The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) has observed that the CTC machine for tea leaf cutting cannot perform versatile functions beyond leaf cutting and it does not fall under Tariff Heading of ‘Other Machines’. The two-member bench allowed the exemption as per the Excise Notification.
Shri Vineet Bagaria, the Appellants are manufacturers of various Tea Processing Machineries. They were classifying the product under CET 84388040. They were availing the exemption under Notification No. 06/2006-CE dated 01/03/2006 wherein Tea Leaf Cutting & Rolling Machine falls under Tariff Item 84388040. The Department issued Show Cause Notice on the ground that the Machine falls under CET 8438 90 90 and hence they are not eligible for the exemption granted under Notification No. 06/2006-CE dated 01/03/2006.
After due process, the Adjudicating Authority confirmed the demands along with interest and penalties. Being aggrieved, the Appellants are before the Tribunal. Since the issue is common in respect of all the Appeals and admittedly the machinery in question is similar/identical in all aspects, with the consent of both sides, all the Appeals were taken up together for disposal.
The CTC Machine manufactured by the appellant or for that matter, any CTC Machine can only perform the process of cutting leaves through the Toothed-Rollers. Tea leaves are fed by a conveyor belt to the Rollers. To get smaller sizes such Rollers are fixed at intervals with the intervening Conveyor Belts, connecting the Rollers. In the process, the tea leaf while being reduced to dust, also automatically turns granular in shape.
The appellant referred to the Photographs of the CTC (Tea Leaf Cutting Machine)as well as the copy of the “Martin Pride CTC Instruction and Installation Manual” which clearly show that the machine is essentially comprised of Conveyor Belts and Toothed-Rollers and the result is only leaf cutting.
There is nothing like an integrated tea-processing versatile machine, as contended by the adjudicating authority, to deny the benefit of exemption. The Commissioner has not adduced any evidence to support his view that the CTC (Tea Leaf Cutting Machine) performs any other versatile functions beyond leaf cutting.
One of the Appellants, M/s Vikram India Ltd. has submitted a copy of the letter issued by the Tea Board on January 3, 2008, specifying that Tea Leaf Cutting and Rolling Machines falls under Tariff Item No. 8438 80 40. The Tea Board vide their letter dated 28 April 2008 has issued a letter stating that Rotorvane and CTC Machines are used only for “Tea Leaf rolling and cutting purpose in tea processing unit”. The Appellant has enclosed a Chartered Engineer’s Certificate dated 15/05/2014, wherein the Engineer has specified that the Rotorvane and CTC Machine are used for Tea Rolling & cutting purposes.
The bench comprising of Mr R Muralidhar, Member (Judicial) and Mr K Anpazhakan, Member (Technical) observed that the Department had failed to bring in any evidence to the effect that the CTC machine was capable of multiple functions. The letter issued by the Tea Board and the Chartered Engineer confirms that the CC machine is used for Cutting Tea Leaves only. The Department has not rebutted these letters with any cogent documentary evidence.
The CESTAT held that the confirmed demand for the extended period is not legally sustainable and set aside the same while allowing the appeal.
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