Jallan Golaghat Tea Co. Pvt. Ltd. vs Union of India

Heard the petitioner and the respondents. The additional Excise duty is levied under the Financial Act, 2003 in respect of the tea; however the tea purchased from small growers whose holding is less than 10 hectares is made exempt from levy of Excise duty as per the item 5 of the Notification (No. 13/2003), dated 1st March, 2003.

The petitioner submitted returns to the Assistant Commissioner (AC) of Central Excise, Nagaon. The AC passed the impugned order holding that the petitioner has not produced documents to prove that the seller from whom the tea was purchased was a small grower with a land holding less than 10 hectares. It is observed that no other revenue documents have been produced to substantiate the said contention, thus rejected the benefit of exemption to additional Excise duty.

The Counsel for the petitioner submits that the order of the Deputy Commissioner (DC), Central Excise, Nagaon dated 27th February, 2007 discloses that in respect of the assessments of the petitioner in respect of the orders for earlier periods when the AC rejected the exemption on the same ground the appeal was allowed by the appellate authority. Therefore, the DC in the said order on the ground of "equity" allowed the exemption of the additional Excise duty. The relevant observation from the order is quoted hereunder.

"Regarding the claim of refund amounting to Rs. 11,14,683/- for the period from 1-4-2004 to 28-2-2005, I have gone through the case records and the submissions made by the assessee in this regard. The assessee has contended that the statement of accounts for 2004-05 by which benefit of exemption of Additional Excise Duty has been sought in terms of Notification No. 42/2003-C.E., dated 14-5-2003, has to be considered separately and the decision of the Assistant Commissioner of Central Excise, Nagaon, passed in Order-in-Original No. 04/CAN/NAG/CE/05, dated 11-2-2005 rejecting their claim for 2003-04 cannot be imposed in the subsequent year, i.e., 2004-05, especially when the issue has been settled by the Commissioner (Appeals), Customs & Central Excise, Guwahati, passed in cases of other assesses under the jurisdiction of this division. I have considered this aspect and find that the statement of accounts is required to be submitted every year in terms of the said notifications. It is not necessary that an assessee qualifying for one year may qualify in the subsequent year also. In other words, an assessee has to qualify in each and every year under the said notifications. I have also noticed that in the cases of M/s. Radha Tea Company (P) Ltd. & M/s. SSL Tea Company Private Limited, the then Assistant Commissioner of Central Excise, Nagaon, rejected their claims of eligibility vide Order-in-Original Nos. 19/AC/NAG/CE/04, dated 21-9-2004 and 16/AC/NAG/CE/04, dated 21-9-2004 respectively on the ground that Dag & Patta Nos. of the land under cultivation of tea by the small tea growers having tea cultivated land of 10 hectares or less and the relevant land documents were not provided to the department for availing benefit under the said notifications. The said orders were appealed against and were set aside by the Commissioner (Appeals), Customs & Central Excise, Guwahati, under Order-in-Appeal Nos. 01/CE(A)/GHY/2005, dated 12-1-2005 & 110/CE(A)/GHY/2004, dated 29-12-2004 respectively on the ground that the Assistant Commissioner cannot reject the statement of accounts submitted by the manufacturer by bringing in extraneous conditions on supposed intention of the authority. The said decisions of the Commissioner (Appeals) have been accepted by the Department also. Considering these aspects, I am of the opinion that principles of equity should be extended to them also for the year 2004-05 so as to render justice as per the provisions of law and to maintain judicial discipline."

It is further submitted that the returns does not contemplate filing of land holding of the small grower to seek exemption. In that view it is argued that the order of the AC is bad in law.

The Counsel for the department submits that the order is an appealable order. It is further stated that the order of the DC cannot be relied on in this Court as the order had no persuasive value in law. It is stated that the order of the AC is sound and proper, hence the petition is to be rejected. On a thorough consideration of the facts and the material we find that the order of the AC ''for insisting land documents of the small grower'' is sound and proper. When the basic proof of status of the small grower is not produced the petitioner would not be entitled to any exemption. However in the interests of justice we remand the matter to the AC for a fresh consideration by providing an opportunity to the petitioner to produce the land documents of the seller to substantiate that the seller is a small grower with a land holding less than 10 hectares. Accordingly the petition is disposed of.