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Issues: Whether Rule 8 of the Central Excise Rules, 2002 could be invoked to confirm demand and penalty for delayed payment of education cess, when such cess is levied under the Finance Act and not under Section 3 of the Central Excise Act, 1944.
Analysis: Rule 2(e) of the Central Excise Rules, 2002 confines "duty" to duty payable under Section 3 of the Central Excise Act, 1944. Education cess is levied under Section 91 of the Finance Act, 1994, and though Section 93 of the Finance Act, 2004 treats the cess as a duty of excise, that deeming provision does not enlarge the definition of "duty" in Rule 2(e). Since the levy does not arise under Section 3 of the Central Excise Act, 1944, the machinery of Rule 8 cannot be applied for delay in payment of education cess.
Conclusion: Rule 8 of the Central Excise Rules, 2002 was inapplicable to the delayed payment of education cess, and the demand, interest and penalty could not be sustained.
Final Conclusion: The impugned order was set aside and the appeal was allowed in favour of the assessee.
Ratio Decidendi: A procedural rule governing delayed payment of excise duty cannot be applied to education cess where the governing levy is under the Finance Act and the relevant rule defines duty only with reference to excise duty under the Central Excise Act.
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