TaxTMI 
TaxTMI 
2009 (8) TMI 812
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.... cess and higher education cess which was paid alongwith the excise duty in terms of exemption Notification No. 56/02, dated 14-11-2002 are also refundable alongwith the excise duty paid under the said exemption notification. 3. Learned Representatives for the Department and the learned Advocates as well as Chartered Accountant appearing for the assessees were heard at length on the above issue in all these matters. 4. Few facts relevant for the decision in all these matters on the above issue need to be noted. In exercise of powers conferred under Section 5A(1) of the Central Excise Act alongwith two other enactments, a notification came to be issued being Notification No. 56/2002 with reference to the area specified thereunder and the assesses submitted their declaration in accordance with the requirement of the said notification to avail the benefit thereunder in relation to the manufacture of the products in their factories located within the area specified under the said notification. The assessees were permitted to avail the benefit under the said notification either by way of payment of utilizing cenvat credit or by way of duty in cash or in PLA account. Each....
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....re I appended hereto, and cleared from a unit located in the Industrial Growth Centre, Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate, or Scheme Area, as the case may be, specified in Annexure - II appended hereto, from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods, other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2002. 2. The exemption contained in this notification shall be given effect to in the following manner, namely :- (a) The manufacturer shall submit a statement of the duty paid, other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2002, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 7th day of the next month in which the duty has been paid. (b) The Assistant Commissioner of Central Excise or Deputy Commission....
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....ding of the notification would not permit exemption from the cess sought to be imposed under Finance Act and for the same reason question of refund thereof does not arise. Attention was drawn to Finance Act, 2004 and Finance Act 2007 in relation to the provisions relating to the education and higher education cess which was sought to be imposed under the said enactments. Referring to Section 93 of the Finance Act 2004, it was sought to be contended that levy in the nature of the cess is under different and separate enactment and notification in question does not find any reference to such enactment. In that regard attention was sought to be drawn to the decision of the Larger Bench of the Tribunal in Nellimarla Jute Mills v. Collector of Central Excise, Guntur reported in 1987 (31) E.L.T. 209 (T), and in particular para 12 of the decision. Reliance was also placed in the decision of the Hon'ble Supreme Court in the matter of Union of India and Others v. Modi Rubber Limited and Others reported in 1986 (25) E.L.T. 849. It was also sought to be contended that the notification does not speak of absolute exemption from the payment of duties. It is in the nature of partial exemption. It ....
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....mitted that the levy and payment of excise duty in terms of the said notification does not include "collection of duty" within the meaning of the said expression under the statutory provision in relation to the payment of excise duty. According to the learned Advocates, deposit of the amount in PLA account in terms of the said notification would not amount to collection of the duty and, therefore, there was no question of levy of education cess in relation to such amount of duty of excise which is never "collected" within the meaning of said expression under Section 93 of the Finance Act. Drawing to our attention to the Finance Act, it was contended that levy of cess is essentially with reference to the excise duty "levied and collected". In the absence of "collection of duty" according to the respondents there was no occasion for the department to levy the cess and whatever amount on assumption that such cess can be levied was collected by the respondents is obviously refundable alongwith the excise duty which was paid under the said notification. Attention was also drawn to the decision in the matter of Bharat Box Factory Ltd. v. CCE, Jammu reported in 2007 (214) E.L.T. 534 (Tri.....
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...., Patna v. Telco reported in 1997 (92) E.L.T. 303, it was sought to be contended that a notification cannot be read in such a manner that it would defeat the very purpose behind the issuance of the said exemption of notification. If we give literal meaning to the words of the notification, according to the learned Advocates for the respondents, it would defeat the very purpose and intention behind issuing the said notification. The intended purpose being to grant full benefit and exemption from payment of duties, it would obviously include education cess which is in the nature of excise duty. 11. It was further submitted that undoubtedly the duty was leviable and but for exemption, it could not be collected. In that regard attention was sought to be drawn to the decision of the Apex Court in Orient Weaving Mills Limited v. Union of India reported in 1978 (2) E.L.T. J311 and in particular para 9 thereof. 12. It was then sought to be contended that since the duty was exempted in the sense though it was levied but not collected, there was no occasion for levy of cess. According to the respondents, the notification is complete in all respects. As regards the liability a....
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..... Jayanthi Krishna & Co. reported in 2000 (119) E.L.T. 4 (S.C.), it was sought to be contended that once the goods do not attract the excise duty, question of payment of cess cannot arise. Considering the exemption granted under notification, according to the respondents, therefore, alongwith the refund of the duty, the cess is also refundable since the basic duty is not to be collected in relation to the goods manufactured in the area specified under the said notification, the same cannot be subjected to the payment of cess, therefore, whatever amount paid as cess alongwith the duty which was paid by the party, has to be refunded. In support of this contention reliance was also placed in the decisions of Indian Oil Corporation Limited v. Collector of Central Excise, Calcutta reported in 1986 (24) E.L.T. 593 (Tri.), Tata Oil Mills Co. Ltd. v. Collector of Central Excise, Calcutta reported in 1985 (21) E.L.T. 730 (Tri.), Kalyani Spinning Mills Ltd. v. Commissioner of C. Ex. Kolkata-III reported in 2009 (236) E.L.T. 496 (Tri. - Kolkata) and CCE, Mumbai v. Raymond Limited reported in 2005 (192) E.L.T. 868 (Tri. - Mumbai). 15. Reliance was also placed in the matter of Vishal El....
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....nefits, its nature and steps which are to be required to be taken by the assessee to avail those benefits, including the period within which such steps are required to be taken. It also specifies various steps required to be taken to give full effect to the notification. In that respect, as rightly pointed out by the learned Advocate, the notification on the face of it appears to be complete in all respects. 19. Once the notification is not disputed to be complete in all respects, it hardly leaves any room for interpretation thereof. The controversy mainly relates to the mode of complying with the obligation relating to the levy of the excise duty in terms of the said notification. Needless to say that the levy of excise duty was in pursuance of the statutory provisions. The collection thereof was in terms of the said notification. While it is the contention of the assessees that it was merely in the form of tender in PLA account, it is the contention of the Department that it was essentially in the form of payment. Based on the argument regarding mere tender of the amount of duty, it is sought to be contended by the assessee that there was no obligation to pay the educatio....
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....ace of it uses the expression "payment of duty" with reference to discharge of duty obligation by the manufacturer for availing the exemption benefit under the said notification. The term "collection" is nowhere to be found in the notification. The said term is used in Section 93 of the Finance Act. It is settled law that the meaning of any term in a taxing statute cannot be understood with reference to even similar term used in the different taxing statute. It is essentially to be understood in the context it is used in the very section where the term is found to have been used. Being so, even while understanding the term in the notification which are issued under a taxing statute, the meaning of the term thereunder cannot be understood with reference to the similar term used in a different statute, unrelated to the notification. The expression "payment of duty" in the notification, therefore, will have to be understood with reference to the similar expression used in the Central Excise Act or the connected enactments. The term used in the notification which is issued under Central Excise Act, Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Additional Dutie....
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....cess as the case may be. The second is the actual levy by an adjudication or assessment order. Sometimes, the quantification of the amount payable is done in the adjudication/assessment order. Finally, comes the question of collection. That being so, collection is a natural corollary of the levy. It is inconceivable that the levy is valid but collection can be held to be impermissible. That is an irreconcilable situation".               (Emphasis supplied) 23. The Apex Court has clearly specified three stages which form part of process of imposition of tax or cess and simultaneously has ruled that the actual realization of the tax or cess is a natural corollary of the levy. Once a notification, which is undisputedly complete in all respects, reveals all the stages which are required to be followed for the compliance of the obligation regarding the payment of duty with the intention to avail the benefits under such notification, and it includes the last stage of levy i.e. the collection of levy, it cannot be said that it does not include the collection within the meaning of the said expression as is unders....
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.... in Bharat Box Factory Limited case nor in Cyrus Surfactants Pvt. Limited [2007 (215) E.L.T. 55 (Tri.-Del.)] case deals with this aspect of the matter nor that point ever arose therein and/or was considered and, therefore, the said decisions are of no help to the respondents in the matter in hand. 26. It brings us to the question as to whether education cess so collected would also be refundable under the said notification. 27. As already pointed out above, the notification ex facie discloses to have been issued under three enactments namely, Central Excise Act, 1944, Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. The contention on behalf of the assessees is that since the education cess is in the nature of excise duty, the exemption of the excise duty would automatically relate to the exemption of the education cess. On the other hand, the Department contends that the education cess is levied under the Finance Act and the exemption notification nowhere relates to the Finance Act and, therefore, there is no scope for grant of such exemption under the said notification. ....
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....otification and does not include the Finance Act. Being so, there is hardly any room to presume that the expression "duty of excise or additional duty of excise" will also refer to any duty under any other Acts also. It is, however, sought to be contended that the education cess was sought to be levied for the first time in 2002 whereas the notification was issued in 2004 when the Finance Act was not in force. In our opinion, it makes no difference. Neither the Finance Act 2004, nor any other notification discloses that a refund of excise duty collected as per liability under law relating to the excise duty statues would automatically result in proportionate reduction in liability in relation to the education cess levied under Finance Act. Besides it is not the case of the respondent that consequent upon enforcement of the Finance Act, 2004, there was any amendment to the Notification No. 56/2002 either to include the excise duty under the Finance Act to be forming part of the said notification or otherwise. It is settled law that under the guise of interpretation, the Courts and Tribunal are neither empowered to restrict nor enlarge the scope of any exemption notification. The ben....
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....he notification has been issued under three specified enactments, and further exemption having been specified as available to the excise duty and special excise duty leviable under those very enactments, there is no scope for inclusion of any other similar type of excise duty in the exemption notification. 31. As regards the contention relating to the intention behind the grant of exemption, undoubtedly it is essentially for the benefit of the manufacturer establishing their units in the State of Jammu & Kashmir. However, one cannot forget that the words used in the notification should be understood in the context in which they are used. Once the expression used in the notification clearly discloses that the benefit thereunder are available to the duties leviable under the statues under which the notification has been issued and not to a duty levied under any other enactment, irrespective of the fact that such duty may be of similar in nature, it goes without saying that the benefits under notification would be restricted to the duty paid under the statues under which the notification has been issued. 32. The decision of the Apex Court in M/s. Ashok Service Centre a....
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.... it was with reference to the dispute relating to the manner in which the levy of cess to be collected in respect of the motor vehicles. It was the contention on behalf of the Revenue that the cess should be levied at 1/8% of the value of the motor vehicle that value being computed as explained in Section 9 of the Industries (Development and Regulation) Act. It was the contention of the assessee that the value of motor vehicle for the purpose of levy of cess is to be calculated in the manner laid down in the Central Excise and Salt Act, 1944 read with Rule 3 of the Automobile Cess Rules. The point for consideration was totally different and unrelated to the matter under consideration. Being so, the observation therein are of no help to the assessees in the case in hand. 34. In Orient Wvg. Mills (P) Ltd. & Anr. v. Union of India & Ors. reported in AIR 1963 SC 98 = 1978 (2) E.L.T. (J311) (S.C.) case the Apex Court was dealing with the matter pertaining to the challenge to certain provisions of Central Excise and Salt Act on the ground that they were ultra virus to the Constitution. We fail to understand how this decision can have any relevancy to the matter in issue. 35.&e....
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.... 1978 (2) E.L.T. J311 (S.C.), that the exemption granted by an exemption notification has effect as if enacted as a part of the statute required no further discussion. It merely means that once exemption under notification is issued it forms part of the statutory provisions and, therefore, has to be given effect as contemplated under the notification considering the same as part of the mandate of the statute. 39. The decisions in Indian Oil Corporation Limited, Tata Oil Mills Co. Limited, Kalyani Spinning Mills Limited and Raymond Limited are on the point that once the goods are exempted under a notification from whole of the duty of excise leviable thereon, it would also entitle for exemption from additional duty and or special excise duty. Considering the nature of the exemption granted under such notification, the said rulings were given. One fails to understand how the said criteria can be applied in the matter in hand. The education cess which is imposed under totally different and independent enactment, and the notification nowhere refers to the Finance Act. Being so, none of these decisions are of any help in the matter in hand. Similar is the case of M/s. Vishal Ele....
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....fore the High Court that for the purpose of levy of education cess, it is absolutely necessary that there must be levy and collection of excise duty. In other words the observations as above were made in the facts of the case wherein there was no dispute raised that education cess could be calculated even on notional calculation of excise duty. Being so, that will be of no help to the Revenue in the matter in hand. 42. Perusal of the notification in question also discloses that the exemption granted thereunder is not an absolute exemption. The exemption is restricted to the extent of the amount paid either in cash or through PLA account in terms of the said notification and not otherwise. It is only that amount which become refundable in terms of the said notification. 43. The contention which is sought to be advanced on behalf of the assessees that the levy of education cess was clearly impermissible in relation to the goods manufactured in the State of Jammu & Kashmir and which were entitled to avail the benefit of exemption under the said notification, rather than lending any support to the contention for claim of refund of the education cess under the said notif....