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TMI Blog2023 (2) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the distinction in the phrases in section 2A of Central Excise Act, 1944 was not intended as mutually exclusive enumeration. The decision of the Tribunal in re Fosroc Chemicals India Pvt Ltd [ 2016 (1) TMI 21 - CESTAT BANGALORE ] was also about a dispute in which the other cess on the output of the units, entitled to the same area based exemption , was to be computed on the basic excise duty which was exempted. The distinction of automobile cess , in so far as not being a levy under Central Excise Act, 1944 and not levied on basic excise duty, with other cess , that are exempted owing to exemption of basic excise duty makes the position abundantly clear. Nothing further survives in the finding of the adjudicating authority in the impugned order as the discharge of automobile cess effaces coverage of rule 6 of CENVAT Credit Rules, 2004 to the output of the Rudrapur and Haridwar factories. Appeal allowed. - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Gajendra Jain, Advocate with Shri Rajesh Ostwal, Advocate for the appellant Shri Dhirendra Kumar, Joint Commissioner (AR) for the respondent ORDER The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Central Excise Act 1944. However Automobile Cess and Industrial Cess are imposed under Industries (development and Regulation) Act1951, Education Cess and The Secondary Higher Education Cess levied under Finance Act 2004 and Fianance Act 2007 respectively. Cess is the levy for some administrative expences/ particular purpose levied under different Act and collected by Central Excise department. Therefore the noticee contention that gooods manufactured at their Haraidwar and Rudrapur units are not exempted from payment of duty is misleading and they intentionally availed inadmissible Cenvat Credit of service Tax piad on the input Service which are attributable to their plants, the finished goods of which were exempted from payment of Central excsie duty contravening the provisions of Rule 7(b) of Cenvat Credit Rules,2004. 4. According to Learned Counsel for the appellant, the manufacturing unit at Kandivali is an undertaking of M/s Mahindra Mahindra Ltd, with their corporate office at Worli distributing credit of services procured in common for all three factories, and the disputed credit is limited to that distributed to the Kandivali undertaking in proportion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1944 and that, ironically, the appeal against the order of the Hon ble High Court of Uttarakhand was allowed by the Hon ble Supreme Court on the basis of the decision in re Bajaj Auto Limited approving the coverage of exemption to National Calamity Contingent Duty (NCCD), the Hon ble High Court of Bombay held that the principle laid down in re Bajaj Auto Limited would exclude automobile cess from the exemption as it was chargeable on value and not on basic excise duty, which was nil , thus 7(c). Ms. Cardozo, Learned Counsel for the Department, supports the Tribunal s conclusion. She relies on a Division Bench decision of Uttarakhand High Court in the case of Hero Motocorp Ltd. v. Commissioner of Central Excise - 2018 (14) GSTL 200 (Uttarakhand) to support it. In Hero Motocorp, the appellant before the Court was a manufacturer of motor cycles, which were exempt from payment of basic excise duty, but were subject to National Calamity Contingent Duty ( NCCD ), Education Cess ( EC ), and Secondary and Higher Education Cess ( SHEC ). The appellant adjusted Cenvat credit of duty paid on inputs against payment of NCCD, EC and SHEC. Uttarakhand High Court observed that NCCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not that these additional duties or cesses are not to be traced to the Act or are provided for by other enactments such as Finance Acts, or that they are levied as an increment, or are expressed as a proportion, to an existing tax (namely, basic duty of excise). After all, as the Supreme Court has explained in the case of Guruswamy Co. v. State of Mysore [(1967) 1 SCR 548], cess means nothing but tax and must be judged of in the same way as the validity of the tax (here, excise duty) to which it is an increment; and as for the taxing power of the State for its levy, it can be traced only to Entry 84 of Schedule VII to the Constitution, which is tax on manufacture of goods , i.e. excise duty. Besides, as explained in TVS Motor Co. Ltd. v. Union of India [2015 (323) ELT 57 (Kar.)] , the phrase duties of excise and duty of excise were used originally in the Act inter-changeably, namely, sometimes in plural and sometimes in singular. When the new term Cenvat came to substitute these terms as on 12 May 2000, in order to overcome the difficulty of replacing these words in the entire Act, Section 2A was introduced in the Act with effect from 12 May 2000 by Finance Act, 10/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance Bills and Acts, additional duty of excise levied under the Additional Duty of Excise (Goods of Special Importance) Act, 1957 and any other kind of duty of excise levied under any other Central enactment. The Supreme Court held that the expression duty of excise denoted only the basic duty of excise leviable under the Act and not the other duties. It was argued by the assessee before the Supreme Court that the expression duty of excise was one of large amplitude and in the absence of restrictive or limitative words indicating that it was intended to refer to only duty of excise leviable under the Act, it must be held to cover all duties of excise - whether leviable under the Act or any other enactment. The assessee contrasted the subject notifications with other notifications issued under the Act which specifically confined the exemption granted thereunder to duty of excise leviable under the Act unlike the subject notifications. The Court did not find much substance in this submission. The Court was of the view that it was not uncommon to find that the legislature, sometimes, with a view to making its intention clear beyond doubt, uses language ex abundanti coutela thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment could not be presumed to have projected its mind into the future and granted exemption in respect of excise duty which might be levied in future, without considering the nature and extent of such duty and the object and purpose for which such levy might be made and without taking into account the situation which might be prevailing then. The Court repelled the assessee s argument that 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 Act and the Rules made thereunder, including those relating to refunds and exemptions from duty, shall, as far as may be, apply in relation to levy and collection of such special duty of excise as they apply in relation to levy and collection of the duty of excise under the Act. The Court observed that undoubtedly, by reason of sub-section (4) of Section 32 of the Finance Act and similar provisions in other Finance Acts, Rule 8(1) would become applicable, empowering the Central Government to grant exemption from payment of special duty of excise, but whenever the Central Government exercised such power, it woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 8(1) of the Central Excise Rules. Rule 8(1) read with Rule 2(V) specifically covered only duty of excise under the Central Excises and Salt Act ; and the expression duty of excise used in the notification could not be given any extended meaning beyond what it bore under Rule 8(1) itself. (Incidentally, when the case of Hero Motocorp was carried in appeal by the assessee, the Supreme Court allowed the appeal, though that was on the ground that NCCD, as held by the Supreme Court in Bajaj Auto Limited v. Union of India [2019 (5) SCALE 325] = 2019 (366) ELT 577 (SC), was in the nature of excise duty and the assessee was, accordingly, entitled to the benefit of the exemption notification. The decision in Bajaj Auto Ltd. was, in turn, based on the case of SRD Nutrients Pvt. Ltd. v. Commissioner of C. Excise, Guwahati [2017 (335) ELT 481 (SC)]. In that case, the Supreme Court had held that Education cess being a surcharge on excise duty, payable as a percentage of value of central excise duty, i.e. basic excise duty, would partake the character of that very excise duty and was, accordingly, exempt under the notification applicable to units in North Eastern States, under w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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