COMMISSIONER OF CENTRAL EXCISE, COCHIN v. M-S. TATA TEA LTD

Citation: [2002] 3 S.C.R. 730

Court: Supreme Court of India

Bench: N. SANTOSH HEGDE, SHIVARAJ V. PATIL

Judgment text

COMMISSIONER OF CENTRAL EXCISE, COCHIN v. M/S. TATA TEA LTD. MAY2, 2002 - [N. SANTOSH HEGDEAND SHIVARAJ V. PATIL, JJ. ] Tea Act, 1953-Sections 25 and 3(n)-Imposition of cess on tea produced in India- 'Instant tea' manufactured and exported by a tea company-Cess-Levy of-Liability-Held, since 'instant tea' is covered by definition of tea within the meaning of Section 3(n), cess can be levied on it. Interpretation ofStatutes-When Act specifically provides for a definition of a term, there is no need to refer to other enactments. Respondent, engaged in the manufacture of 'instant tea', was issued notices as to why on 'instant tea' cleared by them cess should not be levied under Section 25 ofthe Tea Act, 1953. Respondent submitted that 'instant tea' was not 'tea' falling within the definition of Section 3(n) of the Act and thus the notices were illegal. Assistant Commissioner held that cess could be levied. Commissioner (Appeals) upheld the same.

However, Tribunal referring to Prevention of Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959 held that 'instant tea' cannot be considered as 'tea' within the meaning ofSection (3)n of the Act, thus cess could be levied. In appeal before this Court appellant contended that the term 'tea' for levy ofcess has to be interpreted on the basis of the definition of 'tea' given in the Act and not on the basis of definitions given in the Preventioq of Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959; that 'instant tea' is variety of tea and it is commercially known and sold in the market as 'instant tea'; and that there was no fprther need to go into the manner of manufacture and preparation of 'instant tea' and the tribunal misdirected itself in concluding that 'instant tea' is not 'tea' by referring to other enactments.

Respondent submitted that 'instant tea' has a different identity and it is differently known in the market and hence it does not fall within the definition II 730 COMMISSIONER OF CENTRAL EXCISE v. TATA TEA LTD. [SHIVARAJ V PATIL,J. l 73J of 'tea' under the Act. -+ Allowing the appeals, the Court ' HELD: 1. 1. In order to satisfy the definition of 'tea' under Section 3(n) ' of the Tea Act, 1953 a product should be commercially known as tea and it should be made from the leaves of the plant ofCamellia Sinensis (L) 0. Kuntze. 'Instant tea' satisfies both these conditions. It conveys that it is a 'tea. ' The .. term 'instant tea' is not the brand name of the product manufactured by the assessee but the name of the product itself. It is a variety of tea. Further, the .. ( term 'instant tea' gives a meaning that it is a 'tea', which can be prepared/ used instantaneously. Merely because the product is known as 'instant tea', it does not cease to be known commercially as 'tea'.

The manner of preparation oftea and the process of manufacture of 'instant tea' powder cannot take away 'instant tea' out of definition of'tea' under the Act. Thus, the 'instant tea' falls within the definition of Section 3(n) and cess can be levied on i( under Section 25 of the Act. 1753-F-H; 734-A, BJ • 1. 2. Commissioner (Appeals) was right in upholding the Order of the Assistant Commissioner but the Tribunal went wrong in holding that 'instant .. tea' is different from 'tea' and it fell outside the scope of Section 3(n) of the ~ Act. When the Act defined 'tea' specifically, the tribunal ought not to have strained itself by referring to other enactments to construe 'instant tea' as the product not included within the definition of 'tea' under the Act. 1734-B-CJ CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1515-1517 of 1999, From the Judgment and Order dated J7. 7. 1998 of the Customs Excise p • J> and Gold (Control) Appellate Tribunal, South Zonal Bench at Chennai in A. No.

E/358, 361 & 362/98 in F. O. No. 1352-1354 of 1998. Soli J. Sorabjee, Attorney General, Rajiv Nanda and 8. K. Prasad for the Appellant. Anil 8. Diwan, Joy Joseph and R. 8. Hathikhanwala for the Respondent. The Judgment of the Court was delivered by SHIVARAJ V. PATIL, J. The short question that arises for consideration is whether 'instant tea' manufactured and exported by the respondent is liable ~ A for levy of cess under Section 25 of the Tea Act, 1953. + The respondent is engaged in the manufacture of 'instant tea'. Show cause notices were issued to the respondent as to why on 'instant tea' cleared by them during the given period, cess should not be levied under ,,- --" Section 25 ofthe Tea Act, 1953 (for short the Act). The reply ofthe respondent B was that 'instant tea' was not 'tea' falling within the definition of Section 3(n) of the Act and that the show cause notices issued were patently illegal. The Assistant ~ommissioner confirmed the demand.

The respondent filed appeal ~ to the Commissioner (Appeals), ,Cochin, who upheld the order of the Assistant }- Commissioner. The respondent took up the matter before the CEGAT which set aside the order of the Commissioner (Appeals) taking a view that 'instant c tea' cannot be considered as 'tea' within the meaning of Section 3(n) of the Act. Hence, these appeals by the revenue. The learned Attorney General urged on behalf of the appellant that the term 'tea' for levy of cess pas to . be interpreted on the basis of the definition ·n of 'tea' given in the Act and not on the basis of definitions given in the Prevention of Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959; 'instant tea' is a variety of tea and it is commercially known and ~ sold in the market as 'instant tea'; there was no further need to go ·into. the manner ofmanufacture and preparation of 'instant tea'; the Tribunal misdirected should be commercia!

ly known as tea and it should be made from the leaves • of the plant of Camellia Sinensis (L) 0. Kuntze. 'Instant tea' satisfies both these conditions. By the very name, the product namely 'instant tea' conveys that it is a 'tea'. The term 'instant tea' is not the brand name of the product manufactured by the assessee but the name of the product itself. It is a variety of tea. Further, the term 'instant tea' gives a meaning that it is a 'tea', ·G which can be prepared/used instantaneously. Merely because the product is known as 'instant tea', it does not cease to be known commercially as 'tea'. Whether tea is consumed as hot beverage or a cold beverage depending 'I: upon one's liking and taste, it does not make any difference in deciding whether it is a tea falling within the definition of Section 3(n) of the Act.

In our view, the manner of preparation of tea and the process of manufacture of 'instant tea' powder cannot take away 'instant tea' out of definition of 'tea' + under the Act. Ultimately 'instant tea' is produced from the leaves of the plant Camellia Sinensis (L) 0. Kuntze. In these circumstances, the 'instant tea' is covered by the definition of tea within the meaning of Section 3(n). Once ~~ 'instant tea' falls within the definition of Section 3(n), a cess can be levied on it under Section 25 of the Act. In our view, the Commissioner (Appeals) was right in upholding the order of the Assistant Commissioner but the Tribunal went wrong in holding that 'instant tea' is different from 'tea' and ... it fell outside the scope of Section 3(n) of the Act referring to Prevention of )'" Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959.

" When the Act defined 'tea' specifically, the Tribunal ought not to have strained itself by referring to other enactments to construe 'instant tea' as the product not included within the definition of 'tea' under the. Act. For what is stated above, we answer the question in the affirmative and in favour of the Revenue. Consequently, the order under challenge cannot be sustained. Hence, the same is set aside. The appeals are allowed. No costs. N. J. Appeals allowed. ~ T