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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 ..... se Tariff Act, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d SHE 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 Rs. 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. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 57 ELT 3 (SC). It is further contended that Automobile Cess, Education Cess on Automobile Cess, Secondary and Higher Education Cess on Automobile Cess being one of the duties of excise being paid on the goods exported, rebate of Cess cannot be rejected on the ground that it does not find a mention in Explanation-I to Notification No.19/04 -CE(NT) dated 6.9.2004. It is further contended that prior to 12.05.2000, Central Excise Act provided for levy and collection of 'duties of excise' as indicated therein and with effect from 12.5.2000 the words "duty of excise" has been called as "Central Value Added Tax (CENVAT)" and throughout in Central Excise Act the phrase "duties of excise" and 'duty of excise' are use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Range Officer interalia stated that the rebate claim filed by the petitioner was within the time limit of one year as per section 11B of Central Excise Act and claim related to rebate of duty paid for export clearance and as such question of unjust enrichment does not arise. After orders being passed by the original authority for different periods it has resulted in appeals being filed and ultimately the revisional authority namely 5th respondent has disallowed the rebate claimed by the petitioner by order dated 20.05.2013 Annexure-Z which is impugned in the present writ petitions. It is to be noted at this juncture itself that claim for rebate of Automobile Cess as indicated at Sl.No.1 to 3 of column No.1 to the extent of quantification made in colum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 administrative expenses as may be prescribed." Rule 2 & 3 of Automobile Cess Rules, 1984 reads as under: "Rule 2 : Definitions.- In these rules, unless the context otherwise requires, - (a) xxx (b) xxx (c) 'Cess' means the cess levied and collected in terms of notification No.S.O.932(E), dated 28.12.1983 of Department of Heavy Industry issued under subsection (1) of Section 9 of the Act." "Rule 3. Application of Central Excise Act and the rules made thereunder.- Save as otherwise provided in these rules, the provisions of Central Excise Act, 1944 (1 of 1944), and the rules made thereunder including those relating to refund of duty, shall, so far as may be, apply in relation to the levy and collection of the cess as they apply in relation to the levy and collection of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification 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 section 136 of the Finance Act, 2001 (14 of 2001), as amended by section 169 of the Finance Act, 2003 (32 of 2003) and further amended by section 3 of the Finance Act, 2004 (13 of 2004); (e) special excise duty collected under a Finance Act; (f) additional duty of excise as levied under section 157 of the Finance Act, 2003 (32 of 2003); (g) Education Cess on excisable goods as levied under clause 81 read with clause 83 of the Finance (No.2) Bill, 2004. (h) the additional duty of excise leviable under clause 85 of the Finance Bill, 2005 the clause which has, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act 1931. (i) Secondary and Higher Education Cess on excisable goods leviable under clause (126) read with clause (128) of the Finance Bill, 2007, which has, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation 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 collection of the cess must, therefore, be made as if it was excise duty that was being calculated and applying the provisions of the Central Excises and Salt Act for the purpose. 7. Accordingly, the appeals fail and are dismissed, with no order as to costs". (Emphasis Supplied) 20. It has been held in the above case 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. 21. The Hon'ble Apex Court in the case of BARANGORE JUTE FACTORY COMPANY VS INSPECTOR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 23. When rival contentions are examined in the background of statutory provision namely Section 3 of Central Excise Act, 1944 it would indicate that prior to 12.05.2000 Excise Act provided for levy and collection of duties and phrases "duties of excise" and "duty of excise" were used interchangeably. For instance language employed in Section 3 was:- "There shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bile 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 Cess are not specified as duty under Explanation-I to notification and therefore such rebate claimed by petitioner came to be denied. 26. The levy of "Automobile Cess" is traceable to the charging Section namely, Section 9 of The Industries (Development and Regulation), Act, 1951. 27. Pursuant to above said power, Central Government by notification No.247(E) (Ministry of Finance) dated 22.03.1990 issued notification specifying the classes of goods manufactured on which a duty of excise shall be levied and collected as a Cess for the purposes of said Act namely, The Industries (Development & Regulation) Act, 1951, except those exported in accordance with the procedure prescribed under Chapter IX of Central Excise Rules, 1944. 28. In exercise of the power conferred under Section 30 of The Industries (Development & Regulation) Act, 1951 Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 collection is required to be determined by the Rules made in that regard. Further, Section 30 of the above said Act empowers the legislature to make Rules and pursuant to the same, Automobile Cess Rules, 1984 has been enacted and Rule 3 of the said Rules at the cost of repetition has to be noted and plain reading of said rule indicate that provisions of Central Excise Act, 1944 is applicable for the collection of Cess as a duty of excise . Thereby, 'Cess' is a duty of excise collected in terms of Central Excise Act, 1944. Hence, this Court is in respectful agreement with the view expressed by Rajasthan High Court in Banswara Syntex Limited. 33. The High Court of Rajasthan in the case of BANSWARA SYNTEX LTD., VS. UNION OF INDIA reported in (2007) 216 ELT 16 (Raj.) while examining as to whether Education Cess levied on excisable goods would bear the same character as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise, 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 Finance Act, 2004 in terms of existing Notification dated 26-06-2001 immediately. Later Notification including the Education Cess in enumerative definition in the circumstances was only clarificatory and by way of abundant caution, but not a new rebate in relation to Excise Duty or any part thereof as statutorily pronounced as well as specified Excise Duty levied and collected under the Finance Act. 19. The order of appellate authority as well as revisional authority disallowed the rebate on excise duty payable by the petitioner as surcharge levied on excise duty named as "Education Cess" for the purpose of appropriating the same for specific project of the Government in funding universalised quality basic education cannot be sustained. If we read Section 93 as a whole, it becomes clear that existing Notification providing exemption to the Duty of Excise is otherwise applicable to Educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 has been further held that notification dated 06.09.2004 had included the definition of excise duty only in consonance with the meaning of excise duty as was existing on the date notification was issued, even if Explanation would not have been there the term Duty of Excise in ordinary circumstance would have included the surcharge levied as Education Cess in terms of Section 93 of the Act of 2004. In that view of the matter, this court is of the considered view that revisional authority erred in arriving at a conclusion that the ratio laid down by the Rajasthan High Court would be inapplicable to the facts on hand. 35. Yet another factor which cannot go unnoticed is that Rule 3 of the Automobile Cess Rules provides for that issues relating to refund of duty shall be applicable to the levy and collection of Cess. Since the provisions of Central Excise Act, 1944 would apply to the Cess collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the pen or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all." 26. Any cess levied and collected in order to constitute a fee after such collections should go into a special fund earmarked for carrying out the purpose of the Act. The said fund so set apart should be appropriated specifically for the performance of the specified purpose and it should not be merged in the public revenues. In other words, the cess levied by way of fee is not intended to be and does not become a part of the Consolidated Fund. It should be earmarked and set apart for the purpose of services for which it is levied. Then only it should be described as a fee and not tax. If the cess levied and collected is credited to the Consolidated Fund of India and it has to be appropriated by the Parliament by law and then only the said amount could be credited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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