Custom, Excise & Service Tax Tribunal
41 2544/09 -Do- M/S Navkar Metal -Do- ... vs 42 2545/09 -Do- M/S Suncity Alloys (P) ... on 8 July, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No. 2, R. K. Puram, New Delhi-110066. COURT-I Date of hearing/ decision: 08.07.2010 For approval and signature: Honble Shri Justice R.M.S. Khandeparkar, President Honble Shri Rakesh Kumar, Member (Technical) ---------1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982. 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Sl. No. Excise Appeal No. Name of the appellant Respondents Arising out of the order No. and date Passed by the
1 431/09 CCE, Jaipur-II M/s Shri Ram Steel Industries O-I-A No.263-305(DK)CE/JPR-II/2008 dated 19.01.2009 Commissioner (Appeals-II) Customs & Central Excise, Jaipur.
2 643/09 -do- M/s S.R.M. Alloys (P) Ltd. -do- -do-
3 2505/09 -do- M/s Kothari Metal Industries -do- -do-
4 2506/09 -do- M/s Shree Mataji Steels -do- -do-
5 2507/09 -do- M/s Agarwal Industries -do- -do-
6 2508/09 -do- M/s Jupiter Enterprises -do- -do-
7 2509/09 -do- M/s Narpat Steels Pvt. Ltd. -do- -do-
8 2510/09 -do- M/s Namdev Textiles -do- -do-
9 2511/09 -do- M/s Metal Faricators -do- -do-
10 2512/09 -do- M/s Balaji S.S. Sheets Pvt. Ltd. -do- -do-
11 2513/09 -do- M/s Apex Strips Pvt. Ltd. -do- -do-
12 2514/09 -do- M/s Shree Ram Steel Industries -do- -do-
13 2515/09 -do- M/s Kohinoor Industries -do- -do-
14 2516/09 -do- M/s Apex Steels -do- -do-
15 2517/09 -do- M/s Steel Plast Corporation -do- -do-
16 2518/09 -do- M/s Shree Jain Metals -do- -do-
17 2519/09 -do- M/s Shri Ram Metal -do- -do-
18 2520/09 -do- M/s Shree Chanchal Industries Pvt. Ltd. -do- -do-
19 2521/09 -do- M/s Mohnot Stainless Steels Industries (P) Ltd. -do- -do-
20 2522/09 -do- M/s Belim Electromac Industries -do- -do-
21 2523/09 -do- M/s S.R.M. Steel Industries -do- -do-
22 2524/09 -do- M/s Rama Steel Pvt. Ltd. -do- -do-
23 2525/09 -do- M/s Alembic Metals Pvt. Ltd. -do- -do-
24 2526/09 -do- M/s Mittal Steels Mfg. Co. -do- -do-
25 2527/09 -do- M/s Mohnot Metals -do- -do-
26 2528/09 -do- M/s Samdari Steels & Alloys Pvt. Ltd. -do- -do-
27 2529/09 -do- M/s Krishna Metal Industries -do- -do-
28 2530/09 -do- M/s Surbhi Steels -do- -do-
29 2531/09 -do- M/s Devendra Udyog -do- -do-
30 2532/09 -do- M/s Chopra Chemicals -do- -do-
31 2533-2534/09 -do- M/s Mohnot Stainless Steels Industries (P) Ltd. -do- -do-
32 2535/09 -do- M/s Pooja Steels -do- -do-
33 2536/09 -do- M/s Ashoka Metals -do- -do-
34 2537/09 -do- M/s Mohnot Stainless Steels Industries (P) Ltd. -do- -do-
35 2538/09 -do- M/s Raj Industrial Corporation -do- -do-
36 2539/09 -do- M/s Mohnot Stainless Steels Industries (P) Ltd. -do- -do-
37 2540/09 -do- M/s Jupiter Industries -do- -do-
38 2541/09 -do- M/s Chetan Metals Pvt. Ltd. -do- -do-
39 2542/09 -do- M/s Bhagwati Metals -do- -do-
40 2543/09 -do- M/s Nahata Metals Industries -do- -do-
41 2544/09 -do- M/s Navkar Metal -do- -do-
42 2545/09 -do- M/s Suncity Alloys (P) Ltd. -do- -do-
Appearance: Shri Sunil Kumar & Sh. R.K. Verma, DRs for the appellant. None for the respondents. Coram: Honble Sh. Justice R.M.S. Khandeparkar, President Honble Sh. Rakesh Kumar, Member (Technical) Oral Order No._____ Per: Shri Justice R.M.S. Khandeparkar: Heard the learned DRs. None present for the respondents.
Records disclose that during the hearing of miscellaneous matters the parties were represented by their Advocates. Even when the matters were adjourned on the last occasion, the date was given with the consent of the learned Advocate and the learned DR. Yet there is no representation on behalf of the respondents at the time of hearing of the matters.
We have perused the records with the assistance of the learned DRs.
In all these matters the department challenges the order passed by the Commissioner (Appeals) allowing the claim of refund filed by the respondents in relation to education cess and higher education cess paid by them during the relevant period on the ground that they were not liable to pay said cess as they have opted for payment of duty under compounded levy scheme and considering the provisions of Rule 15 of the Central Excise Rules, 2001 read with Notification No. 34/2001-CE dated 28.06.2001 payment of duty in terms of the determination of liability under compounded levy scheme resulted in full discharge of their liability for duty leviable in relation to manufacture of products.
The refund claim however was rejected by the adjudicating authority essentially on the ground that the Board Circular dated 25.8.2008 had clarified that the duty payable in terms of determination of liability under compounded levy scheme refers to basic excise duty and did not include education cess and higher education cess.
Learned DR taking us through both the orders passed by the authorities below as also the provisions of law comprised under Central Excise Rules, 2001 and 2002 alongwith the Notification No. 34/2001-CE dated 28.01.2001 and as also the provisions of Finance Acts, 2004 and 2007 and placing reliance in the decision of the Tribunal delivered on 12.08.2009 in the matter of M/s Jindal Drugs Limited and others submitted that the amount payable in terms of compounded levy scheme did not include the education cess and higher education cess in terms of provision of law comprise under the said Rules read with Section 3 of the Central Excise Act, 1944. The said scheme related only to the excise duty liability and not to the duties payable under some other provisions of law including Finance Act. Since the education cess including the higher education cess was levied in terms of provisions of the Finance Act and as the said scheme restricted to the excise duty liability payable in terms of Section 3 of the said Act, merely because clause (iii) of the said notification provided that payment of duty in terms of determination of liability under compounded levy scheme would amount to full discharge of duty liability, it would not include the liability in relation to the education cess and, therefore, payment thereof cannot be said to be refundable to the assessee.
Undisputedly, the compounded levy scheme was formulated under Rule 15 of the Central Excise Rule, 2001. The said Rule 15 read as under:-
Special procedure for payment of duty.- (i) the Central Government may, by notification, specify the goods in respect of which an assessee shall have the option to pay the duty of excise on the basis of such factors as may be relevant to production of such goods and at such rate as may be notified for this purpose, subject to such limitations and conditions, including those relating to interest or penalty, as may be specified in such notification.
(ii) The Central Government may also specify by notification the manner of making an application for availing of the special procedure for payment of duty, abatement, if any, that may be allowed on account of closure of a factory during any period, and any other matter incidental thereto.
The term duty was defined under Rule 2(e) of the said Rules to mean the duty payable under Section 3 of the Central Excise Act, 1944. The definition clause in Rule 2 also clarified under item No. (i) that the words and expressions used in the said Rule and not defined but are defined in the Act shall have the meaning respectively assigned to them in the said Act.
Section 3 of the said Act refers to duties specified in first schedule and second schedule to the Central Excise Tariff Act, 1985 to be levied. In terms of sub-section (i) thereof, there shall be levied and calculated in such manner as may be prescribed as duty of excise to be called the central value added tax on all excisable goods which are produced or manufactured in India and at the rate set forth in the said schedule of the Central Excise Tariff Act, 1985 and special duty of excise in addition to the duty of excise specified as above, on excise goods specified in the second schedule to the Central Excise Tariff Act, 1985 which are produced or manufactured in India as also set forth in the said second schedule.
The provisions of law comprised under Rule 15 of the said Rules, under which the compounded levy scheme is sought to be introduced under Notification No. 34/2001-CE dated 28.6.2001, therefore, specifically refers to the duty of excise payable in terms of Section 3 of the said Act. The conjoint reading of Rule 15, rule 2(e) of the said rules and Section 3 of the said Act makes it abundantly clear that the scheme which can be introduced in terms of Rule 15 giving option to the manufacturer in that regard would be in relation to the duties payable in terms of Section 3 of the said Act. Section 3 specifically refers to the duties specified in first and second schedule to the Central Excise Tariff Act, 1985.
The education cess has been levied in accordance with Section 93 of the Finance Act, 2004 whereas the higher education cess was levied under Section 138 of the Finance Act, 2007. The education cess so levied under Finance Act cannot be said to be excise duty levied in terms of Section 3 of the said Act. The issue regarding the same had arisen before the Tribunal in the matter of CCE, Jammu vs. M/s Jindal Drugs Limited and various other matters which were disposed of by the Tribunal on 12.08.2009 by final Oral Order No. 900A to 1143A/2009-Ex. holding therein that Undisputedly, the levy of cess is under totally independent enactment i.e. Finance Act, 2004 and Finance Act, 2007. However, both the said enactments cannot be read as forming part of the Central Excise Act nor both Acts are required to be read together. In the Finance Act, under section 93(3), it provides that the provisions of Central Excise Act, 1944 and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of the penalty shall, as far as may be, apply in relation to the levy and collection of the 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, as the case may be, would disclose that the provisions of two Acts are independent from each other and merely because education cess is defined as the excise duty, it could not be construed that the cess levied under Finance Act should also be exempted under the said notification even in the absence of clear specification in that regard under the said notification.
Before arriving at the said finding the Tribunal had taken into consideration the various provisions of law of the said Act as well as of the Finance Acts and has held that the cess so imposed cannot be construed as forming part of the duty levied under Section 3 of the said Act. Obviously, therefore, education cess and higher education cess cannot be said to be part of the compounded levy determined under the compounded levy scheme in terms of Notification No. 34/2001-CE dated 28.06.2001 read with Rule 15 of the said Rules.
Clause 3(1) of the said notification provides that a manufacturer whose application has been granted under paragraph 2 shall pay a sum calculated at the rate specified in the said notification, subject to the conditions laid down in the said notification and such payments shall be in full discharge of his liability for duty leviable on his production of such cold re-rolled stainless patta/ patties, or aluminium circles during the period for which the said sum has been paid. Referring to the word duty in the said clause it was the contention, as is revealed from the records, of the respondents that on payment of duty determined under the compounded levy scheme, the entire duty liability of the manufacturer would stand discharged and that therefore they were not liable to pay the education cess or higher education cess. Once it is clear that the term duty in Rule 15 under which the compounded levy scheme was formulated refers to the duty payable in terms of Section 3 of the said Act which in turn exclusively relates to the first and second schedule of the Central Excise Tariff Act, 1985, it is obvious that the duties, merely because they are classifiable as the excise duty, but imposed under Finance Acts cannot form part of the duty payable under Section 3 of the said Act and for the same reason mere payment of the duty in terms of determination of compounded levy payable would not result in discharge of their liability to pay the duty payable in terms of the Finance Acts.
Clause 3 of the said notification refers only to the liability which arises in terms of determination thereof under compounded levy scheme and not in relation to the liability which arises on account of statutory provisions other than Rule 15 under which the scheme is formulated. Once Rule 2(e) of the said Rules restricts the scope of the term duty to the liability which could be discharged in terms of Section 3 of the said Act and Section 3 refers to the first and second schedules of the Central Excise Tariff Act, 1985, the cess being imposed under independent statutory provisions comprised under Finance Acts, certainly, the liability flowing therefrom would not be part of the duty determined under the compounded levy scheme. The Rule 15 of the said Rules merely enables the Central Government to specify the goods in respect of which assessee can opt to pay the duty of excise on the basis of such factors as may be relevant to production of such goods and at such rate as may be notified for that purpose. It does not relate to exemption of duty liability imposable and recoverable under other statutory provisions, once he opts for the compounded levy scheme. On the other hand, considering the phraseology of Rule 15 read with Rule 2(e) of the said Rules, it is evident that the scheme under the said Rule would apply to the duties payable under Section 3 of the said Act. If the contention sought to be raised on behalf of the assessee is accepted, it would virtually result in construing the Rule 15 of the said Rules as granting exemption from payment of all the duties payable under any other statute once the manufacturer opts for compounded levy scheme. Rule 15 nowhere discloses any such intention of the legislature even remotely. It is true that in the letter dated 25.8.2008 issued by the Board, there was reference to the Boards instruction dated 19.12.2007 which related to the compounded levy scheme for pan masala containing tobacco and it was stated therein that no education cess or higher education cess would be leviable over and above the amount to be paid under the compounded levy scheme. It is not understood as to on what basis the Board had issued those instructions. Neither the provisions comprised under Rule 15 of the said Rules nor the provisions under Rule 96ZO of the erstwhile Rules disclose that the duties in the nature of the education cess or higher education cess imposed under Finance Acts are included in the duty payable in terms of Section 3 of the said Act. In any case, when the provisions of law are very clear, the question of following the instructions of the Board which are apparently contrary to the provisions of law, cannot arise. Besides the letter dated 25.08.2008 even after noting those instructions proceeded to clarify with reference to Notification No. 34/2001-CE dated 28.06.2001 that the Notification No. 17/2007-CE dated 01.03.2007 which is similar to amended Notification No. 34/2001-CE dated 28.06.2001 covers only basic excise duty and does not include education cess or higher education cess and the same apparently is in consonance with the provisions of law. Being so, question of referring to the earlier instructions of the Board does not arise.
For the reasons stated above, therefore, we find that the Commissioner (Appeals) erred in interfering with the order passed by the adjudicating authority. The impugned order cannot be sustained and is liable to be set aside with consequential relief.
The appeals therefore succeed on the above grounds. They are hereby allowed. The impugned order is set aside with all consequential relief.
(Justice R.M.S. Khandeparkar) President (Rakesh Kumar) Member (Technical)
17. After matters were heard and judgement was delivered in the open Court and while Excise appeal No. 2546 of 2009 was being heard, a letter was received in the open Court stated to have been sent by Shri O.P. Agarwal, Chartered Accountant for the respondents, which reads thus:
The personal hearings in the above-referred appeals filed by the department have been fixed for 08.07.2010 before your Lordship. I have to appear for hearing on behalf of the all the respondents. Accordingly I got my ticket reserved from Jodhpur to Delhi and back vide PNR No. 2636850865 and 2408456173 on 30.06.2010 itself. But suddenly engagement of my niece has been fixed for 08.07.2010 and therefore, I had to be here in Jodhpur to attend ring ceremony. In view of this, I would not be able to appear before your good offices for hearings on 08.07.2010. In view of this, I would request your good offices to kindly adjourn the hearing fixed for 08.07.2010 and oblige. The inconvenience caused to you is highly regretted.
18. The above letter was received in the open Court at 1.15 p.m. by the Court Master. Thereafter, it was brought to the notice of the Bench. Since matters were already heard and order was already delivered in the open Court nothing could be done in relation to the application comprised under the said letter.
19. Even otherwise there is no substance in the application. The date of hearing was fixed with the consent of the learned Advocate and the learned DR. The matters were adjourned on so many occasions. It was specifically made known to the representatives of the parties that matters would not be adjourned any further.
20. Besides the ground disclosed in the application can never be a ground for adjournment.
21. Besides, neither the learned Advocate nor the representative of the party is entitled to presume that the Tribunal would be obliged to adjourn the matter moment a request for the same is sent. Besides the practice of seeking adjournment by sending an application either by post or by courier or by fax is highly objectionable. Adjournment is not a matter of right. Nobody can take the Tribunal for granted and presume and assume that matter would be adjourned moment there is a request for the same. There has to be a genuine ground for adjournment of a matter. Besides, it should not be forgotten that the order in that regard is always in the discretion of the Tribunal which is to be exercised judiciously. Nobody can insist for adjournment of hearing.
22. For the reasons stated above, the application for adjournment is dismissed.
(Justice R.M.S. Khandeparkar) President (Rakesh Kumar) Member (Technical) Pant