TaxTMI 
TaxTMI 
2018 (7) TMI 258
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....tion Cess and Secondary Higher Education Cess 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....
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....e the Hon'ble High Court, therefore they are availing the Cenvat Credit since the issue has not been 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....
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....tted that despite knowing that the credit is not available to the Appellant, but still for so many years 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....
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.... (b) 'Tractor' means tractor as covered under the Sub- heading(1) of heading 10 'Agricultural Machinery' of the First Scheduled of the Act and Act and of power take-off Horse Power exceeding 25; (c) '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 ....
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....argeable under section 93 of the Finance (No. 2) Act, 2004 and Secondary and Higher Education Cess on excisable goods] which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 or under any other 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 colu....
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....utiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable." The term '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." 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 ex....
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....g contended by the Appellant. in view of the same the appellants are required to follow the provision of Rule 6(2) and (3) of the Cenvat Credit Rules." 12. Although tractors are exempted from duty but cess of Education on automobile are paid thereon. Though these cess are governed and collected under the procedure laid down in Central Excise law but they borrow their legislative authority under duty statue. Therefore, they are 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 ....