2008 (4) TMI 254 - HC - Central Excise

Whether Education Cess levied and collected under Section 91 of the Finance Act, 2004 can be considered as a duty of excise for the purpose of grant of refund in cash or by way of self credit under Notification No. 56/2002-CE above question is directly related to rate of duty, hence only remedy open to the Commissioner is to move the Supreme Court and this Court cannot entertain these applications under Section 35G appeal is dismissed as not maintainable

Summary

Issues:
1. Jurisdiction of High Court under Section 35G of the Central Excise Act, 1944.
2. Refund of Education Cess under Notification No. 56/2002-CE.

Issue 1: Jurisdiction of High Court under Section 35G of the Central Excise Act, 1944:

The petitioner, the Commissioner of Customs and Central Excise, filed petitions under Section 35G of the Central Excise Act, 1944, challenging orders of the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal had directed the refund of duty exempted for operationalizing the exemption and also the Education Cess, considering it as a piggyback duty. The main question raised was whether Education Cess could be considered a duty of excise for the purpose of refund under Notification No. 56/2002-CE. The respondents contended that the High Court did not have jurisdiction under Section 35G and that the proper remedy was to approach the Supreme Court under Section 35L. Various judgments were cited to support this contention, emphasizing that matters related to the rate of duty of excise fall under the jurisdiction of the Supreme Court, not the High Court. The Court examined the provisions of the Acts involved and the claims made by the respondents and concluded that the issue raised was directly related to the rate of duty of excise, falling under Section 35L, not Section 35G. Therefore, the Court upheld the preliminary objection and dismissed the applications, affirming that the High Court could not entertain the petitions under Section 35G.

Issue 2: Refund of Education Cess under Notification No. 56/2002-CE:

The case involved M/s. Bharat Box Factory Ltd. filing refund claims for Central Excise duty and Education Cess under Notification No. 56/2002-CE. The Assistant Commissioner had sanctioned the refund of Central Excise duty but rejected the Education Cess refund, stating it was not exempted under the notification. The Commissioner (Appeals) upheld this decision, leading to an appeal before the Appellate Tribunal. The Tribunal allowed the appeals, directing the refund of Education Cess as well, considering it a piggyback duty not leviable due to the exemption under the notification. The Court analyzed various judgments, including the Apex Court's interpretation of similar provisions in the Customs Act, and held that the question of whether Education Cess could be refunded under the notification was directly related to the rate of duty of excise for assessment purposes. Therefore, the Court concluded that the issue fell under Section 35L, not Section 35G, and dismissed the applications, upholding the Tribunal's decision to refund the Education Cess.

This detailed summary provides an analysis of the jurisdictional issue under Section 35G of the Central Excise Act, 1944, and the specific matter of refunding Education Cess under Notification No. 56/2002-CE, as addressed in the judgment of the High Court.