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TMI Blog2015 (5) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... aw arise:- "(a) Whether the Courts below have erred in their orders dated 28.03.2007 and 08.05.2012, in as much as the provisions of the Notification No.22/2003 exempts the excise duty so imposed upon the appellant. (b) Whether the impugned orders are not supported by law and are thus illegal, arbitrary and void." 4. We, however, admit the appeal on the following substantial question of law framed as under:- Whether the appellant is entitled to exemption from additional duty of excise under the Finance Act, 1999 in view of a notification dated 31.03.2003 issued under Section 5A(1) of the Central Excise Act, 1944. 5. The appellant is a 100% export oriented unit (EOU). It procured goods free of excide duty under an exemption notification dated 31.03.2003 which itself was preceded by similar notifications issued since the year 1994. From April, 1999 to March, 2006, the appellant procured free of basic excise duty high speed diesel (HSD) from the Indian Oil Corporation under the said notification. The notification dated 31.03.2003, in so far as it is rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the impugned order of the CESTAT. 7. The appellant's contention that the exemption notification dated 31.03.2003 issued under the Central Excise Act also exempted it from payment of duty levied by Section 133 of the Finance Act, 1999, was rightly rejected by the Tribunal as not being well-founded. 8. Section 133 of the Finance Act reads as under:- "Section 133-(1) In the case of goods specified in the Second Schedule, being goods manufactured in India, there shall be levied and collected as an additional duty of excise an amount calculated at the rate set forth in the said Schedule. (2) The additional duty of excise referred to in subsection (1), shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, or any other law for the time being in force. (3) The provisions of the Central Excise Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the additional duty of excise leviable under this section in respect of any goods as they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79, which was relevant in that case, read as under:- "32. Special Duties of Excise.- (1) In the case of goods chargeable with a duty of excise under the Central Excises Act as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable there shall be levied and collected a special duty of excise equal to five per cent of the amount so chargeable on such goods. (2) Sub-section (1) shall cease to have effect after the 31st day of March, 1980, except as respects things done or omitted to be done before such cesser; and Section 6 of the General Clauses Act, 1897, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act. (3) The Special duties of excise referred to in subsection (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excises Act, or any other law for the time being in force. (4) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f excise leviable under the Central Excises and Salt Act, 1944, the Central Government made its intention abundantly clear by using appropriate words of limitation such as "duty of excise leviable ... under Section 3 of the Central Excises and Salt Act, 1944" or "duty of excise leviable ... under the Central Excises and Salt Act, 1944" or "duty of excise leviable ... under the said Act" as in the Notification No. CER-8(3)/55-C.E. dated September 17, 1955, Notification No. 255/77-C.E. dated July 20, 1977, Notification No. CER-8(1)/55- C.E. dated September 2, 1955, Notification No. CER-8(9)/55-C.E. dated December 31, 1955, Notification No. 95/61-C.E. dated April 1, 1961, Notification No. 23/55-C.E. dated April 29, 1955 and similar other notifications. But, here said the respondents, no such words of limitation are used in the two notifications in question and the expression "duty of excise" must, therefore, be read according to its plain natural meaning as including all duties of excise, including special duty of excise and auxiliary duty of excise. Now, it is no doubt true that in these various notifications referred to above, the Central Government has, while granting exemption und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to include special excise duty and auxiliary excise duty. ....... ...... ....... ....... 9. We have already pointed out, and this is one of the principal arguments against the contention of the respondents, that by reason of the definition of "duty" in clause (v) of Rule 2 which must be read in Rule 8(1), the expression "duty of excise" in the notifications dated August 1, 1974 and March 1, 1981 must be construed as duty of excise payable under the Central Excises and Salt Act, 1944. The respondents sought to combat this conclusion by relying on sub-section (4) of Section 32 of the Finance Act, 1979 - there being an identical provision in each Finance Act levying special duty of excise - which provided that the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder including those relating to refunds and exemptions from duties shall, as far as may be, apply in relation to the levy and collection of special duty of excise as they apply in relation to the levy and collection of the duty of excise under the Central Excises and Salt Act, 1944. It was urged on behalf of the respondents that by reason of this provision, Rule 8(1) relating to exemption fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty of excise, the recital of the source of power in the notification granting exemption has invariably been to Rule 8(1) read with the relevant provision of the statute levying special duty of excise or additional duty of excise, by which the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder including those relating to exemption from duty are made applicable. Take for example, the Notification bearing No. 63/78 dated August 1, 1978 where exemption is granted in respect of certain excisable goods "from the whole of the special duty of excise leviable thereon under sub clause (1) of clause 37 of the Finance Bill, 1978". The source of the power recited in this notification is "sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 read with sub-clause (5) of clause 37 of the Finance Bill, 1978". So also in the Notification bearing No. 29/79 dated March 1, 1979 exempting unmanufactured tobacco "from the whole of the duty of excise leviable thereon both under the Central Excises and Salt Act, 1944 and Additional Duties of Excise (Goods of Special Importance) Act, 1957", the reference to the source of power mentioned in the opening part of the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the notification itself makes it clear that the exemption was not to operate in respect of the additional excise duty levied under the Finance Act, 1999. 11. The judgment squarely applies to the case before us in almost every respect. It is also pertinent to note that the notification is dated 31.03.2003. It was preceded by similar notifications commencing from the year 1994. The notification was extended from time to time. The Finance Act levying the additional excise duty was enacted only in the year 1999, i.e., after first notification of the year 1994. In this regard, it is also pertinent to note the following observations of the Supreme Court in Union of India and others vs. M/s Modi Rubber Ltd. (supra):- "8. Moreover, at the date when the first notification was issued, namely, August 1, 1974, there was no special duty of excise leviable on tyres. It came to be levied on tyres with effect from the financial year 1978 under various Finance Acts enacted from year to year. It is therefore difficult to understand how the expression "duty of excise" in the notification dated August 1, 1974 could possibly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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