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TMI Blog2011 (7) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... /618/2010 - 407/2011-EX(PB) - Dated:- 29-7-2011 - Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. REPRESENTED BY : Ms. Sukriti Das, Advocate, for the Appellant. Shri I. Beg, DR, for the Respondent. [Order per : Rakesh Kumar, Member (T).]. This appeal has been filed by M/s. Kumar Arch Tech Pvt. Ltd., Udaipur (the appellants) against the OIA No. 449 (KKG) CE/JPR-II/2009, dated 13-11-2009. The appellants, a 100% EOU, are manufacturer of PVC sheets falling under Chapter sub-heading No. 39211900 of the Schedule to the Central Excise Tariff Act, 1985. It has been alleged in the SCN issued to the appellants that they had not paid Education Cess @ 2%, amounting to Rs. 1,02,473/-, on DTA clearances of their finished product. 2. The Adjudicating Authority, vide O-I-O Nos. 87 to 89/2008-C.E., (Dem.) dated 22-10-2008, held that on DTA clearances by a 100% EOU, duty is leviable under the proviso to sub-section (1) of Section 3 of the Central Excise Act, 1944 which prescribed it to be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force on the like goods produced or manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole of customs duty under Section 94 under of the Finance. Act is added, the question of adding the education cess under Section 93 of Finance Act does not arise. It is the contention of the DR that the observation of the Hon ble Tribunal in the case of Sarla Performance Fibres Ltd., is not correct. The Education Cess is leviable on Customs duty as well as Central Excise duty separately in terms of Sections 93 and 94 respectively of the Finance Act, 2004. Section 3 of Central Excise Act, 1944 stipulates levy and collection of Central Excise duty only. This is also confirmed by the Larger Bench of Hon ble Tribunal in the case of Vikram Ispat v. C.C.E., Mumbai-III reported as 2000 (120) E.L.T. 800 (Tribunal - LB), wherein it is clearly held that the nature of duty envisaged under Section 3 is Excise duty and nothing else. The said Section also prescribes the measure of Excise duty which is the aggregate of the duties of custom leviable under Customs Act, 1962 or another law for the time being in force, on like goods produced or manufactured outside India and imported into India. Therefore, once Excise duty is computed in the manner laid down under Section 3 of CEA, 1944 read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in terms of Sections 93 and 94 of the Finance (No. 2) Act, 2004, it would be appropriate to refer to those Sections which are extracted below : 93. Education Cess on excisable goods. (1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act,. 1944 (1 of 1944) or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate of two per cent., calculated on the tax which is levied and collected under section 66 of the Finance Act, 1994 (32 of 1994). (2) The Education Cess on taxable services shall be in addition to the tax chargeable on such taxable services, under Chapter V of the Finance Act, 1994 (32 of 1994). (3) The provisions of Chapter V of the Finance Act, 1994 (32 of 1994) and the rules made thereunder, including those relating to refunds and exemptions from tax and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under Chapter V of the Finance Act, 1994 or the rules, as the case may be. From the above, it can be seen that Education Cess is levied in the following cases : (i) in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced; (ii) in the case of goods specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), being goods imported into India; and (iii) in the case of all services which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). A plain reading of the above provisions makes it amply clear that it lays down the manner of levy and collection of the duty of Excise. It has rightly been pointed out by Ld. DR that the Larger Bench of this Tribunal in the case of Vikram Ispat v. C.C.E., Mumbai-III reported as 2000 (120) E.L.T. 800 (Tribunal - LB), has held that the nature of duty envisaged under Section 3 is Excise duty and nothing else. The said Section also prescribes the measure of the Excise duty so far as 100% EOUs are concerned which would be the aggregate of the duties of Customs payable on import of like goods in India. Merely because the measure of duty is the aggregate of the duties of Customs, it does not mean that the nature of duty becomes Customs duty. It remains duty of Excise only. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter All goods Duty of excise leviable thereon as is equivalent to the special additional duty of customs leviable on such goods under section 3A of the Customs Tariff Act, 1975 (51 of 1975) read with proviso to sub-section (1) of section 3 of the said Central Excise Act, 1944. 1 2. Any Chapter All goods In excess of the amount equal to fifty per cent of the duty leviable under section 3 of the Central Excise Act : Provided that the duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside the export oriented undertaking. Electronic Hardware Technology Park unit or Software Technology Park unit, which is specified in the said Schedule read with the any other relevant notification issued under sub-section (1) of section 5A of the Central Excise Act : Provided further that nothing contained in the first proviso shall apply to the goods which are chargeable to Nil rate of duty 2 leviable under section 12 of the Customs Act, 1962 read with any other notification for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of excise duty equal to customs duty would not arise and therefore there would be no education cess also. However, Ld. DR has drawn our attention to the decision of the Hon ble High Court of Himachal Pradesh in the case of Indo Farm Tractors Motors Ltd. v. Union of India reported as 2008 (222) E.L.T. 184 (H.P.). It has been held by the Hon ble High Court in para 17 as under : - The contention of the petitioner that the Education cess is levied @ 2% of the aggregate of the duties and since the petitioner has been exempted from paying excise duty, this 2% cess cannot be calculated is not tenable. The excise duty can always be calculated even if it is not collected and on this notional calculation, the education cess can be calculated. This cess has to be collected in terms of the Finance Act. The above observation of the Hon ble High Court is in total contrast with the views expressed by the Tribunal. 12. For the reasons stated above, we do not find ourselves in agreement with the findings of the Tribunal in Sarla Performance case supra. Besides, we also notice a contrary decision of Tribunal in the case of Sarla Polyester case reported as [2008 (226) E.L.T. 238 (Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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