Tea blending

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Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2011 Dear Sir

Why excise not pay by tea blender?

Regards
PUNIT KUMAR BHANSALI
CA FINAL

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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14 October 2011 Whether Blending of tea amounts to manufacture or not?

This issue has been addressed by the Supreme Court in the case of CIT v. Tara Agencies 2007
(214) ELT 491 (SC). The Supreme Court has held that blending of different qualities of tea to
smoothen its marketability is not manufacture but processing. The production of tea happens in
the tea gardens. Manufacture happens when tea leaves are plucked from the tea bushes and by
mechanical process, converted to tea. Blending of different qualities of tea is its processing.
The Apex Court explained that the word ‘production’ when used in juxtaposition with the word
‘manufacture’ covers bringing into existence new goods by a process which may or may not
amount to manufacture. It covers all the by-products, intermediate products and residual
products which emerge in the course of manufacture of goods. Processing is only an
intermediate stage of production and/or manufacture. The Supreme Court elaborated that no
hard and fast rule can be applied for determining as to whether a process amounts to
manufacture in every case and thus each case must be decided on its own facts.