TaxTMI 
TaxTMI 
2010 (7) TMI 416
X X X X Extracts X X X X
X X X X Extracts X X X X
....eals) allowing the claim of refund filed by the respondents in relation to education cess and higher education cess paid by them during the relevant period on the ground that they were not liable to pay said cess as they have opted for payment of duty under compounded levy scheme and considering the provisions of Rule 15 of the Central Excise Rules, 2001 read with Notification No. 34/2001-C.E., dated 28-6-2001 payment of duty in terms of the determination of liability under compounded levy scheme resulted in full discharge of their liability for duty leviable in relation to manufacture of products. 5. The refund claim however was rejected by the adjudicating authority essentially on the ground that the Board Circular dated 25-8-2008 had clarified that the duty payable in terms of determination of liability under compounded levy scheme refers to basic excise duty and did not include education cess and higher education cess. 6. Learned DR taking us through both the orders passed by the authorities below as also the provisions of law comprised under Central Excise Rules, 2001 and 2002 alongwith the Notification No. 34/2001-C.E., dated 28-1-2001 and as also the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....them in the said Act. 9. Section 3 of the said Act refers to duties specified in first schedule and second schedule to the Central Excise Tariff Act, 1985 to be levied. In terms of sub-section (i) thereof, there shall be levied and calculated in such manner as may be prescribed as duty of excise to be called the central value added tax on all excisable goods which are produced or manufactured in India and at the rate set forth in the said schedule of the Central Excise Tariff Act, 1985 and special duty of excise in addition to the duty of excise specified as above, on excise goods specified in the second schedule to the Central Excise Tariff Act, 1985 which are produced or manufactured in India as also set forth in the said second schedule. 10. The provisions of law comprised under Rule 15 of the said Rules, under which the compounded levy scheme is sought to be introduced under Notification No. 34/2001-C.E., dated 28-6-2001, therefore, specifically refers to the duty of excise payable in terms of Section 3 of the said Act. The conjoint reading of Rule 15, Rule 2(e) of the said Rules and Section 3 of the said Act makes it abundantly clear that the scheme which can....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpounded levy scheme in terms of Notification No. 34/2001-C.E., dated 28-6-2001 read with Rule 15 of the said Rules. 13. Clause 3(1) of the said notification provides that a manufacturer whose application has been granted under paragraph 2 shall pay a sum calculated at the rate specified in the said notification, subject to the conditions laid down in the said notification and such payments shall be in full discharge of his liability for duty leviable on his production of such cold re-rolled stainless patta/patties, or aluminium circles during the period for which the said sum has been paid. Referring to the word 'duty' in the said clause it was the contention, as is revealed from the records, of the respondents that on payment of duty determined under the compounded levy scheme, the entire duty liability of the manufacturer would stand discharged and that therefore they were not liable to pay the education cess or higher education cess. Once it is clear that the term 'duty' in Rule 15 under which the compounded levy scheme was formulated refers to the duty payable in terms of Section 3 of the said Act which in turn exclusively relates to the first and second schedule of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....obacco and it was stated therein that no education cess or higher education cess would be leviable over and above the amount to be paid under the compounded levy scheme. It is not understood as to on what basis the Board had issued those instructions. Neither the provisions comprised under Rule 15 of the said Rules nor the provisions under Rule 96ZO of the erstwhile Rules disclose that the duties in the nature of the education cess or higher education cess imposed under Finance Acts are included in the duty payable in terms of Section 3 of the said Act. In any case, when the provisions of law are very clear, the question of following the instructions of the Board which are apparently contrary to the provisions of law, cannot arise. Besides the letter dated 25-8-2008 even after noting those instructions proceeded to clarify with reference to Notification No. 34/2001-C.E., dated 28-6-2001 that the Notification No. 17/2007-C.E., dated 1-3-2007 which is similar to amended Notification No. 34/2001-C.E., dated 28-6-2001 covers only basic excise duty and does not include education cess or higher education cess and the same apparently is in consonance with the provisions of law. Being so, ....