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2015 (7) TMI 136 - HC - Central ExciseDenial of rebate claim on export of goods - whether payment of CESS would constitute duty and eligible for refund claim - Automobile Cess, Education Cess on Automobile Cess and Secondary and Higher Education Cess (for short SHE Cess) on Automobile Cess - Rule 18 of central excise Rules, 2002, read with notification No.19/04 -CE(NT) dated 06.09.2004 - Held that - For purpose of levy of Automobile Cess, value as defined in section 9(1) of Industries (Development and Regulation) Act, 1951 would not apply insofar as it applies to the valuation of goods to be made for the purposes of computation of Automobile Cess, Education Cess on Automobile Cess, SHE Cess on Automobile Cess to be levied and calculated as if it was excise duty as prescribed under Rule 3 of Automobile Cess Rules, 1984 - Explanation-I of the Notification 19/2004 acquires significance, whereunder the word duty has been defined for the purposes of said Notification to mean duties of excise collected under the enactments enumerated under Explanation-I. As to whether Automobile Cess, Education Cess on Automobile Cess and SHE Cess on Automobile Cess levied pursuant to levy of excise duty and paid on the goods exported can also be construed as duty and entitled to rebate or the authorities were right in rejecting the rebate claimed by petitioner on the ground that it is not a duty specified in Explanation-I to the notification or Cess levied and paid falls outside the purview of exemption Notification is the issue in question. It would indicate that the phrase duties of excise and duty of excise were used interchangeably namely sometimes in plural and sometimes in singular i.e., prior to 12.05.2000. However, said phraseology came to be substituted by new phrase viz., CENVAT with effect from 12.05.2000. In order to overcome the difficulty of replacing these words in entire Central Excise Act, 1944, Section 2A was introduced with effect from 12.05.2000 by Finance Act, 10/2000 whereunder expression duty , duties , duty of excise and duties of excise was to be construed to include a reference to Central Value Added Tax (CENVAT) . Thus, intention of the legislature is clear and an unambiguous. An exporter in order to claim the benefit flowing from the notification No.19/04 -CE (NT) dated 06.09.2004 will have to establish that the rebate claimed is in respect of the duty collected under the enactments enumerated thereunder and in the instant case, petitioner has clearly established that such duty has been levied and collected under the Central Excise Act, 1944 together with Cess. In view of the discussion with regard to Rule 3 of Automobile Cess Rules, 1984 it has to be necessarily held that provisions of Central Excise Act relating to levy and collection of duty as applicable would also be applicable to Cess levied under the Automobile Cess Rules, 1984 which came to be levied on the goods exported by petitioner by virtue of notification No.923(E) dated 28.12.1983 which came to be superseded by SO No.247(E) dated 22.03.1990 and therefore it has be necessarily held that Automobile Cess collected is duty of excise in terms of the provisions of the Central Excise Act, 1944 and thereby, Automobile Cess, Education Cess on Automobile Cess and SHE Cess on Automobile Cess is a duty of excise and is part of the duties paid by the petitioner and thereby petitioner is entitled to the rebate. - impugned order No.401- 404/2013 dated 20.05.2013 - Annexure - Z passed by fifth respondent would not be sustainable and petitioner would be entitled to the relief sought for. - Decided in favour of assessee.
Issues Involved:
1. Entitlement to refund of Automobile Cess, Education Cess on Automobile Cess, and Secondary and Higher Education Cess (SHE Cess) on Automobile Cess. 2. Applicability of Central Excise Act, 1944 provisions to the levy and collection of Automobile Cess. 3. Interpretation of "duty" under Notification No.19/04 -CE(NT) dated 06.09.2004. 4. Relevance of judicial precedents in similar contexts. Issue-Wise Detailed Analysis: 1. Entitlement to Refund of Automobile Cess, Education Cess on Automobile Cess, and SHE Cess on Automobile Cess: The petitioner sought the setting aside of the order denying the refund of Automobile Cess, Education Cess on Automobile Cess, and SHE Cess on Automobile Cess paid along with customs duty on exported goods. The primary contention was that these cesses are duties of excise and should be refundable under Rule 18 of the Central Excise Rules, 2002. The court examined the statutory provisions and previous judicial interpretations, concluding that these cesses are indeed duties of excise and thus eligible for rebate. 2. Applicability of Central Excise Act, 1944 Provisions to the Levy and Collection of Automobile Cess: The court analyzed Section 9 of the Industries (Development and Regulation) Act, 1951, and Rule 3 of the Automobile Cess Rules, 1984, which state that the provisions of the Central Excise Act, 1944, including those related to refunds, apply to the levy and collection of Automobile Cess. The court referenced the Supreme Court's decision in Tata Engineering and Locomotive Co., which affirmed that the value for cess calculation should be determined as if it were excise duty under the Central Excise Act. 3. Interpretation of "Duty" under Notification No.19/04 -CE(NT) dated 06.09.2004: The court scrutinized Explanation-I of the notification, which defines "duty" for the purposes of the notification to include duties of excise collected under specific enactments. The court held that the term "duties of excise" encompasses Automobile Cess, Education Cess on Automobile Cess, and SHE Cess on Automobile Cess, as these are levied and collected as duties of excise under the Central Excise Act, 1944. The court emphasized that the legislative intent was to include these cesses within the definition of "duty" for rebate purposes. 4. Relevance of Judicial Precedents in Similar Contexts: The court considered several precedents, including: - Barnagore Jute Factory Co. vs. Inspector of Central Excise: The Supreme Court held that cess levied under the Jute Cess Rules should be treated as a duty of excise. - Banaswara Syntex Ltd. vs. Union of India: The Rajasthan High Court ruled that Education Cess on excisable goods bears the same character as excise duty and is eligible for rebate. - Commissioner of C.Ex., Cus. and ST., Belgaum vs. Shree Renuka Sugars Ltd.: The Karnataka High Court held that Sugar Cess is a duty of excise and thus eligible for CENVAT credit. The court concluded that these precedents support the petitioner's claim that Automobile Cess, Education Cess on Automobile Cess, and SHE Cess on Automobile Cess should be treated as duties of excise eligible for rebate. Order: The court allowed the writ petitions, quashing the impugned order to the extent it held the rebate of Automobile Cess inadmissible. It directed the third respondent to process the rebate claims for Automobile Cess, Education Cess on Automobile Cess, and SHE Cess on Automobile Cess expeditiously within eight weeks.
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