TaxTMI 
TaxTMI 
2011 (6) TMI 576
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.... central excise duty in terms of Notification No. 50/2003-C.E., dated 10-6-2003 issued under Section 5A of the Central Excise Act, 1944 and are clearing the manufactured finished excisable goods under the exemption without payment of central excise duty including NCCD which is levied under Section 136 of the Finance Act, 2001 (as amended). Consequently, a show cause notice dated 24-4-2009 relating to the period from April 2008 to January 2009 came to be issued to the appellants for contravention of provisions of Rule 6 read with Rule 8 Central Excise Rules, 2002 for non-payment of NCCD and education cess and secondary and higher education cess. The appellants contested the said show cause notice under their reply dated 28-7-2009 on the ground that Notification No. 50/2003-C.E., dated 10-6-2003 granted complete exemption to the goods specified in the first and second schedule to the Tariff Act in respect of any duty of excise and the motorcycles are specified under the first schedule to the Tariff Act. 4. The Commissioner taking into consideration the rival contentions framed three issues namely whether exemption envisaged under the said notification was applicable to NCCD o....
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....cess are levied on the aggregate of the duties of excise and as such NCCD is exempt, there can be no question of levy of education cess or secondary or higher education cess on the amount of NCCD. It is also sought to be contended that even assuming that the appellants are liable to pay NCCD and education cess, the appellants would equally be eligible to avail cenvat credit and hence it is a matter of revenue neutral and, therefore, there cannot be any liability to pay the duty. In any case, question of demanding interest or invoking panel provision cannot arise as there was no intention on the part of the appellants to evade its duty liability. 6. Learned Advocate has placed reliance in the matter of Nava Petrochemicals Ltd. v. Commissioner of C. Ex. Ahmedabad reported in 2010 (254) E.L.T. 165, Tetra Trucks India Ltd. v. CCE, Chennai reported in 2008 (227) E.L.T. 269, Toyota Kirloskar Motor Pvt. Ltd. v. CCE, Bangalore reported in 2007 (217) E.L.T. 403, Paras Petrofils Ltd. v. CCE, Surat reported in 2009 (237) E.L.T. 367 and Superfine Syntex Pvt. Ltd. v. CCE, Surat-I reported in 2009 (237) E.L.T. 292. 7. On the other hand, the DR has submitted that the exemption not....
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....ion benefit in terms of Notification No. 50/2003-C.E., dated 10-6-2003 in relation to NCCD and education cess payable on such NCCD. 9. The notification in question is on the subject of "exemption to goods other than specified goods cleared from units located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area of Uttarakhand and Himachal Pradesh". There is no dispute that the production unit of the appellants is situated in one of such centres. 10. The notification provides that it has been issued in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 to exempt the goods specified in first schedule and second schedule of the Central Excise Tariff Act, 1985 other than the goods specified in the Annexure-I appended to the said notification from the whole of duty of excis....
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....on such goods under that Act or those rules as the case may be". Obviously, the provision is an enabling provision. The provision by itself nowhere provides that if by a notification, in the excise duty leviable under Central Excise Act is exempted, it would result in exemption of NCCD leviable under the Finance Act. 14. The contention that the NCCD being surcharge it would partake the character of excise duty and, therefore, would be entitled for exemption under notification is also devoid of substance. Merely because the NCCD partakes the character of excise duty that itself is not sufficient to permit the appellants to claim benefit of exemption in respect thereof under the said notification. As already pointed out above, the notification specifically refers to the duties leviable under the statute under which the said notification has been issued. NCCD is not leviable under any of those statutes. Being so, merely because the Finance Act described NCCD as surcharge, it does not get transformed itself into an excise duty under the statute under which the duty is exempted. Indeed, it is not the contention of the appellants that it gets transformed into excise duty, but arg....
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....mper. Apparently, the case related to the dispute on the point of classification of the product which is of no relevancy in the matter in hand. 20. The order in Toyota Kirloskar Motors case was undoubtedly in relation to the point whether the assessees were entitled for benefit of exemption from NCCD under the Notification No. 108/95-C.E., dated 28-8-1995. The Tribunal referring to Section 129 of the Finance Act, 2001 observed that "a close reading of the above reveals that NCCD is indeed a duty of excise. Further it is seen that the provision of Central Excise Act 1944 with regard to exemption from duties would be applicable to NCCD leviable under Section 129. The CBEC has issued a Circular No. 60/01/06-CX., dated 13-1-2006 with regard to export of goods and has clarified that none of the duties chargeable under any Act of Parliament which provides that in relation to levy and collection of such duty, the provisions of Central Excise Act and rules made thereunder shall as far as may be, apply; was/is payable on export of goods under bond. It has been further held that from Section 129 of the Finance Act, 2001, and also from the above circular the exemption under the said e....
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....ied while in the particular facts of the case penalty was reduced. 24. The decision in Indo Farm Tractors & Motors case was relating to the dispute about the liability to pay cess leviable under Industries (Development and Regulation) Act, 1951 and education cess under Finance Act, 2004 and it was held that cess can certainly be recovered except under Automobile Cess Rules. Therein, the contention of the assessee was that the tractors manufactured by them were exempt from payment of excise duty and, therefore, no cess could be levied. While rejecting the said contention, the High Court held that "the exemption notification has to be construed strictly in accordance with the terms of the notification. Tractors admittedly are goods on which excise duty can be levied. However, the State in its wisdom thought it fit to exempt tractors from payment of excise duty. However, this exemption cannot be extended to the payment of cess provided under the IDRA. No notification has been brought to our notice whereby there is exemption given from the payment of the cess payable under the IDRA. As regards the contention regard exemption of industries from excise duty in Uttaranchal and Him....