2009 (3) TMI 739 - AT - Central Excise

Refund of education cess - Area based exemption - N/N. 32/99-C.E. - whether the appellants are entitled for refund of education cess which was levied by Finance Act, 2004 under the provisions of Notification No. 32/99-C.E? - Held that - the provisions of Notification No. 40/01-C.E. and 19/04-C.E. are not parallel to the provisions of the N/N. 32/99-C.E. which is in dispute in the present case. The N/N. 32/99-C.E. provides refund of basic excise duty or additional duty of excise which has been paid from the PLA whereas the N/N. 40/01-C.E. and 19/04-C.E. provide rebate in respect of the whole of duty paid in respect of the exported goods. Excise duty can always be calculated even if it is not collected on notional basis and education cess can be calculated as per provisions of Finance Act, 2004. Appeal dismissed - decided against appellant.

Issues:
1. Entitlement to refund of education cess under Notification No. 32/99-C.E.
2. Interpretation of provisions regarding refund of basic excise duty and education cess.
3. Applicability of previous court decisions on similar matters.
4. Dispute over refund claims and provisions under the notification.

Issue 1: Entitlement to refund of education cess under Notification No. 32/99-C.E.
The appellant filed appeals against the denial of refund of Education Cess under Notification No. 32/99-C.E. The appellant claimed entitlement to the refund of education cess paid through account current (PLA) as collected by way of excise duty. The appellant argued that education cess is levied as an excise duty based on the Finance Act, 2004. The appellant cited decisions from Rajasthan and Gujarat High Courts supporting the inclusion of education cess in excise rebate for exported goods. However, the Revenue contended that the notifications in question only allow refund of basic excise duty, not education cess. The Revenue argued that there is no provision for refund of education cess under the notification, leading to the denial of refund claims.

Issue 2: Interpretation of provisions regarding refund of basic excise duty and education cess
The central issue in these appeals was whether the appellants are entitled to a refund of education cess under Notification No. 32/99-C.E., which provides for the refund of basic excise duty or additional duty paid from the account current (PLA). The notification does not include provisions for refund of duty paid from the Cenvat Account, and there is no dispute regarding the refund of basic excise duty paid from the PLA account. The appellant relied on court decisions from Rajasthan and Gujarat High Courts, which interpreted similar notifications to allow for the rebate of education cess on exported goods. However, the Tribunal found that the provisions of the notifications cited by the appellant were not parallel to the provisions of Notification No. 32/99-C.E., which is the subject of the present case. Therefore, the Tribunal concluded that the decisions relied upon by the appellant were not applicable to the facts of the current case.

Issue 3: Applicability of previous court decisions on similar matters
The appellant cited decisions from the Hon'ble Rajasthan and Gujarat High Courts, along with a Tribunal decision, to support their claim for a refund of education cess under Notification No. 32/99-C.E. The Tribunal analyzed these decisions and found that they were based on notifications different from the one in question. The Tribunal distinguished the provisions of Notification No. 32/99-C.E. from those of the notifications considered in the previous court decisions. The Tribunal emphasized that the notifications providing for rebate of education cess on exported goods were not applicable to the current case, as the relevant notification only allowed for the refund of basic excise duty or additional duty paid from the PLA account.

Issue 4: Dispute over refund claims and provisions under the notification
The dispute in these appeals revolved around the refund claims for education cess under Notification No. 32/99-C.E. The appellant argued for the refund based on the nature of education cess as a duty of excise, supported by legal precedents. However, the Revenue contended that the notification did not include provisions for the refund of education cess, leading to the denial of the refund claims. The Tribunal examined the arguments presented by both parties, considered relevant court decisions, and ultimately dismissed the appeals, finding no provision under the notification for the refund of education cess. The Tribunal upheld the denial of the refund claims based on the specific provisions of the notification in question.

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