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TMI Blog2015 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1985 (for short 'CETA') and is registered under the provisions of the Central Excise Act, 1944 and has cleared the vehicles/goods to their plant at Hosur on payment of duty. It is not in dispute that petitioner's Hosur plant had not availed CENVAT credit against the consignments which were removed to the Hosur plant. It is also not in dispute that said two wheelers which were cleared were exported to various countries and had issued the disclaimer certificate to enable the petitioner to claim rebate of duty paid on two wheelers in respect of which petitioner had paid duty at the time of removal of the goods. Hence, petitioner filed a rebate claim under Rule 18 of the Central Excise Rules, 2002 in respect of the duty paid on clearance of the goods which came to be exported from Hosur plant. The jurisdictional Range Officer by his report interalia stated that the rebate claim was filed within the time limit of one year as per Section 11B and it was also certified that duty debit particulars furnished by the petitioner had been verified and found to be in order. 3. Third respondent passed an order on 10.04.2007 (Annexure-B) whereunder part of the rebate of Automobile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E Cess to the petitioner by order dated 13.07.2009. Aggrieved by this order dated 01.06.2009 Department filed a revision application in reference No.198/133/09- RA-CX before the Ministry of Finance (Department of Revenue). Hence, show cause notice dated 17.05.2010 came to be issued to the petitioner to recover an amount of ₹ 1,67,906/- being erroneous rebate already sanctioned on the ground that reference application has been decided by the Ministry in favour of the Department. Reply given to show cause notice came to be considered and the Deputy Commissioner rejected the rebate claim of the petitioner. Appeal came to be filed against this order. 5. Thereafter, respondents have issued show cause notice dated 25.06.2010 on the ground that the Department has challenged the order dated 01.06.2009 before the revisional authority and demanded the petitioner to refund the rebate granted. Reply came to be submitted to the said show cause notice which came to be adjudicated by upholding the show cause notice and appeal filed against said order came to be rejected vide order dated 09.08.2012. Revision petition filed against said order before fifth respondent is said to be pending. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. I have heard the arguments of Sriyuths Shivadass, learned Advocate appearing for petitioner and N.R.Bhaskar, learned Standing Counsel appearing for respondents. 9. It is the contention of Sri Shivadass, learned counsel appearing for petitioner that Automobile Cess, Education Cess on Automobile Cess and Secondary and Higher Education Cess on Automobile Cess is levied under Section 9 of the Industries (Development Regulation) Act, 1951 read with Rule 3 of Automobile Cess Rules, 1984 and said rule would indicate that provisions of Central Excises and Salt Act, 1944 and Rules made thereunder including those relating to refund of duty to the levy and collection of cess is applicable and as such, it is evident that Central Excise Act, 1944 and Rules made thereunder will apply in relation to levy and collection of Cess as they apply in relation to the duty of excise. 10. It is contended that under the impugned order it has been held by the Revisional Authority that provisions of Central Excise Act alone would be applicable and this is an erroneous finding and contrary to the law laid down by the Hon'ble Apex Court in (1997) 92 ELT 303 (SC) and (1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and others (2) 1991 (53) ELT 408 (Tribunal) - Collector of C.Ex. Vs Mahindra and Mahindra Ltd. (3) 1987 (31) ELT 209 (Tribunal) - Nellimarla Jute Mills Vs Collector of Central Excise, Guntur BRIEF BACKGROUND OF THE CASE: 13. It is not in dispute that petitioner is engaged in the manufacture of motor cycles/Two wheelers of different types falling under Chapter 87 of First Schedule to the Central Excise Tariff Act, 1985. Petitioner is having two units namely one at Mysore and one at Hosur. The vehicles on being manufactured at Mysore was transferred from their Mysore Unit to Hosur Unit on payment of excise duties. Subsequently two wheelers were exported to various countries from Hosur Unit. The Hosur Plant of petitioner has issued the disclaimer certificate in favour of their Mysore Unit to enable the petitioner to claim rebate of duty paid on two wheelers exported in respect of which petitioners had paid duty at the time of removal of the goods. 14. Petitioner lodged rebate claims under Rule 18 of the Central Excise Rules, 2002 in respect of duty paid on the clearance of the goods, which were exported from Hosur Plant. The compliance report of the jurisdictional Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount and the amount of duty then payable. (2) The cess shall be payable at such intervals within such time and in such manner as may be prescribed, and any rules made in this behalf may provide for the grant of a rebate for prompt payment of the cess. (3) The said cess may be recovered in the same manner as an arrear of land revenue. (4) The Central Government may hand over the proceeds of the cess collected under this section in respect of the goods manufactured or produced by any scheduled industry or group of scheduled industries to the Development Council established for that industry or group of industries, and where it does so, the Development Council shall utilise the said proceeds - (a) to promote scientific and industrial research with reference to the scheduled industry or group of scheduled industries in respect of which the Development Council is established; (b) to promote improvements in design and quality with reference to the products of such industry or group of industries; (c) to provide for the training of technicians and labour in such industry or group of industries; (d) to meet such expenses in the exercise of its functions and its adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or duty paid on materials used in the manufacturing or processing of such goods when they are exported, by issuance of notification prescribing such conditions or limitations and fulfillment of such procedure to claim rebate. In exercise of power vested under Rule 18 of Rules 2002 Central Government has issued notification No.19/2004 -CE(NT)dated 06.09.2004 granting rebate of whole of the duty paid on excisable goods falling under First Schedule to CETA exported to any country other than Nepal and Bhutan, subject to the conditions, limitations and procedures specified thereunder. A perusal of said notification dated 6.9.2004 would indicate that duty for the purposes of said notification would mean as specified in Explanation-I which reads as under: Explanation-I - Duty for the purpose of this Notification means duties of excise collected under the following enactments, namely: (a) the Central Excise Act, 1944(1 of 1944); (b) the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (c) the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (d) the National Calamity Contingent duty leviable under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion value and states that it shall be deemed to be the wholesale cash price for which such goods of the like kind and quality are sold or are capable of being sold for delivery at the place of manufacture and at the time of their removal therefrom without any abatement or deduction whatever, except trade discount and the amount of duty then payable. The opening words of the Explanation make it clear that it defines the expression value thus only for the purposes of Section 9(1). 6. The definition of the expression value for the specific purpose of Section 9(1) does not, therefore, apply to the valuation of goods to be made for the purposes of computation of the cess under the said notification. In other words, in calculating 1/8 per cent ad valorem, the value of the goods is not to be determined as set out in the Explanation to Section 9(1). For this purpose, what is relevant is Rule 3 of the Automobile Cess Rules, 1984, which states that the provisions of the Central Excises and Salt Act shall apply so far as may be in relation to the levy and collection of the cess. The calculation of 1/8 per cent ad valorem of the motor vehicle for the purposes of the levy and collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indra. The facts of that case are: xxx well settled proposition that if a subsequent act xxx at all But, the language of Rule 3 of Jute Cess Rules is altogether different. It indicates a continuing applicability of the provisions of the Central Excise Act and the Rules. What was levied was a 'duty of excise' and it was to be levied and collected in accordance with the provisions of the Central Excise Act and the Rules. The effect is as if the words 'for the time being in force' were there after the words 'the provisions of Central Excises Act and Salt Act, 1944 (1 of 1944) and the Rules made thereunder in Rule 3. We are, therefore, of the opinion that the amendment of rule 9 and 49 made in 1982 (with retrospective effect from 1944) is equally applicable in the matter of levy and collection of cess under the Act. The contentions xxx in Bhatinda Improvement Trust Board Vs Balwant Singh . (Emphasis Supplied) 22. In this background 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 Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, intention of the legislature is clear and an unambiguous and the purpose of introduction of Section 2A was two(2) fold viz., (i) To minimize the amendments to be carried out in entire Central Excise Act, 1944 by replacing the phrases earlier used in the Act with the words 'CENVAT', and (ii) Not to create any distinction between various phrases used in Central Excise Act, 1944. Thus, it would clearly indicate that there can be no distinction between the phrases 'duty', 'duties', duty of excise and duties of excise . 25. The rebate of duty to be paid on exported goods is allowable under Rule 18 of the Central Excise Rules, 2002 read with notification No.19/04 -CE(NT) dated 06.09.2004 as already noticed hereinabove. In the instant case, Automobile Cess , Education Cess on Automobile Cess and SHE Cess on Automobile Cess levied and paid was claimed by way of rebate on the exported goods and same has been denied on the ground that as per Explanation-I it is only the duties of excise specified in clause (a) to (i) of exemption notification dated 06.09.2004 which is allowable and can be rebated and Automobile Cess , Education Cess and SHE Ces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act, 1944 in the notification dated 06.09.2004 would also include Cess collected as a duty of excise. That apart, automobile Cess cannot be levied on the goods exported or in other words, when it is levied and rebate is claimed are required to be refunded when the goods are so exported. 31. The expression duty used in Rule 18 of the Central Excise Rules, 2002 would include such of those duties levied under Section 3 of the Central Excise Act, 1944 which includes the Cess defined under Rule 2(c) of Automobile Cess Rules, 1984. To put it in a different manner, Rule 18 does not indicate that rebate can be granted in respect of any duty other than duty levied under Section 3 of the Central Excise Act, 1944. As such, the Automobile Cess, Education Cess on Automobile Cess and SHE Cess on Automobile Cess though not expressly specified under notification dated 06.09.2004 would encompass within its sweep to include these Cess within the definition of phrase 'duty'. 32. Yet another factor which requires to be noticed is, Section 9 of The Industries (Development Regulation) Act, 1951 provides for levy and collection of Automobile Cess and the manner of collectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of surcharge is levied collected. 16. Apparently, when at the time of collection, surcharge has taken the character of parent levy, whatever may be the object behind it, it becomes subject to the provision relating to the Excise Duty applicable to it in the manner of collecting the same obligation of the tax payer in respect of its discharge as well as exemption concession by way of rebate attached with such levies. This aspect has been made clear by combined reading of sub-sections (1), (2) (3) of Section 93. 17. It is not xxxx export of its product. 18. The Explanation appended to Notification dated 26-6-2001 included within the ambit of Excise Duty any special Excise Duty collected under any Finance Act when under Finance Act, 2004 it was ordained that Education Cess to be collected as surcharge on Excise Duty payable on excisable goods and shall be a Duty of Excise, it became a special Duty of Excise by way of Education Cess chargeable and collected under Finance Act, 2004 and fell within the ambit of clause (3) of Explanation, appended to Notification dated 26-06-2001. Consequently, rebate became available on collection of surcharge on Excise Duty under Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made absolute. 34. Thus, it can be seen from the above Judgment rebate of Education Cess denied by the authorities came to be allowed on the ground that the Education Cess is statutorily collected as duty of excise along with excise duty bearing the same character as excise duty. However, the revisional authority has held that the issue of admissibility of rebate claim of Education Cess which came to be considered by the Hon'ble High Court of Rajasthan was in the context of Section 91, 92 and 93 of Finance Act, 1994 and Section 93 of the Finance Act specifically says that Education Cess levied under section 91 shall be a duty of excise. However, the revisional authority has lost sight of the fact that Education Cess collected in Banswara Syntex Limited Case was as part of customs duty under three different enactment which indicated that the scheme of levy of Education Cess was by way of collecting special funds for the purpose of Government project towards providing and financing universalised quality of basic education by enhancing the burden of central excise duty, customs duty and service tax by way of charging surcharge to be collected for the purpose of union. It h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act . Further, subsection (4) makes it clear that the provisions of the Central excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty shall, so far as may be, apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on sugar under that Act. In other words, the provisions of the Central Excise Act and the Rules made thereunder are read into the Act. Levy and collection of cess under the Act is treated as levy and collection of a duty of excise on sugar under the Central Excise Act. 13. The effect of such incorporation is clear from the judgment of the Supreme Court in Bagmane Jute Factory Co. v. Inspector of Central Excise, 1992 (57) E.L.T. 3 (S.C.), wherein the observations made by Lord Esher M.R. in 1886 31 Chancellary Division 607/615 were refereed to in para 18 of the judgment which reads as under: If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that Act, as has been held, is to write those Sections into the new Act just as if they had been actually written in it with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts 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 aforesaid 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. 38. For the reasons aforestated, this Court is of the considered view that impugned order No.401- 404/2013 dated 20.05.2013 - Annexure - Z passed by fifth respondent would not be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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