TaxTMI 
TaxTMI 
2024 (5) TMI 931
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 nature of duty of excise that Cenvat credit is admissible even though it is not exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se 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 leviable under sub-section (5) of section 3 of the Customs Tariff Act, viii. the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 not apply to the CEC. The CCR, 2004 have been framed under Section 37 (Chapter VII) of the Central Excise Act, 1944. Neither Chapter VII nor Section 37 has been made applicable for CEC at all. Therefore, any rule that has been framed u....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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) ........................................... (3) There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Clean Energy Cess, as duty of excise, on goods specified in the Tenth Schedule, being goods produced in India, at the ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sidered 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 make CCR and any other Rules under Central Excise Act applicable to it. Therefore, this is clearly distinguishable from the case of the Hon'ble High Court of Karnataka in the case of Shree Renuka Sugars (supra). 15. Although it is now settled that taxing statutes must be literally interpreted, we have also examined ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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, the concerned High Court may be approached directly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before a Division Bench of their respective High Courts. We may add that the Tribunals will, however, continu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 modify the scope of Act or rules and they should be interpreted as they are drafted without any intendment. d) If Cenvat credit of CEC is allowed, it will undo the very purpose for which it is levied and vitiate 'polluter pays' principle. e) The ratio of the judgment of the Hon'ble High Court of Karnataka in the case of Shree Renuka Sugars (supra) does not apply to CEC. Hence, we find th....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 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 making payment of any other duty. 26. The argument put forward by the Revenue pointing out that facts in the case of M/s. Shree Renuka Sugars Ltd. (supra) cannot be applied to the facts of these appeals also merits consideration. In Shree Renuka Sugars (supra), the question was with regard to the eligibility of credit on sugar cess paid by the assessee therein. The Hon'ble High Court of Karnataka held the issue in favour of assessee observing that the entire provisions of ....