TaxTMI 
TaxTMI 
2014 (1) TMI 1572
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....above are that M/s. TVS Motor Co. Ltd., the manufacturer of Motor Cycles/Two Wheelers falling under Chapter 87 of Central Excise Tariff Act, 1985 exported the goods on payment of Central Excise duty and Automobile Cess and filed rebate claims. The adjudicating authority under the impugned Orders-in-Original, rejected the part of rebate claims relating to Automobile Cess, SHE cess and the rebate claim of goods exported after six months of their clearance from factory in violation of Condition No. 2(b) of Notification No. 19/2004-C.E. (N.T.). The adjudicating authority relied upon C.B.E. & C. clarification issued vide F. No. 262/01/2007-CX-8, dated 20-3-2007, for rejecting rebate claim of Automobile Cess paid on exported goods. 2.1 Aggrieved by the impugned Orders-in-Original, the applicant filed appeals before Commissioner (Appeals) who rejected the appeals on the ground that the Automobile Cess is not covered under Notification No. 19/2004-C.E. (N.T.) and therefore is not rebatable under Rule 18 of the Central Excise Rules, 2002 and also that Condition 2(b) of the Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 is mandatory. 3. Aggrieved by these Orders-in-Appeal, ....
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...., 1951, since the Automobile Cess is to be levied and calculated as if it was excise duty. 3.4 Further, the Hon'ble Apex Court with respect to Jute Cess in the case of Barnagore Jute Factory Co. v. Inspector of Central Excise reported in 1992 (57) E.L.T. 3 (S.C.), has held that levy and collection of cess on jute manufactures should be considered as a duty of excise when the machinery provisions of the Central Excise Act and Rules were made applicable for levy and collection of jute Cess. 3.5 Further, in the case of CC v. Ken Agritech Pvt. Ltd. reported in 2004 (175) E.L.T. 227, a similar dispute arose as to which provisions will be applicable to the refund of Agricultural and Processed Food Products Export Cess. The provisions of the Cess Act provided for levy and collection of Cess as a duty of Customs. The Tribunal in this case held that refund of Cess collected is to be done under the provisions of Section 27 of the Customs Act. 3.6 The applicant also rely on the decision of the Appellate Tribunal in the case of Mahindra & Mahindra Ltd. v. CCE, Mumbai reported in 2007 (211) E.L.T. 481 (Tri.-Mum.) wherein it was held that Automobile Cess imposed on the manufact....
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....Explanation to Notification 19/2004-C.E. (N.T.), dated 6-9-2004. 3.11 Without prejudice to the above submissions, the applicants submit that the expression 'duty' used in Rule 18 of the Central Excise Rules, 2002 should be interpreted to included only duty levied under Section 3 of the Central Exicse Act, 1944 in terms of Rule 2(e) ibid. Consequently, any notification issued under Rule 18 cannot grant rebate of any duty other than duty levied under Section 3 of the Central Excise Act, 1944. If this be the legal position, then the only interpretation that can be possible for considering duties other than levied under Section 3 of the Central Excise Act, 1944. If this be the legal position, then the only interpretation that can be possible for considering duties other than those levied in Section 3 being as a 'duty of excise' in terms of the explanation is that the other duties are also considered as 'duty' levied and collected under Section 3 of the Act. If the above interpretation is not correct, then the grant of rebate of 'other duties' under a notification breaching the boundaries and power conferred under that Rule. The applicants submit that merely because Automobile Ces....
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.... which refers to Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 issued by the Board. In its para 1(iii), it mentions that "the excisable goods shall be exported within six months from the date on which they are cleared for export from the factory of manufacture or warehouse. This date will be indicated on the ARE-1 and invoice issued for the purpose". Hence, the date of ARE-1 and the date of invoice, which was prepared by the Hosur unit while clearing the goods for export, are relevant for the purpose of calculating the period of six months envisaged in the Notification No. 19/2004, dated 6-9-2004. The applicants therefore submit that they have complied with the condition 2(b) of the said notification and their rebate claim is maintainable as the export was within the period of six months. 4. In the case of revision application No. 198/133/2009-RA at Sl. No. 1 of table in para 1, the Assistant Commissioner rejected the rebate claims in respect of Automobile Cess and non-fulfilment of condition 2(b) of the Notification No. 19/2004, dated 6-9-2004. On an appeal filed by the assessee, the Commissioner (Appeals) vide his Order No. 215/2009, dated 1-6-2009, allowed the appea....
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.... vide GOI Revision Order Nos. 1214-1216/2010-CX, dated 7-7-2010 in favour of department by holding that rebate of Automobile Cess paid of export goods is not admissible under Rule 18 of Central Excise Rules, 2002 since Automobile Cess is not covered under Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004, for the purpose of granting rebate. M/s. TVS Motors Company challenged the said GOI Order by way of W.P. No. 2495/2011 before Hon'ble Karnataka High Court, Bangalore Bench. Hon'ble High Court vide its order dated 31-1-2013 [2013 (295) E.L.T. 42 (Kar.)] set aside the said GOI Order Nos. 1214-1216/2010-CX, dated 7-7-2010 and remanded the cases back to this authority to decide the same afresh within 3 months from date of receipt of copy of High Court order. 6. In compliance to High Court order the cases were taken up for fresh consideration. The cases were listed for personal hearing on 20-3-2013. Shri S. Vasudevan, Advocate appeared for hearing on behalf of the applicant and reiterated the grounds of revision application. Nobody attended hearing on behalf of respondent-department. 7. M/s. TVS Motors further vide their written submissions dated 25-3-2013 mainly stated ....
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....d the phrase "levied" under the Central Excise Act, 1944. Hence, even if a duty of excise is not levied under the Central Excise Act, 1944, but is merely collected under the said Act, still the same would be available as rebate. It is submitted that Automobile Cess is a duty of excise. In this regard, it is pertinent to point out that Section 9 of the Industries (Development and Regulation) Act, 1951, in terms of which Automobile Cess is levied, expressly provides that the same shall be a duty of excise. Section 9 is reproduced below : 9. Imposition of cess on scheduled industries in certain cases. - (1) There may be levied and collected as a cess for the purposes of this Act on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order a duty of excise at such rate as may be specified in the notified order, and different rates may be specified for different classes of goods : Further, S.O. 247(E), dated 22-3-1990 issued by the Ministry of Industry, Department of Industrial Development, in terms of which Automobile Cess rate was notified, also expressly states that "a duty of excise shall b....
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....l market by the Hosur unit. This is the main reason why duty is paid by Mysore factory when goods are sent to Hosur even though they are aware that some of these goods will be exported from Hosur. Thus, at the time of clearance from the Mysore unit, there was no ARE-1 prepared but the goods were just transferred to the Hosur unit on payment of full duty. The ARE-1s are prepared when the goods are to be exported from the Hosur unit. Reliance is placed on Part I of Chapter 8 of the Supplementary Instructions, 2005 which refers to Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 issued by the Board. In its para 1(iii), it mentions that "the excisable goods shall be exported within six months from the date on which they are cleared for export from the factory of manufacture or warehouse. This date will be indicated on the ARE-1 and invoice issued for the purpose". This is significant. 8. Government has carefully gone through the relevant case records, written/oral submission and the impugned Orders-in-Original/Orders-in-Appeal. 9. Government observes that Hon'ble Karnataka High Court has remanded these impugned cases with following conclusive observation : (a) &nb....
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....per understanding of issue : "Explanation-I - "duty" for the purpose of this notification means duties of excise collected under the following enactments, namely : (a) the Central Excise Act, 1944 (1 of 1944); (b) the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (c) the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (d) the National Calamity Contingent duty leviable under Section 136 of the Finance Act, 2001 (14 of 2001), as amended by Section 169 of the Finance Act, 2003 (32 of 2003) and further amended by Section 3 of the Finance Act, 2004 (13 of 2004); (e) special excise duty collected under a Finance Act; (f) additional duty of excise as levied under Section 157 of the Finance Act, 2003 (32 of 2003); (g) Education Cess on excisable goods as levied under Clause 81 read with Clause 83 of the Finance (No. 2) Bill, 2004; (h) the additional duty of excise leviable under Clause 85 of the Finance Bill, 2005 the cla....
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....d 28-12-1983 which was superceded by S.O. No. 247(E), dated 22-3-1990 and not the Central Excise Act. In view of Rule 2(c) of Automobile Cess Rules, 1984, the contention of exporter that cess is collected under Central Excise Act is not tenable. The duties of excise collected under Central Excise Act can only be rebated in respect of goods exported. In this case the Automobile Cess is not specified as duty in Explanation-I of Notification No. 19/2004-C.E. (N.T.), hence rebate of such cess paid is not admissible. 11.2 The Commissioner (Appeals) in his Order-in-Appeal No. 215/2009, dated 1-6-2009 (against which department has filed revision application No. 198/133/2009), has allowed the rebate claim of Automobile Cess by relying on C.B.E. & C. Circular No. 262/1/2007-CX.8, dated 8-10-2007. Government notes that said circular has been issued to clarify that the Standing Order No. 247(E), dated 22-3-1990 of Ministry of Industry was a notification and cess need not be paid on goods exported under bond. It simply clarified the position with respect to exemption of cess in respect of goods exported under bond without payment of duty. It nowhere allows the rebate of cess. The C.B.E. ....
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....ion. In this regard, references have been received wherein it is stated that as per Order S.O. 247(E), dated 22-3-1990 issued by the Department of Industrial Development, the Automobile Cess is not levied on goods exported. In view of this S.O., it was requested to re-examine the instructions dated 20-3-2007. 2. The matter has been examined. In the instructions dated 20-3-2007, it was clarified that where goods are exported under bond, without payment of duty, the applicable 'Cess' is liable to be paid unless it is exempted by a notification. S.O. 247(E), dated 22-3-1990 is issued by the Government of India (Department of Industrial Development). This S.O. is also a notification and therefore, it would be covered by word 'notification' used in the Board's letter dated 20-3-2007." 11.5 In the said Circular dated 20-3-2007, C.B.E. & C. has clarified in unambiguous terms that since Notification No. 19/2004-C.E. (N.T.) does not specify Automobile Cess as duty for the purpose of granting rebate, the rebate on Automobile Cess cannot be granted. The circular dated 8-10-2007 simply states that S.O. is also a notification. The Commissioner (Appeals) in said case has erred in wro....
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....h the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfill the commitment of the Government to provide and finance universalised quality basic education. (2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilise, such sums of money of the Education Cess levied under sub-section (11) of Section 2 and this Chapter for the purposes specified in sub-section (1), as it may consider necessary. 92. Definition. - The words and expressions used in this Chapter and defined in the Central Excise Act, 1944 (1 of 1944), the Customs Act, 1962 (52 of 1962) or chapter V of the Finance Act, 1994 (32 of 1994), shall have the meanings respectively assigned to them in those Acts Chapter, as the case may be. 93. Education Cess on excisable goods. - (1) The Education Cess levied under Section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this Section referred to as the Education Cess on excisable goods), at the rate of two per cent, calculat....
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....as to be utilised by the Union to fulfil the commitment of the Central Government to provide and finance universalised quality of basic education, as has been given out under Section 91 of the Act. 15. The very fact that the surcharge is collected as part of levy under three different enactments goes to show that scheme of levy of Education Cess was by way of collecting special funds for the purpose of Government project towards providing and financing universalised quality of basic education by enhancing the burden of Central Excise Duty, Customs Duty, and Service Tax by way of charging surcharge to be collected for the purpose of Union. But, it was made clear that in respect of all the three taxes, the surcharge collected along with the tax will bear the same character of respective taxes to which surcharge was appended and was to be governed by the respective enactments under which Education Cess in the form of surcharge is levied & collected. 16. Apparently, when at the time of collection, surcharge has taken the character of parent levy, whatever may be the object behind it, it becomes subject to the provision relating to the Excise Duty applicable to it in the man....
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....charge but as an independent levy and matter would have been left to be considered independently for the purpose of providing rebate in respect thereof The Notification dated 6-9-2004 had included the definition of Excise Duty only in consonance with the meaning of Excise Duty as was existing on the date Notification was issued, even if Explanation would not have been there the term Duty of Excise in ordinary circumstance would have included the surcharge levied as Education Cess in terms of Section 93 of the Act of 2004." Government finds that the Hon'ble High Court had examined the issue of admissibility of rebate claim of Education Cess in the context of Sections 91, 92 and 93 of the Finance Act, 1994. The Section 93 specifically says that Education Cess levied under Section 91 shall be a duty of excise. Section 91 also stipulates that these shall be levied and collected as surcharge, a cess to be called Education Cess. Hon'ble High Court observed that it was made clear that in respect of these taxes the surcharge collected along with tax will bear the same character of respective taxes to which surcharge was appended and was to be governed by respective enactments under which ....
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....epared by the Hosur unit while clearing the goods for export are relevant for the purpose of calculating the period of six months. Government finds that the provisions of Para 1(iii) of the Part I of Chapter 8 of Supplementary Instructions, 2005 and condition 2(b) of Notification No. 19/2004-C.E. (N.T.) stipulate that excisable goods shall be exported within six months from the date on which they were cleared for export from the factory of manufacture or warehouse. In this case initially goods were not cleared for export but it was a stock transfer to their own unit at Hosur on payment of duty. Since the goods are exported from Hosur unit on ARE-1/Invoice, the said goods are cleared for export on the date of preparation of ARE-1 at Hosur unit. Since the goods are exported within six months of their clearance from Hosur unit (date of ARE-1/invoices), the allegation of violation of condition 2(b) of the Notification No. 19/2004-C.E. (N.T.) does not survive and hence, rebate claims cannot be disallowed on this count. 14. It is pertinent to mention here that GOI has decided the identical issue of Automobile Cess vide GOI Order No. 1213/2010-CX, dated 7-7-2010, in case of Revision....