9911796707
TMI Blog1981 (9) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... oods cleared during the case year, which is the official year 1964-65 in respect of existing undertaking and as respects other undertakings the first year in which they commence product. It also defines "duty of excise" as excise duty leviable under the Central Excises and Salt Act, 1944 (Act 1 of 1944). Section 280ZD empowers the Central Govt. to frame one or more schemes to called 'tax credit certificate schemes'. 4. Accordingly, a scheme under notification No. 1636, dated 5-11-1965 has been framed, wherein the class of goods and the rate of tax credit certificate are mentioned in Schedule I. Item 3 of the said Schedule relates to "paper, all sorts, other than (i) newsprint and (ii) boards, ......" falling under item 17 of the First Schedule to the Central Excises and Salt Act, 1944 and the corresponding rate of tax credit is 15%. 5. By Section 3(1) of the Central Excises and Salt Act, 1944, duties of excise shall be payable on all excisable goods at the rates set forth in the First Schedule to the Act. The First Schedule enumerates the excisable goods under different items. Item 17 of the Schedule gives the description of goods "paper (all sorts) in or in relation to the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Excise Duty on the excess clearance Rs. 1,79,901.93 8. However the Deputy Director of Inspection (2nd respondent herein) granted tax credit certificates for Rs. 49,565/- and Rs. 24,823/- respectively for the said two years. This was worked out by setting off the deficit under item 17(3) against the excess clearances under Item 17(2) and Item 17(4). Secondly the special excise duty of 20% on the duty of excise was not considered on the ground that the special excise duty is not a duty of excise levied under the Central Excises and Salt Act as defined under Section 280 ZD (6) (b) of the Income Tax Act. Aggrieved, the petitioner preferred an appeal to the Director of Inspection (1st respondent herein), which resulted in dismissal. Hence the writ petition for the issue of a writ of certiorari to quash the aforesaid orders of the respondents and for the issue of a consequential direction to them to issue to the petitioner cash credit certificates treating each item specified in Item 17 of Schedule I separately and excluding the shortfall under item 17 thereof and also further, to take into account the additional excise duty levied under the Finance Act for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o manufacture or produce such goods; (b) `duty of excise' means the duty of excise leviable under the Central Excises and Salt Act, 1944 (1 of 1944)." 11. The Tax Credit Certificate .(Excise Duty on Excess Clearances) Scheme, 1965, or 'short scheme' as envisaged under sub-section (2) of Section 280 ZD has been framed under Notification No. 1636, dated 5th November, 1965. Clause (3) of the Scheme refers Schedule I to the Scheme whereunder the class of goods and the rate of tax credit certificate have been laid down as under :- Sl. No. Class of goods Item no. in the First Schedule to the Act. Rate being the percentage of duty of excise payable on the quantum of goods cleared in the relevant financial year in excess of the quantum cleared or deemed to have been cleared in the base year. (1) (2) (3) (4) XX XX (3) Paper all sorts, other than (i) newsprint and (ii) boards including paste board, mill board, straw board, pulp board, card and coated board. 17 15% Explanation -Newsprint referred to above shall be deemed to be paper containing mechanical wood pulp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that in Column (2) of the First Schedule to the Scheme 'paper, all sorts' is mentioned without further categorising and a uniform rate of 15% provided to Column (4) for the purpose of working out the relief of cash credit does not alter the nature, character or position of goods because the percentage for the purpose of cash credit relief as respects the other commodities like soda ash and caustic soda, which are different items, is equally uniform as the rate is fixed at 20%. The basic fact yet remains, and that is under item 17 of the First Schedule to the Excises Act, for different qualities of paper different rates of excise duties have been laid down. Secondly, if all sorts of paper are to be aggregated and excess has to be worked out while taking into consideration the deficit if any in one of the items, then the question is as to how the relief with reference to different rates of excise duty has to be given effect to while according the necessary cash credit relief as per the Scheme and as postulated by Section 280 ZD. When the question was posed, the learned standing Counsel for the Central Government, submitted that the highest incidence of duty that has to be impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the position, we find no merit in the contention of the respondents that the construction which found favour with the learned single Judge could in any way frustrate the object behind the provision. Secondly, if this argument were to be accepted, the same also should be extended to such of the commodities that are covered by the Scheme though they are distinct and different from each other. As for instance, Item 5 of Schedule I to the Scheme refers to cement and Item 6 refers to aluminium ; supposing an undertaking normally manufactures these two items, it may just as well be that for one reason or other it may produce more cement and less aluminium. Could it then be argued that there has to be a set off in so far as the production concerning aluminium as against the production of cement which is in excess ? If the answer is no which is obviously so in our judgment then the same is also extended to the paper, in the present case referred to under item 3 of the Schedule to the Scheme. 15. Yet another aspect is even if we take the term 'goods' to mean an article which is ordinarily bought and sold in the market, even then the different varieties of paper produced or manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1969, also is in similar terms. Based on the language learned Counsel argued that the special duty contemplated under the Finance Act is nothing but an additional charge of the excise duty and since it is chargeable with duty with reference to the Central Excises Act, it is nothing but a duty of excise, and therefore, it has also to be taken into account while arriving at the amount to be given credit of under section 280 ZD of the Income tax Act. Reliance was placed for this proposition on Seshasayee Paper Board v. Dy. Director of Inspection (1979) 114 I.T.R. 616 supra wherein a Division Bench of the Madras High Court held :- "Then coming to the second contention that the said excise duty levied under section 27 (4) of the Finance Act has to be taken into account for the purpose of determination of the amount for which the tax credit certificate should be given, the learned Counsel for the petitioner relies on the decision of the Supreme Court in Commissioner of Income Tax v. K. Srinivasan (1972) 83 ITR 346 and submits that if the principle of that decision is to be applied, the special excise duty levied under section 27 (4) of the Finance Act, 1973, has to be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied under the Central Excises and Salt Act, 1944 on the excess goods manufactured and cleared. 19. The Supreme Court in Madurai Co-operative Bank Ltd. v. I.T.C. held in analogous circumstances as under :- "The additional surcharge leviable under clause (c) Paragraph A of Part I of the First Schedule to the Finance Act, 1963, read with section 2 (1)(a)(ii) of that Act is a distinct charge, not dependent for its leviability on the asses-see's liability to pay income tax or super tax. The new charge under those provisions in the shape of additional surcharge can be levied even on a part of the income of a cooperative society engaged in the business of banking which income is exempt from income tax and super tax under sections 81 (i)(a) and 99 (i)(v) of the Income Tax Act, 1961. Even if the surcharge is but an additional mode of rate for charging income tax, the Finance Act, 1963, authorises by its terms the levy of additional surcharge on income which is so exempt from income tax. XX XX XX XX An exemption granted by the Income Tax Act can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge. Subject to constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount." Hence the words levied and collected occurring in sub-section (1) of Section 39 as well as in sub-section (1) of Section 31 of the Finance Acts of 1968 and 1969 respectively, connote clear conspectus of the dutybeing special distinct, different and independent of any other tax or duty, and therefore, cannot be clubbed with the excise dutyleviable under the Excises Act for the purpose of according cash credit relief conceived of under Section 280 ZD of the Income Tax Act. The learned Standing Counsel for the Central Government also, while referring to Section 80(3) of the Finance Act, 1965, which is in the following terms :- "The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excise Act or any other law for the time being in force and such special duties shall be levied for purpose of the Union and the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
