2009 (8) TMI 812 - AT - Central Excise

Refund - Notification No. 56/02, dated 14-11-2002 - assessees were permitted to avail the benefit under the said notification either by way of payment of utilizing cenvat credit or by way of duty in cash or in PLA account - It is settled law that the meaning of any term in a taxing statute cannot be understood with reference to even similar term used in the different taxing statute - Once the expression used in the notification clearly discloses that the benefit thereunder are available to the duties leviable under the statues under which the notification has been issued and not to a duty levied under any other enactment, irrespective of the fact that such duty may be of similar in nature, it goes without saying that the benefits under notification would be restricted to the duty paid under the statues under which the notification has been issued - in terms of the notification in question, there was no prohibition for levy and collection of education cess or higher education cess in respect of the levy and payment of excise duty and additional excise duty pertaining to the goods which were entitled for the exemption benefit under the said notification - Decided against the assessee

Issues Involved:
1. Refund of education cess and higher education cess along with excise duty under Exemption Notification No. 56/2002.
2. Interpretation of the scope and applicability of the exemption notification.
3. Whether education cess and higher education cess are covered under the exemption notification issued under specified enactments.

Issue-wise Detailed Analysis:

1. Refund of Education Cess and Higher Education Cess:
The central issue in these appeals was whether the education cess and higher education cess, paid along with excise duty under Exemption Notification No. 56/2002, are refundable. The assessees claimed refunds of these cesses along with the excise duty, which the Assistant Commissioner initially rejected. However, the Commissioner (Appeals) allowed the refund, prompting the Department to appeal.

2. Interpretation of the Scope and Applicability of the Exemption Notification:
The notification in question was issued under Section 5A(1) of the Central Excise Act, 1944, and other related enactments. It provided exemptions for goods manufactured in specified areas from excise duty and additional excise duty. The notification did not explicitly mention education cess or higher education cess, which are imposed under the Finance Act. The Department argued that since the notification did not reference the Finance Act, it could not extend to duties imposed under it, including education cess.

3. Whether Education Cess and Higher Education Cess are Covered under the Exemption Notification:
The Tribunal examined the language of the notification, which specified exemptions for duties under the Central Excise Act and related statutes but not under the Finance Act. The Tribunal noted that the education cess and higher education cess are calculated based on the aggregate of all duties of excise levied and collected. The Tribunal emphasized that the notification did not provide for an absolute exemption but rather a refund mechanism for duties paid in cash or through the PLA account.

The Tribunal concluded that the notification did not cover education cess and higher education cess, as these are levied under a different statute (the Finance Act). The Tribunal relied on the principle that exemption notifications must be interpreted strictly and cannot be extended beyond their explicit terms. The Tribunal also referred to various judicial precedents, including the Supreme Court's decision in Union of India v. Modi Rubber Limited, which held that exemptions under one statute do not automatically extend to duties under another statute unless explicitly stated.

Conclusion:
The Tribunal found that the education cess and higher education cess were lawfully levied and collected in accordance with the Finance Act, and the exemption notification did not cover these cesses. Consequently, the Tribunal set aside the orders of the Commissioner (Appeals) and restored the original orders, denying the refund of education cess and higher education cess. The appeals by the Department were allowed, and the assessees' claims for refunds of these cesses were rejected.

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