9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 962 - HC - Central ExciseLevy of excise duty and NCCD under the Central Excise Act, 1944 - levy and collection of National Calamity Contingency Duty (NCCD for short) on tobacco and tobacco products - Whether after coming into force of Constitutional 101st Amendment Act, w.e.f 01.07.2017, the levy of Basic Excise Duty and levy of NCCD which is a duty of excise on tobacco and tobacco products is constitutionally valid? - simultaneous levy of GST under Article 246-A and levy of basic excise duty and NCCD under Article 246 qua tobacco and tobacco products - Excise duty has been levied on a separate and distinct aspect namely manufacture of tobacco products or not? - levy of NCCD as surcharge on tobacco products - levy of excise duty on tobacco and tobacco products is violative of Article 14 of Constitution of India or not? HELD THAT - It is a well settled rule of statutory interpretation that a non-obstante clause is appended to provision in the beginning with a view to give the enacting part of the Section, in case of a conflict, an overriding effect over the provision or Act mentioned in the non-obstante clause. It is equivalent to saying that in spite of provision of Act mentioned in the non-obstante clause, the enactment, following it, shall have its full operation or that the provisions embraced in non-obstante clause will not be an impediment for operation of the enactment - Article 246 (1) and (2) as well as Article 246A (1) begins with non-obstante clause. In Article 246-A (1), the expression 'subject to' has also been used. The said expression means as one conveying a limitation/restriction on the exercise of power. The said expression neither circumscribes power nor enlarges the same. It is evident that the power under Article 246-A is an independent power and can be exercised not withstanding anything contained in Article 246 and Article 254. Article 246-A is unique as it contains the source of power as well as field of legislation and therefore, the the same is held to be simultaneous power of taxation - In the instant case, the levy of excise duty on tobacco and tobacco products under Entry 84 List I read with Article 246 is independent and co-exists without being impacted by the levy of GST on the same product under Article 246-A as both the Articles are mutually exclusive of each other and can coexist. The Central Excise duty and GST are levied under different sources of power and fields of legislation and do not overlap each other in any manner. For the aforementioned reasons, the issue whether after coming into force of Constitutional 101st Amendment Act, w.e.f 01.07.2017, the levy of Basic Excise Duty and NCCD which is a duty of excise on tobacco and tobacco products is constitutionally valid, is answered in the affirmative. Article 245 and 246 of the Constitution describe the source of power and classify the same into three categories. In contrast Article 246A does not envisage a sole power either to the Union or to the States - the Central Excise Duty and GST have distinct sources of power and fields of legislation and therefore, do not overlap each other. It is pertinent to note that in the writ petition, there are no pleadings that action of levy of excise duty on tobacco and tobacco products amounts to hostile discrimination and is violative of Article 14. In the memorandum of appeal, it has been stated that tobacco and tobacco products are the only goods which have been singled out for hostile and discriminatory treatment subjecting it to two regimes of indirect taxations and therefore, it is violative of Article 14 - The levy of excise duty on tobacco and tobacco products is a matter of public policy and this Court in excise of writ jurisdiction would not interfere with the same. The appellants have failed to demonstrate that levy of excise duty either suffers from manifest arbitrariness or is discriminatory. Accordingly it is held that the levy of excise of duty of tobacco and tobacco products is not violative of Article 14 of Constitution of India. Appeal dismissed.
Issues Involved:
1. Constitutionality of the levy of Basic Excise Duty and National Calamity Contingent Duty (NCCD) on tobacco and tobacco products post-GST regime. 2. Simultaneous levy of GST under Article 246-A and Basic Excise Duty and NCCD under Article 246 on tobacco and tobacco products. 3. Distinct aspect of levy of excise duty on the manufacture of tobacco products. 4. Validity of NCCD as a surcharge on tobacco products. 5. Levy of excise duty on tobacco and tobacco products in relation to Article 14 of the Constitution of India. Detailed Analysis: 1. Constitutionality of the Levy of Basic Excise Duty and NCCD: The court held that the power under Article 246-A is independent and can be exercised notwithstanding anything contained in Article 246 and Article 254. Article 246-A embodies the principle of simultaneous levy and does not result in the denudation of power under Article 246. The levy of excise duty on tobacco and tobacco products under Entry 84 List I read with Article 246 is independent and co-exists without being impacted by the levy of GST on the same product under Article 246-A. Therefore, the levy of Basic Excise Duty and NCCD post-GST regime is constitutionally valid. 2. Simultaneous Levy of GST and Excise Duty: The court observed that Article 246 and Article 246-A operate in different spheres and do not overlap. The Central Excise Duty and GST are levied under different sources of power and fields of legislation. The aspect doctrine was applied, which allows for the same transaction to involve multiple taxable events in its different aspects. Thus, simultaneous levy of GST and excise duty on tobacco and tobacco products is permissible. 3. Distinct Aspect of Levy of Excise Duty: The court noted that excise duty under Entry 84 List I has a source of power to tax under Article 246 of the Constitution and is levied on a distinct aspect, namely the manufacture of tobacco products. The levy of GST is traceable to a different source of power, Article 246A, on a different aspect, namely the supply of tobacco and tobacco products. The activities of manufacture and supply remain independent in the goods chain. 4. Validity of NCCD as Surcharge: The court referred to Section 136 of the Finance Act, 2001, which provides for the levy of NCCD. It was held that NCCD is a surcharge and can be levied simultaneously with GST and excise duty on tobacco products. The court distinguished the case from previous judgments like BAJAJ AUTO and SRD NUTRIENTS, noting that those decisions did not consider the binding precedent set by the Supreme Court in MODI RUBBER. Therefore, the levy of NCCD as a surcharge on tobacco products is valid. 5. Levy of Excise Duty and Article 14: The court reiterated that a levy imposing tax is not immune from attack on the ground of violating Article 14 but emphasized the wide discretion the legislature has in matters of taxation. The court found no pleadings in the writ petition that demonstrated the levy of excise duty on tobacco and tobacco products amounted to hostile discrimination or was violative of Article 14. The court held that the levy of excise duty on tobacco and tobacco products is a matter of public policy and does not suffer from manifest arbitrariness or discrimination. Therefore, it is not violative of Article 14. Conclusion: The appeal was dismissed, upholding the constitutionality and validity of the levy of Basic Excise Duty and NCCD on tobacco and tobacco products post-GST regime, allowing for simultaneous levy under different constitutional provisions, and rejecting claims of violation of Article 14.
|
