TaxTMI 
TaxTMI 
2024 (5) TMI 931
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.... is the case of the appellants that the CEC is levied as per Section 83 of the Finance Act, 2010 which specifically states that "they shall be levied and collected in accordance with the provisions of this Chapter, a Cess to be called, Clean Energy Cess, as a duty of excise on goods specified in Tenth Schedule being goods produced in India at the rate set forth in the said Schedule for the purposes of financing and promoting clean energy initiatives, fund the research in the area of clean energy or for any other purpose relating thereto." They argued that the CEC is nothing but a duty of excise and is collected by the Central Excise officers and therefore there is no reason to deny them the credit of Cenvat under Rule 3 of CCR, 2004. While agreeing that the CEC is not explicitly listed in Rule 3 of CCR as one of the taxes on which credit can be taken, it is the argument of the appellants that this should not be the reason for denying them the Cenvat credit because CEC is also a form of excise duty. They rely on the case law of Shree Renuka Sugars [2014 (302) ELT 33 (Kar.)] in which the Hon'ble High Court of Karnataka held that with reference to sugar cess which was also in the natu....
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.... i. the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; ii. the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act; iii. the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act,1978 ( 40 of 1978); iv. the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ( 58 of 1957); v. the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); vi. the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); via. the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); vii. the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) (vi) and (via); viia. the additional duty lev....
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....y because a particular tax is collected as a duty of excise, it does not automatically entitle the assessee to avail Cenvat credit on such duty. They further argue that the case of Shree Renuka Sugars (supra) does not apply to present case as that was in the context of sugar cess and not in respect of CEC. Although sugar cess was also not explicitly covered in CCR, 2004, the Hon'ble High Court of Karnataka had allowed such credit against which they filed an SLP which is pending before the Hon'ble Apex Court as reported in 2015 (319) ELT A.119 (SC). Even the reasoning given by the Hon'ble High Court of Karnataka for allowing Cenvat credit of sugar cess does apply to this case. In the case of sugar cess, all provisions of Central Excise Act and Rules were made applicable to sugar cess as well. However, with respect to the CEC, Notification No. 02/2010 has been issued making some provisions of the Central Excise Act, 1944 applicable to the CEC. These Sections are 5A, 6, 9, 9A, 9AA, 9C, 9D, 9E, 11, 11A, 11AA, 11AB, 11AC, 11B, 11BB, 11C, 11D, 11DD, 11DDA, 12A, 12B, 12C and 12D; Chapters III, VI, VIA and VIB. From the above, it is evident that other provisions of Central Excise Act do no....
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....e CEC is levied at one and only one stage. There is no CEC again on the cement or other products manufactured by the assessees. This is similar to the basic customs duty which is also levied at one point and no Cenvat credit is given on such duty. 10. With respect to interest they would assert that once the assessee has availed or utilized Cenvat credit, interest is payable. On the question of penalty also they would assert that penalty is imposable on all the appellants for wrongly availing Cenvat credit in clear violation of CCR, 2004. They relied on the order of this Bench in the case of Singareni Collieries Co. Ltd [2016 (341) ELT 378 (Tri-Hyd)] to assert that the CEC was imposed on the principle of 'Polluter pays' and therefore it stands on a different footing than other Cesses. 11. We have considered the arguments on both sides and perused the records. The short point to be decided is whether the appellants are entitled to Cenvat credit of the CEC paid on the coal imported by them or otherwise. The CEC was levied under Section 83 of the Finance Act, 2010 which reads as follows: "83. (1) This Chapter extends to the whole of India. (2) ..........
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....nd any ambiguity. If the intention was to allow credit of all forms of duties of excise and cesses, the Rule would have said so. Instead, it only listed some forms of duties of excise, additional duties of customs and cesses on which credit will be admissible and CEC is not one of them. 14. We have also considered the argument of the appellants that the ratio of judgment of Hon'ble High Court of Karnataka in the case of Shree Renuka Sugars (supra) not being overturned by any superior judicial forum, must apply. On going through the judgment of the Hon'ble High Court of Karnataka, we find that in that case the entire Central Excise Act and Rules were applicable to sugar cess but in the case of CEC, only some provisions of Central Excise Act have been made applicable. Section 37 of the Central Excise Act under which the CCR, 2004 as well as other Rules are framed are not made applicable to the CEC. Therefore, the Finance Act itself does not conceive of applying Cenvat Credit Rules to the CEC. In the absence of any explicit provision, they cannot be made applicable to the CEC. In other words, neither does Rule 3 of CCR provide for credit of CEC nor do the provisions of CEC ma....
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....case of L. Chandra Kumar Vs Union of India in Civil Petition No. 481/1980 vide judgment dated 18.03.1997. Paras 94 and 100 of which are reproduced below: "94. Before moving on to other aspects, we may summarise our conclusions on the jurisdictional powers of these Tribunals. The Tribunals are competent to hear matters where the vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for the High Courts and the Supreme Court which have, under our constitutional setup, been specifically entrusted with such an obligation. Their function in this respect is only supplementary and all such decisions of the Tribunals will be subject to scrutiny before a Division Bench of the respective High Courts. The Tribunals will consequently also have the power to test the vires of subordinate legislations and rules. However, this power of the Tribunals will be subject to one important exception. The Tribunals shall not entertain any question regarding the vires of their parent statutes following the settled principle that a Tribunal which is a creature of an Act cannot declare that very Act to be unconstitutional. In such cases alone, ....
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....y overlooking the jurisdiction of the concerned Tribunal. Section 5(6) of the Act is valid and constitutional and is to be interpreted in the manner we have indicated." 18. From the above, it is evident that this Tribunal can also examine the vires of the Act and Rules with the condition that the Statute under which this Tribunal was created (Customs Act, 1962) cannot be questioned by this Tribunal. Further, the power of this Tribunal to decide on the vires of the Act or Rules is subject to scrutiny by Division Bench of the High Courts. 19. It may be seen that the scope of this Tribunal may extend to testing the vires of rules, regulations etc., but certainly does not extend to making the rules or modifying them. In the absence of any explicit provision to give Cenvat credit of CEC under Rule 3 of CCR, 2004, it is not for this Tribunal to enlarge its scope. To sum up: a) Rule 3 of CCR, 2004 does not provide for Cenvat credit of CEC. b) Rules under Central Excise Act including CCR, 2004 or Section 37 under which they are framed are not made applicable to CEC under the Finance Act, 2010. c) It is not open for this Tribunal to enlarge or mo....
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.... 24. Clean Energy Cess is levied as duty of excise on goods specified in Tenth Schedule. Thus, it is a cess in the nature of excise duty on the 'production' of coal and is collected at the time of removal of raw coal, raw ignite and raw peat from the mines of the factory. The intention of the levy of this cess is for the purposes of financing and promoting clean energy initiatives, fund the research in the area of clean energy or for any other purposes relating thereto. It is specifically stated in the notification that this cess has to be paid by cash. The liability to pay cess cannot be discharged using CENVAT credit. 25. As already discussed by brother Member, Rule 3 of CENVAT Credit Rules, 2004 does not expressly provide for availing credit on Clean Energy Cess. The sixth proviso introduced in Rule 3(4) of CENVAT Credit Rules, with effect from 29.6.2010, provides that CENVAT credit on any duty specified in sub-rule (1) shall not be utilized for payment of Clean Energy Cess leviable under section 83 of the Finance Act, 2010 (14 of 2010). Thus, CEC has to be paid using cash only. This consequently implies that no credit can be availed on C.E.C so as to utilize it for....