TMI Blog2009 (8) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... onal excise duty pertaining to the goods which were entitled for the exemption benefit under the said notification - Decided against the assessee - 342-348, 646-674, 703, 757-772, 774-781, 1014-1018, 1492-1499, 1500-1542, 1787-1807, 1847-1848, 1937, 1948-1969/2009, 116, 1457-1458, 1463-1469, 1473-1477 of 2008 - 900A-1143A/2009-EX(PB) - Dated:- 12-8-2009 - Justice R.M.S. Khandeparkar, M. Veeraiyan, JJ. REPRESENTED BY : S/Shri B.K. Singh, Jt. CDR, V.K. Choudhary, and P.K. Singh, DR s, for the Appellant. S/Shri A.R. Madhav Rao, R.K. Hasija, Sudhir Malhotra, R. Santhanam, S.K. Malhotra, S. Sunil, A.S. Gill, Vishnu Sexena and Atul Gupta, Advocates, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (Oral)]. In all these appeals common questions of law and facts arise and, therefore, they were heard together and are being disposed of by this common order, in terms of direction issued on 8-7-2009 in Appeal No. 342/2009 and other connected matters. 2. In all these appeals the point for consideration which arises is whether the education cess and higher education cess which was paid alongwith the excise duty in terms of exemption Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der which the assessees claim for refund of the education and higher education cess which has been granted by the Commissioner (Appeals) and which is disputed by the Department reads thus - Jammu, Kashmir and Udhampur - Exemption to units located in Industrial Growth Centre, Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area. In exercise of the powers conferred by sub-section (1) of section 5 A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than goods specified in Annexure I appended hereto, and cleared from a unit located in the Industrial Growth Centre, Industrial Infrastructure Development Centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification in the Official Gazette or from the date of commencement of commercial production whichever is later . 6. Learned Representatives for the Department submitted that the notification in question has been apparently issued under Section 5A(1) of the Central Excise Act, 1944 read with Section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Section 3(3) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 and, therefore, on the face of it, the notification cannot be extended to any duty which is payable under any other enactment irrespective of the fact whether it is in the nature of excise duty or not. It was further submitted that education and higher education cess were imposed under the Finance Act and the notification in question nowhere speaks of any exemption in relation to the duties imposed under any of the Finance Acts and, therefore, the plain reading of the notification would not permit exemption from the cess sought to be imposed under Finance Act and for the same reason question of refund thereof does not arise. Attention was drawn to Finance Act, 2004 and Finance Act 2007 in relation to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude the benefits under some other enactment. It was also contended that the collection of the duty once levied is a natural corollary to the levy of the duty. It was also submitted that unless the notification specifically describes the duty to be refundable, even if it is assumed to be in the form of excise duty, cannot be read in the said notification as one of the duty refundable under the said notification. 8. Drawing our attention to the phraseology used in the said notification, it was contended that the same speaks of payment of collection consequent to the levy of the duty. Further, referring to Section 93 of the Finance Act, it was also contended that the education cess and higher education cess was calculated and levied and collected on the basis of total amount of duties which were paid in terms of the said notification. 9. On the other hand, learned Advocates appearing for the respondents submitted that the levy and payment of excise duty in terms of the said notification does not include collection of duty within the meaning of the said expression under the statutory provision in relation to the payment of excise duty. According to the learned Advocates, deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 682/73/2002-C.X., dated 19-12-2002. It was sought to be contended that the notification was basically designed to give certain relief from the payment of duties by the manufacturers establishing their units in the state of Jammu Kashmir. Being so, the intention of legislature being to grant exemption to manufacturers from the subjected area from payment of duties and the levy of cess being directly related to the levy and collection of excise duty, in the absence of actual collection of excise duty, there was no obligation for the assessees to pay the education cess. It was sought to be contended that even the authorities have clearly understood the notification to have been designed to give full exemption to the assessees from the payment of duties and, therefore, objection by the Department for refund of the education cess is unwarranted. 10. Relying upon the decision by the Apex Court in CCE, Patna v. Telco reported in 1997 (92) E.L.T. 303, it was sought to be contended that a notification cannot be read in such a manner that it would defeat the very purpose behind the issuance of the said exemption of notification. If we give literal meaning to the words of the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bros, reported in 1993 (65) E.L.T. 471 (S.C.), it was sought to be contended that it is not the nomenclature but the character of the tax or duty that is to be seen and if one consider the nature of the duty in the form of cess under the Finance Act, it would be at once clear that it is nothing but one of the forms of excise duty. Further, referring to the decision of the Apex Court in M/s. Ashok Service Centre and Another etc. v. State of Orissa reported in AIR 1983 SCC 394, it was sought to be contended that when the parent levy in the form of excise duty is itself sought to be exempted under the notification, the Department cannot be heard to contend that the assessee would be at liable to pay the cess. Referring to the decision in the matter of Pratibha Processors v. Union of India reported in 1996 (88) E.L.T. 12 (S.C.) and in the matter of Commissioner of Customs, Chennai v. Jayanthi Krishna Co. reported in 2000 (119) E.L.T. 4 (S.C.), it was sought to be contended that once the goods do not attract the excise duty, question of payment of cess cannot arise. Considering the exemption granted under notification, according to the respondents, therefore, alongwith the refund of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes. 18. The notification on the face of it, undoubtedly states the same to be an exemption notification. It specifies the circumstances under which an assessee seeking to avail the benefits thereunder would be entitled to avail the same. It also enumerates the condition which an assessee seeking to avail the benefit thereunder has to satisfy. It also enumerates the obligations which the assessee has to fulfill in order to avail the benefits thereunder. It describes the method of performing the obligations of the assessee in order to avail the benefit thereunder. It specifies the mode in which the obligations in relation to the duty liability are to be discharged by the assessee seeking to avail the benefit thereunder. It explains the terminology used in the said notification as also the units to which the exemption would apply. It also specifies the benefits, its nature and steps which are to be required to be taken by the assessee to avail those benefits, including the period within which such steps are required to be taken. It also specifies various steps required to be taken to give full effect to the notification. In that respect, as rightly pointed out by the learned Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption, may give necessary declaration in advance and may take credit of the amount of duty paid during the month under consideration other than by way of utilization of CENVAT credit in his account current, maintained in terms of para V of the Excise Manual of Supplementary Instructions issued by the Central Board of Excise and Customs and such amount credited in the account current may be utilized by the manufacturer for payment of duty, in the manner specified under Rule 8 of the Central Excise Rules, 2002, in subsequent months, and such payment should be deemed to be payment in cash. In respect of such payment also, the duty paid would be refunded within the time stipulated in the said notification. Rule 8 of the Central Excise Rules 2002 describes the manner in which the payment is required to be made. 21. The notification on the face of it uses the expression payment of duty with reference to discharge of duty obligation by the manufacturer for availing the exemption benefit under the said notification. The term collection is nowhere to be found in the notification. The said term is used in Section 93 of the Finance Act. It is settled law that the meaning of any term in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter refund thereof. It obviously includes the concept of collection of duty. There cannot be refund, unless there had been payment. Being so, the argument advanced on behalf of the assessees that the payment in terms of the notification is not in the form of collection cannot be accepted. In fact, none of the judgments which have been cited or relied upon on behalf of the assessees deals with this aspect of the matter nor there is any indication that view that is sought to be canvassed herein on behalf of the assessees is found to be even remotely acceptable to any of the Courts in any of those cases. 22. In Deccan Cements Ltd. Anr. (supra), the Apex Court in para 6 held thus- It is to be noted that there are different stages in the matter of imposition of tax or cess. First is the source of power for levying tax or cess as the case may be. The second is the actual levy by an adjudication or assessment order. Sometimes, the quantification of the amount payable is done in the adjudication/assessment order. Finally, comes the question of collection. That being so, collection is a natural corollary of the levy. It is inconceivable that the levy is valid but collection ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of duty, there would be no compliance of the obligation of the assessee in order to avail the benefit under the said notification. 25. Once it is found that the notification nowhere gives room for non-collection of duty as sought to be contended on behalf of the assessees, we find no force in the argument canvassed on behalf of the assessee that the levy of education cess or higher education cess are either without any basis or that the same was illegally levied. We find that the Department was justified in levying the education cess and higher education cess as the excise duties were lawfully levied and collected in the manner specified under the said notification read with the provisions of Central Excise Rules, 2002. Neither the decision in Bharat Box Factory Limited case nor in Cyrus Surfactants Pvt. Limited [2007 (215) E.L.T. 55 (Tri.-Del.)] case deals with this aspect of the matter nor that point ever arose therein and/or was considered and, therefore, the said decisions are of no help to the respondents in the matter in hand. 26. It brings us to the question as to whether education cess so collected would also be refundable under the said notification. 27. As already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also uses the expression duty of excise or additional duty of excise it would also include the education cess which has been clearly defined as duty of excise under Section 93 of the Finance Act, 2004. The contention is totally devoid of substance. Merely because the cess which is paid in terms of the provisions of the Finance Act and partakes the color of the excise duty, that itself would not make the tax or the duty to be the part of the excise duty paid in terms of the said notification. The notification clearly states that the exemption is to the duty of excise or additional duty of excise, as the case may be, leviable thereunder in all the said Acts . It clearly restricts to the Acts specified under the said notification and does not include the Finance Act. Being so, there is hardly any room to presume that the expression duty of excise or additional duty of excise will also refer to any duty under any other Acts also. It is, however, sought to be contended that the education cess was sought to be levied for the first time in 2002 whereas the notification was issued in 2004 when the Finance Act was not in force. In our opinion, it makes no difference. Neither the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation by Executive. The officer drafting a particular piece of subordinate legislation in the Executive Department may employ words with a view to leaving no scope for possible doubt as to its intention or sometimes even for greater completeness, though these words may not add anything to the meaning and scope of the subordinate legislation . Undoubtedly, therefore, the Apex Court has held that since the notification was issued under specific provision of the specified Act simpliciter without reference to any other statute, the exemption granted cannot be held to be applicable to the similar type of tax leviable under different enactments. Applying the same rule in the matter in hand, once it is clear that the notification has been issued under three specified enactments, and further exemption having been specified as available to the excise duty and special excise duty leviable under those very enactments, there is no scope for inclusion of any other similar type of excise duty in the exemption notification. 31. As regards the contention relating to the intention behind the grant of exemption, undoubtedly it is essentially for the benefit of the manufacturer establishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duties of excise on such goods under the Central Excise Act, 1944 or the rules, as the case may be, would disclose that the provisions of two Acts are independent from each other and merely because education cess is defined as the excise duty, it could not be construed that the cess levied under Finance Act should also be exempted under the said notification even in the absence of clear specification in that regard under the said notification. 33. In Telco case, the issue involved related to interpretation of Section 9 of the Industries (Development and Regulation) Act, 1951 vis- -vis the notification dated 28-12-82 issued thereunder and Rule 2 and 3 of Automobile Cess Rules 1984, and it was with reference to the dispute relating to the manner in which the levy of cess to be collected in respect of the motor vehicles. It was the contention on behalf of the Revenue that the cess should be levied at 1/8% of the value of the motor vehicle that value being computed as explained in Section 9 of the Industries (Development and Regulation) Act. It was the contention of the assessee that the value of motor vehicle for the purpose of levy of cess is to be calculated in the manner laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents case in hand. 37. In Jayanthi Krishna Co. case, the Hon ble Court had granted relief based on the decision in Pratibha Processors case. 38. In Orient Paper Mills case, the question as to whether the amount of duty of excise payable by a manufacturer mentioned in Section 280ZD for the purposes of tax credit certificate postulated by under Section 280ZE of the Income Tax Act, 1961 means excise duty actually paid or excise duty leviable under the Excise Act. It was held that the decision of the High Court placing reliance in the judgment of the Apex Court in Orient Weaving Mills (P) Ltd. Anr. v. Union of India Ors. reported in AIR 1962 SC 98 = 1978 (2) E.L.T. J311 (S.C.), that the exemption granted by an exemption notification has effect as if enacted as a part of the statute required no further discussion. It merely means that once exemption under notification is issued it forms part of the statutory provisions and, therefore, has to be given effect as contemplated under the notification considering the same as part of the mandate of the statute. 39. The decisions in Indian Oil Corporation Limited, Tata Oil Mills Co. Limited, Kalyani Spinning Mills Limited and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion cess is levied @ 2% of the aggregate of the duties and since the petitioner has been exempted from paying excise duty, this 2% cess cannot be calculated is not tenable. The excise duty can always be calculated even if it is not collected and on this notional calculation, the education cess can be calculated. This cess has to be collected in terms of the Finance Act. Needless to say that the observations were made with reference to the challenge in the matter wherein the issue related to absence of jurisdiction to the Revenue Department to collect any cess leviable on tractors. At the same time it appears that there was no dispute raised before the High Court that for the purpose of levy of education cess, it is absolutely necessary that there must be levy and collection of excise duty. In other words the observations as above were made in the facts of the case wherein there was no dispute raised that education cess could be calculated even on notional calculation of excise duty. Being so, that will be of no help to the Revenue in the matter in hand. 42. Perusal of the notification in question also discloses that the exemption granted thereunder is not an absolute exemption. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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