, and there was no proof that the packets were marketed as package tea recognized in the trade. In the absence of evidence showing that the goods were packed in a form answering the tariff description in a commercial sense, the allegation of manufacture was not proved.

Conclusion: The issue is answered in favour of the assessee. Loose tea repacked at the time of sale for convenience did not, on the evidence, amount to manufacture of package tea liable to duty.

Final Conclusion: The Revenue failed to discharge the burden of proving that the goods sold were package tea, and the duty demand was not sustained.

Ratio Decidendi: To bring tea within the levy as package tea, the department must prove that it was packed and marketed as package tea recognized in trade, not merely placed in small packets for convenience of sale.

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