TaxTMI 
TaxTMI 
2014 (11) TMI 30
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....re only measure of Central Excise duty has been prescribed to be calculated in a particular manner. It was his case that whatever may be the methodology prescribed for calculating the measure of tax but the same remains a duty of excise chargeable under Section 3(1) of the Central Excise Act, 1944 for which 100% credit should be allowed under Rule 3(1) (i) of the Cenvat Credit Rules, 2004. He made the bench go through the provisions contained in relevant Act and the Rules. That Revenue was incorrect in further bifurcating this Central Excise duty paid into Basic Customs duty and Education Cess. That the observations of the adjudicating authority that Rule 3(1) of the Cenvat Credit Rules, 2004 permits credit only of duty paid under first Schedule to Central Excise Tariff Act, are without authority of law as the same has not been specified anywhere in Rule 3(1). Learned advocate relied upon the following case laws in support of his argument that cumulative duties paid by the appellant under proviso to Section 3 (1) of the Central Excise Act, 1944 have been considered to be Central Excise duty on which credit is admissible:- (i) ....
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....1985 SCR (2) 643] to drive home the point that a proviso cannot expand the main provisions/ interpretation of the Act. That a proviso to charging Section 3 (1) cannot enhance the rate of duty payable. Learned AR also relied upon the Supreme Court judgment in the case of UOI vs. Ind-Swift Laboratories Limited - [2012 (25) STR 184 (SC)] to argue that it is not permissible to import provisions into a taxing statute and credit of customs duties paid cannot be allowed under Cenvat Credit Rules. 4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether appellant is entitled to credit of duties paid by a 100% EOU on DTA clearance as per proviso to Section 3(1) of the Central Excise Act, 1944. Appellant is of the view that the duty paid on the invoices represent Central Excise duty only though measure of tax so paid also indicate the elements of customs duties. It is observed that adjudicating authority in Para 4 of the OIO dated 12.01.2011/13.01.2011 has agreed that duty paid by a 100% unit in DTA clearance represent duties of excise but in the same sentence holds that credit of such duties is not admissible under Rule 3(1) of the Cenvat C....
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....dit) of (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; 5. Revenue has relied upon the case law of the Apex Court to the effect that a proviso cannot enlarge the scope of the main Section and no CENVAT credit of duty other than paid under First Schedule to Central Excise Tariff Act, 1985, is eligible. If the view put forth by the Revenue is accepted than under proviso to Section 3(1) no duty more than the duty of excise leviable under the First Schedule to Central Excise Act can be recovered from a 100% EOU. Revenue can take not one stand while recovering duties and take another stand once it comes to taking of CENVAT credit. It is, therefore, a logical conclusion that the sum total of duties paid by a 100% EOU represents Central Excise duty chargeable as per Section 3(1) of the Central Excise Act, 1944. In the invoices the entire duty has been shown as excise duty paid under proviso to Section 3(1) of the Central Excise Act, 1944. This proviso is existing in Section 3 right from 01.3.1982. Hon'ble High Court of Gujarat in the case of CCE vs. H.K.....
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....; 3. After hearing both the sides, I find that in terms of provisions of Section 3 of Central Excise Act, 1944, a 100% EOU, when clearing the goods in DTA is required to clear the same on payment of Excise duty. The measure of such duty shall be equal to the amount of Customs duty which would be leviable under Customs Act, 1962 or in any other law for the time being imposed on like goods produced or manufactured, outside India if imported into India. As such what is required to be paid by a 100% EOU is Central Excise duty and not Customs duty. The appellants' reliance on Hon'ble Supreme Court's decision in the case of Suresh Synthetics reported in 2007 (216) E.L.T. 662 (S.C.) is appropriate in as much as in that case, it was held that duty to be paid by a 100% EOU for clearance in domestic tariff area is the duty of Excise and not Customs duty. 4. In any case, I have examined the invoices being invoice Nos. 161 & 162 dated 11-10-2006. The said invoices show payment of Central Excise duty and Education Cess on Excise duty. As such admittedly the supplier of the goods has pai....