2013 (2) TMI 3 - AT - Central Excise

Whether education cess and higher education cess paid through PLA is refundable in terms of Notification No. 56/2002-C.E - Unit is located in the area specified Assessee is manufacture of transformers - For manufacture of transformers they also make HV/LV Coils - HV/LV Coils used in the repair of transformers Assessee paying Central Excise duty and to the extent the duty was being paid through PLA, they were getting its refund in terms of Notification No. 56/2002-C.E - Held that - Following the decision in case of MODI RUBBER LIMITED (1986 (8) TMI 60 - SUPREME COURT OF INDIA) that Notification No. 56/2002-C.E. does not cover the education cess. The Commissioner (Appeals) s order permitting the benefit exemption under Notification No. 56/2002-C.E. in respect of education cess and Secondary and higher education cess is not correct In favour of revenue Whether HV/LV Coils are excisable and whether the duty paid on the same is refundable in terms of Notification No. 56/2002-C.E. Held that - Following the decision in case of PUNJAB STATE ELECTRICITY BOARD (1994 (12) TMI 181 - CEGAT, NEW DELHI) that HV/LV coils made by assessee would have to be treated as non-excisable. Since no duty was payable in respect of HV/LV Coils, there is no question of extending the benefit of Notification No. 56/2002-C.E In favour of revenue

Summary

Issues:
1. Eligibility for exemption under Notification No. 56/2002-C.E. for HV/LV Coils used in transformer repairs.
2. Eligibility for exemption under Notification No. 56/2002-C.E. for education cess and higher education cess paid through PLA.

Analysis:

Issue 1:
The first issue revolves around whether the appellant is eligible for the benefit of exemption under Notification No. 56/2002-C.E. for HV/LV Coils used in transformer repairs. The department argued that HV/LV Coils are not excisable goods based on a Tribunal judgment upheld by the Apex Court. Initially, the Assistant Commissioner disallowed the exemption, but the Commissioner (Appeals) reversed this decision, holding that the coils are excisable, and duty was correctly paid, making it refundable under the notification. This dispute forms the basis of the appeals filed by the Revenue.

Issue 2:
The second point of contention concerns whether the appellant is entitled to the exemption under Notification No. 56/2002-C.E. for education cess and higher education cess paid through PLA. The Commissioner (Appeals) ruled in favor of the appellant, citing a Tribunal decision in a similar case. However, the department argued against this, relying on a different Tribunal judgment and the Apex Court's ruling in a related matter. The department contended that the notification does not cover education cess and higher education cess. This disagreement forms the second ground for the appeals filed by the Revenue.

Upon hearing both sides, the Tribunal analyzed the arguments presented. Regarding the first issue, the Tribunal found that the education cess and higher education cess are not covered under Notification No. 56/2002-C.E. as they are not specified in the exemption notification. The Tribunal referred to previous judgments to support this conclusion and set aside the Commissioner (Appeals)'s decision on this matter.

Concerning the second issue, the Tribunal noted that the excisability of HV/LV Coils had been previously decided against the appellant in a Tribunal judgment upheld by the Apex Court. As a result, the coils were deemed non-excisable, and thus, the benefit of Notification No. 56/2002-C.E. could not be extended to them. Consequently, the Tribunal ruled that the Commissioner (Appeals)'s decision on this issue was not sustainable.

In conclusion, the Tribunal set aside the Commissioner (Appeals)'s order permitting the refund of excise duty on HV/LV Coils and education cess paid through PLA under Notification No. 56/2002-C.E. The original Adjudicating Authority's decision on these matters was reinstated, and the Revenue's appeals were allowed.