TaxTMI 
TaxTMI 
2018 (7) TMI 258
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.... paid on the inputs and is utilising the same towards payment of Education Cess and Secondary Higher Education Cess payable on Tractor Cess on the Tractors although the same is not admissible in terms of Rule 6(1) of the CENVAT Credit Rules, 2002 since the final product i.e. 'Tractors'are wholly empted from payment of Excise duty. 3. Accordingly two show cause notices were issued to the Appellant. The 1st show cause notice dated 4.10.2011 was issued for the period from September, 2006 to March, 2011, as to why:- (i) Cenvat Credit of Rs. 42,06,647.00 (Rupees Forty Two Lakh Six Thousand Six hundered and Forty Seven Only) wrongly availed and utilized by them towards payment of Education Cess (Rs. 29,19,956.00) and Higher Education Cess (Rs. 12,86,691.00), as per details shown in Annexure A to this notice, should not be disallowed and recovered from them under Rule 14 of Cenvat Credit Rules' 2004 read with proviso to Section 11 A(1) of the Central Excise Act, 1944. (ii) Interest under Section 11 AB of the Central Excise Act, 1944, should not be recovered from him, as applicable. (iii) Penalty under Rule 15(2) of Cenvat Credit Rules 2004, read with Section 11 AC of Central Excise....
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....n settled and is still pending. He also submitted that the Tractors are not exempted goods, therefore Rule 6(1) of Cenvat Credit Rules are not applicable. His further contention was that the Extended period has been wrongly invoked in the present case and that the Appellant is not liable for any penalty or interest. It was his contention that the demand for the period upto August, 2010 is beyond the normal period of limitation; that the demand in the 1st show cause notice dated 4.10.2011 pertains to the period from September, 2006 to March, 2011 and therefore substantial portion of demand is barred by limitation and extended period is not invokable in the instant case. He relied upon the decision of this Tribunal in the matters of CGST & CE v. Adani Gas Pvt. Ltd.; 2017(356) ELT 541 (Guj.), CCE, Noida v. Accurate Chemical Industries; 2014 (310) ELT 441 (All., HPL Chemicals Ltd. V. CCE, Chnd; 2003 (154) ELT 435 (Tri.-Del) and Triveni Engineering & Industries Ltd. V. CCE, Allahabad, 2001 (136) ELT 617 (Tri.-Del.), supporting the argument that since all the facts were within the knowledge of the department therefore the extended period of limitation cannot be invoked in the matter. 9.....
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....ars they keep on availing the Cenvat credit towards the payment of Education Cess and Secondary Higher Education Cess and the said conduct of the Appellant is sufficient for invoking the extended period of limitation and therefore the allegation of the appellant that the facts were within the knowledge of the department is not going to support the appellant in any way. The ld. AR further submitted that the action of the appellant of availing and utilizing the Cenvat Credit despite the earlier decision of this Tribunal in Appellant's own case proves that the appellants wilfully contravened the provision of Cenvat Credit Rules r/w Central Excise Act, 1944 and therefore the extended period of limitation has been rightly invoked and the imposition of penalty is justified. The provisions which are relevant for deciding the issue involved are extracted as under:- * The industries (Development and Regulation) Act 1951 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 Governm....
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....Cess' means the Cess levied and collected in terms of notification of Government of India in the Ministry of Industry (Department of Heavy Industry) No. 662(B) dated the 6th September, 1985 issued under sub-section (1) of section 9 of the Act, (3) Application of Central Excise and Salt Act, 1944 and the rules made thereunder:- Save as otherwise provided in these rules, the provisions of the Central Excise and Salt Act, 1944 (1 of 1944) and the rules made thereunder including those relating to refund of duty shall, so far as may be apply in relation to the levy and collection of the Cess as they apply in relation to the levy and collection of the duty of excise on manufacture of tractors under the Act and the rules. E. Finance (No. 2) Act 2004 91............Education Cess-. (1) Without prejudice to the provisions of sub-section (11) of section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfil the commitment of the Government to provide and finance universalised quality basic education. (2)............... 92................ 93......Education Cess....
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.... law for the time being in force. (2)................ (3) The provisions of the Central Excise Act, 1944 and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Secondary and Higher Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules made thereunder, as the case may be. G. Notification No. 6/2006-C.E dtd1.3.2006. as amended. In exercise of the powers conferred by sub-section (1) of Sec. 5 A of the Central Excise Act, 1944 (1 of 1944), the Central Government; on being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table given below read with the Chapter, heading or sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), (hereinafter referred to as the Central Excise Tariff Act), as are give in the corresponding entry in column (2) of the said table, from so much of the duty of ....
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....ection 2(d) of the Cenvat Credit Rules, 2002/2004 as under'- " 'Exempted goods' means goods which are exempt from whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty." 11. The issue whether tractors on which Automobiles Cess and Education Cess is payable can be considered as exempted from the whole of duty of excise thereon or chargeable to nil rate of duty as required under Rule 2(d) of Cenvat Credit Rules came up before this Tribunal in Mahindra & Mahindra's Case (supra). In which in this Tribunal held as under:- " Here we find that the terms exempted goods has been defined under Section 2(d) of the Cenvat Credit Rules, 2002/2004 as under:- "Exempted goods" means goods which are exempt from whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty." It is pertinent to note that the word used is 'duty of excise' and not 'duties of excise'. The expression 'whole of duty of excise' and 'chargeable to nil rate of duty' is 'singular expression' referring to one 'duty of excise' and not all 'duties of excise'. Section 2A of the Central Excise Act, 1944 uses four terms:-'duty', duties', ....
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....e not included in whole duty of excise and charge of nil rate of duty as has been referred in Rule 2 (d) of Cenvat Credit Rules 2004 defining exempted goods. Therefore, it is clear that tractors is exempted goods and not dutiable. Since tractors are exempted goods therefore credit of inputs (Inputs used in the manufacture of final product ) is not admissible in terms of Rule 6(1) of Cenvat Credit Rules 2002/2004 for the reason that the final product i.e. tractor are wholly exempted from payment of duties of excise. The case law cited by ld. Counsel for the Appellant are not applicable since in no case issue addressed is similar to the issue considered and decided by this Tribunal in the matter of Mahindra & Mahindra (supra). Mere filing of appeal before the Hon'ble High Court against the Tribunal's orders does not entitle the appellants to avail and utilized cenvat credit, since no stay has been granted by the Hon'ble High Court. The conduct of the appellants by availing and utilizing the cenvat credit despite the order pass by this Tribunal in the matter of Mahindra & Mahindra (supra) establishes that they have contravened the provisions of Central Excise Act and Rules made therei....