2015 (5) TMI 881 - HC - Central Excise

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 and the Additional Duties of Excise (Textile 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 - The Finance Act levying the additional excise duty was enacted only in the year 1999, i.e., after first notification of the year 1994. - Decided against assessee.

Summary

Issues Involved:
1. Entitlement to exemption from additional duty of excise under the Finance Act, 1999.
2. Validity and legality of the orders dated 28.03.2007 and 08.05.2012 by lower courts.

Issue-wise Detailed Analysis:

1. Entitlement to Exemption from Additional Duty of Excise under the Finance Act, 1999:
The appellant, a 100% export-oriented unit (EOU), procured high-speed diesel (HSD) free of basic excise duty under an exemption notification dated 31.03.2003. The appellant contended that this notification also exempted them from the additional duty of excise (AED) levied under Section 133 of the Finance Act, 1999. The notification indeed exempted certain goods from excise duties under the Central Excise Act, 1944, and additional duties under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and the Additional Duties of Excise (Textile and Textile Articles) Act, 1978. However, the Finance Act, 1999, was not included in the notification. The court held that the exemption notification did not cover AED under the Finance Act, 1999, as it was not specified therein. This interpretation was supported by the Supreme Court judgment in Union of India vs. M/s Modi Rubber Ltd., which clarified that exemptions under Rule 8(1) of the Central Excise Rules, 1944, were limited to duties specified in the notifications and did not extend to duties imposed by subsequent finance acts unless explicitly stated. The court concluded that the appellant was not entitled to the exemption from AED under the Finance Act, 1999.

2. Validity and Legality of the Orders Dated 28.03.2007 and 08.05.2012:
The appellant challenged the orders dated 28.03.2007 and 08.05.2012 by the lower courts, which rejected their application for a refund of AED paid on HSD. The appellant argued that these orders were erroneous and not supported by law. The court examined the legal provisions and the relevant notification and found that the lower courts correctly interpreted the notification and the relevant statutes. The rejection of the refund application was upheld as the appellant was not entitled to the claimed exemption. The court emphasized that the notification's language and intent were clear in limiting the exemption to specific duties and did not include AED under the Finance Act, 1999. Therefore, the orders by the lower courts were deemed valid, legal, and not arbitrary or void.

Conclusion:
The court dismissed the appeals, affirming that the appellant was not entitled to the exemption from additional duty of excise under the Finance Act, 1999, and upheld the legality of the lower courts' orders. The appeals were dismissed without any order as to costs.