2017 (8) TMI 516 - AT - Central Excise

Education cess - excess and short payments - levy of Education Cess on Paper Cess - Rule 8 (3A) of Central Excise Rules, 2002 - whether the appellant had paid Education Cess of ₹ 7,478/- in excess of their due from April, 2006 to July, 2006 and whether that will establish that for the month of July, 2006 they had not short paid Education Cess by ₹ 5000/-? - Held that - Education Cess is not levied on Paper Cess - from April, 2006 to July, 2006 exchequer had ₹ 7,478/- paid by the appellant towards Education Cess in excess of their due. Therefore, for the month of July. 2006 it doesn t establish that the appellant had short paid Education Cess to the tune of ₹ 5000/-. Once it is clear that there was no short payment of Education Cess the question of invocation of provisions of Rule 8 (3A) of Central Excise Rules, 2002 does not arise - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Short payment of Education Cess on MS Ingots
- Inclusion of Paper Cess in Education Cess calculation
- Excess payment of Education Cess by the appellant
- Applicability of Rule 8(3A) of Central Excise Rules, 2002

Short payment of Education Cess on MS Ingots:
The case involved a dispute regarding the short payment of Education Cess on MS Ingots by the appellant, leading to a demand for Central Excise Duty under Section 11A of the Central Excise Act, 1944. The Revenue alleged that the appellant had not paid the Education Cess of ?5000 by the due date, attracting the provisions of Rule 8(3A) of the Central Excise Rules, 2002. The matter was adjudicated through various orders, including a remand to the Original Authority for fresh consideration. The Tribunal ultimately found that the appellant had actually paid an excess amount of ?7478 towards Education Cess from April to July 2006, thereby refuting the claim of short payment for July 2006. Consequently, the invocation of Rule 8(3A) was deemed unnecessary, leading to the setting aside of the Order-in-Original and allowing the appeal for the appellant.

Inclusion of Paper Cess in Education Cess calculation:
During the proceedings, the appellant contended that Paper Cess should not be considered in the calculation of Education Cess, citing a precedent where a Coordinate Bench had ruled similarly. The Tribunal agreed with this argument, emphasizing that Education Cess is not levied on Paper Cess. This clarification played a crucial role in determining the excess payment made by the appellant and ultimately led to the decision in their favor.

Excess payment of Education Cess by the appellant:
The appellant had consistently maintained that they had paid an excess amount of ?7478 towards Education Cess from April to July 2006. This assertion was supported by documentary evidence and submissions during the proceedings. The Tribunal's analysis of the payment history and the legal position regarding the inclusion of Paper Cess confirmed the appellant's claim of overpayment, which played a pivotal role in the final judgment in their favor.

Applicability of Rule 8(3A) of Central Excise Rules, 2002:
The crux of the issue revolved around the applicability of Rule 8(3A) of the Central Excise Rules, 2002, concerning the clearance of goods without payment of duty. The Tribunal's decision to set aside the Order-in-Original was primarily based on the finding that there was no short payment of Education Cess by the appellant, thereby negating the need to invoke the provisions of Rule 8(3A). This determination was crucial in granting relief to the appellant and overturning the earlier decision.