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2015 (5) TMI 881 - PUNJAB & HARYANA HIGH COURT

2015 (5) TMI 881 - PUNJAB & HARYANA HIGH COURT - 2015 (322) E.L.T. 74 (P & H) - Denial of Exemption claim - 100% EOU - additional duty of excise under the Finance Act, 1999 - Scope of Notification No.22/2003 - Held that:- In the notification under section 5-A(1) of the Central Excise Act, 1944, the Government exempted the duty of excise leviable thereon under the provisions specified therein, namely, Central Excise Act, 1944, Additional Duties of Excise (Goods of Special Importance) Act, 1957 an .....

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., after first notification of the year 1994. - Decided against assessee. - CEA No.62 of 2013 (O&M), CEA No.63 of 2013 (O&M), CEA No.64 of 2013 (O&M) - Dated:- 21-4-2015 - MR. S.J. VAZIFDAR AND MR. G.S. SANDHAWALIA, JJ. Mr. Akshay Bhan, Senior Advocate with Mr. Alok Mittal, Advocate for the appellant Mr. Kamal Sehgal, Advocate for the respondent JUDGEMENT S.J. VAZIFDAR, ACTING CHIEF JUSTICE: These appeals raise a common question of law and are, therefore, disposed of by a common judgment. We wil .....

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law arise:- (a) Whether the Courts below have erred in their orders dated 28.03.2007 and 08.05.2012, in as much as the provisions of the Notification No.22/2003 exempts the excise duty so imposed upon the appellant. (b) Whether the impugned orders are not supported by law and are thus illegal, arbitrary and void. 4. We, however, admit the appeal on the following substantial question of law framed as under:- Whether the appellant is entitled to exemption from additional duty of excise under the .....

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ication. The notification dated 31.03.2003, in so far as it is relevant, reads as under:- In exercise of the powers conferred by sub-section (1) of section 5A 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 Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978), the Central Government being satisfied, that it is .....

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ip;. …… (e) ……………. from the whole of, (i) the duty of excise leviable thereon under section 3 of Central Excise Act, 1944 (1 of 1944); (ii) the additional duty of excise, if any, leviable thereon under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and (iii) the additional duty of excise, if any, leviable thereon under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) A .....

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various times in respect of the HSD. The appellant based the application for refund on the ground that the said notification issued on 31.03.2003 also exempted the AED levied on HSD under Section 133 of the Finance Act, 1999. The appellant contended that it paid the AED by mistake. The appellant was afforded a hearing in respect of the application. The application was rejected. The rejection was confirmed by the first appellate authority and by the impugned order of the CESTAT. 7. The appellant .....

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e rate set forth in the said Schedule. (2) The additional duty of excise referred to in subsection (1), shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, or any other law for the time being in force. (3) The provisions of the Central Excise Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the additional duty of excise l .....

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is answered against the appellant by the judgment of the Supreme Court in 1986(4) SCC 66-Union of India and others vs. M/s Modi Rubber Ltd. The facts and the legal provisions of that case are similar to those in the case before us. The question in that case related to the construction of the expression duty of excise in two notifications issued under Rule 8 of the Central Excise Rules, 1944. Rule 8 is similar to Section 5(A) of the Excise Act, 1944. The said notification in the case before us u .....

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Government issued a notification under Rule 8(1) exempting tyres for motor vehicles from so much of the duty of excise leviable thereon as was in excess of 55% ad valorem. It is the words in this notification duty of excise that fell for consideration of the Supreme Court. A further notification was issued in respect of other type of tyres as well which also used the same expression duty of excise . Since 1963 special duty of excise was levied inter alia on tyres by various Finance Acts passed .....

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er:- 32. Special Duties of Excise.- (1) In the case of goods chargeable with a duty of excise under the Central Excises Act as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable there shall be levied and collected a special duty of excise equal to five per cent of the amount so chargeable on such goods. (2) Sub-section (1) shall cease to have effect after the 31st day of March, 1980, except as r .....

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ing those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the special duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules as the case may be. Sub-sections (3) and (4) are similar to sub-sections (2) and (3) of Section 133 of the Finance Act, 1999, which are relevant in the matter before u .....

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duty of excise levied under the Finance Act. Rejecting the contention, the Supreme Court held in paragraphs 7 and 9 of the judgment in Union of India and others vs. M/s Modi Rubber Ltd. (supra) as under:- 7. Both these notifications, as the opening part shows, are issued under Rule 8(1) of the Central Excise Rules, 1944 and since the definition of duty in Rule 2, clause (v) must necessarily be projected in Rule 8(1) and the expression duty of excise in Rule 8(1) must be read in the light of tha .....

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nded to refer only to duty of excise leviable under the Central Excises and Salt Act, 1944, it must be held to cover all duties of excise whether leviable under the Central Excises and Salt Act, 1944 or under any other enactment. The respondents sought to support this contention by pointing out that whenever the Central Government wanted to confine the exemption granted under a notification to the duty of excise leviable under the Central Excises and Salt Act, 1944, the Central Government made i .....

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C.E. dated December 31, 1955, Notification No. 95/61-C.E. dated April 1, 1961, Notification No. 23/55-C.E. dated April 29, 1955 and similar other notifications. But, here said the respondents, no such words of limitation are used in the two notifications in question and the expression duty of excise must, therefore, be read according to its plain natural meaning as including all duties of excise, including special duty of excise and auxiliary duty of excise. Now, it is no doubt true that in thes .....

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e leviable under the Central Excises and Salt Act, 1944, it does not follow that in the absence of such words of specificity, the expression duty of excise standing by itself must be read as referring to all duties of excise. It is not uncommon to find that the legislature sometimes, with a view to making its intention clear beyond doubt, uses language ex abundanti cautela though it may not be strictly necessary and even without it the same intention can be spelt out as a matter of judicial cons .....

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Excises and Salt Act, 1944' do not find a place as in the other notifications relied upon by the respondents. But, that does not necessarily lead to the inference that the expression duty of excise in these notifications was intended to refer to all duties of excise including special and auxiliary duties of excise. The absence of these words does not absolve us from the obligation to interpret the expression duty of excise in these notifications. We have still to construe this expression - w .....

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e special excise duty and auxiliary excise duty. ……. …… ……. ……. 9. We have already pointed out, and this is one of the principal arguments against the contention of the respondents, that by reason of the definition of duty in clause (v) of Rule 2 which must be read in Rule 8(1), the expression duty of excise in the notifications dated August 1, 1974 and March 1, 1981 must be construed as duty of excise payable under the Central Excises and .....

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ply in relation to the levy and collection of the duty of excise under the Central Excises and Salt Act, 1944. It was urged on behalf of the respondents that by reason of this provision, Rule 8(1) relating to exemption from duty of excise became applicable in relation to the levy and collection of special duty of excise and exemption from payment of special duty of excise could therefore be granted by the Central Government under Rule 8(1) in the same manner in which it could be granted in relat .....

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1944 and the expression duty of excise in these two notifications could legitimately be construed as comprehending special duty of excise. This argument is, in our opinion, not well founded and cannot be sustained. It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of duty contained in Rule 2 clause (v) which according t .....

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ower, it would be doing so under Rule 8(1) read with sub-section (4) of Section 32 or other similar provision. The reference to the source of power in such a case would not be just to Rule 8(1), since it does not of its own force and on its own language apply to granting of exemption in respect of special duty of excise, but the reference would have to be to Rule 8(1) read with sub-section (4) of Section 32 or other similar provision. It is significant to note that during all these years, whenev .....

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applicable. Take for example, the Notification bearing No. 63/78 dated August 1, 1978 where exemption is granted in respect of certain excisable goods from the whole of the special duty of excise leviable thereon under sub clause (1) of clause 37 of the Finance Bill, 1978 . The source of the power recited in this notification is sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 read with sub-clause (5) of clause 37 of the Finance Bill, 1978 . So also in the Notification bearing No. 29/79 .....

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spondents have in fact produced several notifications granting exemption in respect of special duty of excise or additional duty of excise and in each of these notifications, we find that the source of power is described as sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 read with the relevant provision of the statute levying special duty of excise or additional duty of excise by which the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder including those .....

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e to the levy and collection of special, auxiliary or any other kind of excise duty levied under such statute, the exemption must be read as limited to the duty of excise payable under the Central Excises and Salt Act, 1944 and cannot cover such special, auxiliary or other kind of duty of excise. The notifications in the present case were issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 simpliciter without reference to any other statute and hence the exemption granted under .....

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extile and Textile Articles) Act, 1978. The intention was clearly to limit the exemption only in respect of the enactments specified in the notification. The Finance Act of 1999 was not one of them. A plain reading of the notification itself makes it clear that the exemption was not to operate in respect of the additional excise duty levied under the Finance Act, 1999. 11. The judgment squarely applies to the case before us in almost every respect. It is also pertinent to note that the notificat .....

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d, namely, August 1, 1974, there was no special duty of excise leviable on tyres. It came to be levied on tyres with effect from the financial year 1978 under various Finance Acts enacted from year to year. It is therefore difficult to understand how the expression duty of excise in the notification dated August 1, 1974 could possibly be read as comprehending special duty of excise which did not exist at the date of this notification and came to be levied almost four years later. When special du .....

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