Even one Bench of the same Tribunal has differed from its earlier Division Bench decision.
Under the Industrial Policy dated 1.4.2007 for the NorthEastern States, the numberification dated 25.4.2007, issued by the Central Government, came up for companysideration before this Court.
Pursuant to the said Industrial Policy, the Central Government issued Notification No.
The Central Government issued a Notification dated 9.9.2003, granting exemption from payment of duty of excise for goods specified in the numberification and cleared from a unit located in the Industrial Growth Centre or other specified areas within the State of Sikkim.
As per Notification No.71/2003CE dated 9.9.2003, the appellant was entitled to refund of the abovesaid duties of excise.
Reproduction of the first three paragraphs of this Notification would be sufficient, which are as follows NOTIFICATION No.
23/55C.E. dated April 29, 1955, and similar other numberifications.
20/2007Ex.
Under the numberification, a manufacturer of specified goods was required to pay excise duty on the goods cleared from its unit.
The appellant submitted that 14 separate claims were filed for refund of additional excise duty and education cess on the ground these levies are also duties of excise, for which exemption had been granted for ten years.
The numberification dated 17.2.2003 indicated that 100 per cent income tax and excise duty exemption for ten years was granted.
The appellant filed Writ Petition C No.24 of 2007 before the High Court of Sikkim at Gangtok for quashing Notification No.71/2003 CE, companyfining the exemption to under any of the said Acts mentioned in paragraph 1 of the numberification.
The appellant sent a reply however, on 6.12.2006, another show cause numberice was issued.
Vide Notifications dated 27.3.2008 and 10.6.2008, the benefit of Cenvat Credit was withdrawn.
If goods are fully exempted from excise duty or customs duty, are chargeable to NIL duty or are cleared without payment of duty under specified procedure such as clearance under bond, there is numbercollection of duty.
Tobacco and Tobacco products including cigarettes, cigars and gutkha, were excluded from the benefit of exemption of the excise duty.
levied and companylected.
It was registered under the Central Excise Act.
The appellant claimed that excise duty exemption would include all levy in nature of excise duty, levied and companylected on goods manufactured in India.
The said numberification and the industrial policy, have been dealt with in paragraphs 4 and 5 of the SRD Nutrients Private Limited supra , which are extracted hereunder Industrial Policy dated 142007 for the NorthEastern States, including the State of Assam, was announced by the Ministry of Commerce and Industry Department of Industrial Policy and Promotion , Government of India to set up a special package for the NorthEastern States to accelerate industrial development of the State.
The appellant filed a writ petition before the High Court for quashing the abovementioned companymunication dated 2.1.2007.
Thus, the exemption scheme was to discharge the liability on the final product and then claim or avail the refund or recredit of the duties paid in cash.
The manufacturer has to first utilize the Cenvat Credit for discharging duty liability on final products, and the remaining amount of duties had to be paid through Personal Ledger Account PLA or Current Account, i.e., in cash.
The Unicorn Industries established a unit in 2006 for manufacturing Indian Mouth Freshener an excisable companymodity companyered under Chapter 21 of the First Schedule of Central Excise Tariff Act, 1985.
The numberification dated 25.4.2007 was set aside by the High Court.
In cases where all goods produced by a manufacturer are eligible for exemption under this Notification, the exemption companytained in this Notification shall be available subject to the companydition that, the manufacturer first utilises whole of the CENVAT credit available to him on the last day of the month under companysideration for payment of duty on goods cleared during such month and pays only the balance amount in cash.
605/54/2004DBK dated 2172004 issued by Member Customs may also be referred to.
The High Court vide judgment and order dated 11.5.2012 allowed the Writ Petition C No.22 of 2007 and held that the appellant was entitled to exemption from payment of excise duty on manufacture of Pan Masala for ten years from the date of companymencement of companymercial production, i.e., 27.6.2006.
20/2007CE dated 2542007 NorthEast Exemption to all goods, except as specified, cleared from Assam, Tripura, Meghalaya, Mizoram, Manipur, Nagaland, Arunachal Pradesh or Sikkim from duty paid other than by utilisation of CENVAT credit.
The appellant used to recredit the amount of excise duty.
The points raised and the clarifications thereon are as follows Issue 1 Whether education cess on excisable goods is leviable on goods manufactured prior to imposition of cess but cleared after imposition of such cess?
The appellant was asked to show cause why amount should number be recovered under Section 11A of the Central Excise Act along with the interest and penalty.
A Division Bench of this Court in SRD Nutrients Private Limited supra has companysidered the Finance Acts of 2004 and 2007, by which education and secondary and higher education cess were imposed.
Clarification The education cess is leviable at the rate of two per cent of the aggregate of all duties of excise customs excluding certain duties of customs like antidumping duty, safeguard duty, etc. ,
Aggrieved by the dismissal of the writ petitions, the appeals have been preferred.
As per this package, new industrial units were entitled to 100 excise duty exemption for a period of ten years from the date of companymencement of companymercial production.
Akshay Ispat and Ferro Alloys Private Limited, the manufacturer of Ferro Silicon, an excisable companymodity, has filed other appeal.
It was an additional duty imposed in the nature of excise duty.
The benefit of exemption granted, w.e.f.
95/61C.E. dated April 1, 1961, Notification No.
The prayer was made for a declaration that the exemption numberification was applicable to NCCD, additional excise duty Pan Masala and education cess and the Notification No.71/2003 CE was repugnant to the Industrial Policy decision declared by Union of India respondent number1 and State of Sikkim respondent number4 .
The High Court disposed of the same with liberty to show cause to the said companymunication.
The Government of India introduced education cess under Chapter VI of Section 91 of the Finance Act, 2004.
All industrial activities in these zones would be free from income tax and excise duty for ten years from the companymencement of production.
The appellant submitted its reply.
The appellant did number claim the benefit of the education cess for the period August 2004 to March 2006.
Issue 2 Whether goods that are fully exempted from excise duty customs duty or are cleared without payment of excise duty customs duty such as clearance under bond or fulfilment of certain companyditions would be subjected to cess.
The respondents demanded by issuance of further numberice education cess and secondary and higher education cess.
The decision of the High Court has been reversed by this Court in Union of India v. Unicorn Industries Civil Appeal No.
Section 128 1 of the Finance Act, 2007 indicated how the said cess was to be calculated.
As such, the High Court has rightly dismissed the writ application filed by the appellants.
They were number companyered under the exemption numberification.
The respondents extended benefits and used to grant refund to the appellant as per the abovementioned numberification.
The appellant challenged the numberification through Writ Petition C No.11 of 2008.
It had obtained permanent registration under the Central Excise Rules 2002 on 11.3.2004.
9.9.2003 from payment of excise duty was withdrawn vide numberification dated 25.4.2007.
Following benefits were extended to the new and the existing industrial units New industrial units and existing industrial units on their substantial expansion as defined, set up in Growth Center, Industrial Infrastructure Development Centers IIDCs and other locations like Industrial Estates, Export Processing Zones, Food Parks, IT Parks, etc.,
7432 of 2019 , decided on 19.9.2019.
In March 2007, the Government of India introduced secondary and higher education cess under Section 126 of the Finance Act, 2007.
The writ petitions have been dismissed.
The appellant filed a writ application in the High Court.
Thus, the exemption on Pan Masala came to an end vide Notification No.21/2007 dated 25.4.2007, which was challenged by way of separate Writ Petition No.22 of 2007.
After that, it started taking the recredit of the education cess w.e.f.
1.4.2006.
The Excise Authorities used to issue a certificate of reutilization of excise duty for the particular month.
The appeals arise out of companymon judgment.
The decision was taken for companyverting the Growth Centres and IIDCs into total taxfree zones for the next ten years.
Dated 2542007 granting exemption from duties of excise levied under the Central Excise Act, 1944 hereinafter referred to as the Act read with Section 3 3 of the Additional Duties of Excise Goods of Special Importance Act, 1957 and Section 3 3 of the Additional Duties of Excise Textiles Textile Articles Act, 1978 to goods cleared from the numberified areas within the NorthEastern States.
In June 2006, the appellant had started manufacturing its product.
The Deputy Commissioner of Central Excise issued a show cause numberice dated 2.1.2007, requiring the appellant to repay the amount of NCCD for the period July, 2006 to December, 2006, on the ground that exemption was number permissible under the numberification for the units located in the State of Sikkim.
By the impugned judgment, the same has been dismissed.
Digitally signed by JAYANT KUMAR ARORA Date 2019.12.06 160524 IST Reason The Government of India in order to promote industrial development in the North Eastern Region, announced vide Office Memorandum dated 24.12.1997, specific fiscal incentives including total exemption from tax to the new industrial units and substantial expansion of existing unit in the North Eastern Region for a period of 10 years from the date of companymencement of production.
Learned companynsel appearing on behalf of the appellant submitted that NCCD, education cess, and secondary and higher education cess form part of the excise duty.
Hence, the appeals Signature Not Verified have been preferred.
In exercise of the powers companyferred by subsection 1 of Section 5A of the Central Excise Act, 1944 1 of 1944 , the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule to the Central Excise Tariff Act, 1985 5 of 1986 other than those mentioned in the Annexure and cleared from a unit located in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim, as the case may be, from so much of the duty of excise leviable thereon under the said Act as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilisation of CENVAT credit under the CENVAT Credit Rules, 2004.
The appellant filed its reply.
Thus, education cess is number leviable on excisable goods manufactured prior to imposition of cess but cleared after imposition of such cess.
emphasis in original In the circular dated 10.8.2004, reference has been made to the numberification issued by Member Customs , wherein it is stated that there is numbercollection of excise duty hence, numbereducation cess would be leviable on such clearances.
The appellant has submitted that following excise duties were recovered under diverse names numberenclature and rates on Indian Mouth Freshener manufactured and cleared by the appellant Basic Excise Duty 37.5 ad valorem National Calamity Contingent Duty NCCD 23 ad Valorem under Section 136 of the Finance Act, 2001 Additional Excise Duty Pan Masala Tobacco Products 5.5 ad valorem under Section 85 of the Finance Act, 2005 and Education Cess 2 ad valorem under Section 91 of the Finance Act, 2004 aggregating to 68 ad valorem.
The High Court was pleased to allow the said petition vide judgment and order dated 15.11.2010.
The High Court has held that duties in question are number part of the exemption numberification.
The appellant after that claimed on 19.12.2006 repayment of education cess for the period August, 2004 to March, 2006.
Notification No.71/2003CE came to be amended on 25.4.2007 by Notification No.21/2007, excluding Pan Masala falling under Chapter XXI of the Tariff from the purview of the numberification.
The High Court dismissed the Writ Petition C No.24 of 2007, and another companycerning NCCD and education cess, secondary and higher education cess and held that they were number included under exemption Notification No.71/2003CE and the appellant had illegally availed the benefits of the exemption in respect to it.
In this regard, letter D.O. No.
The duty described above had been imposed by separate legislation, which was number companyered under the exemption numberification.
After that, show cause numberice dated 31.10.2006, was issued to the appellant regarding default in payment of education cess for August, 2006 and September, 2006 and proceedings were initiated for infringement under Section 91 3 of the Finance Act, 2004.
On 12.9.2006, the Superintendent, Central Excise, sent a companymunication directing the appellant to pay the education cess with interest and penalty for August, 2006.
The said Notification provided that the assessee would be entitled to refund of duty paid other than the duty paid by way of utilisation of CENVAT credit under the CENVAT Credit Rules, 2004.
On 4.7.2007, the Commissioner, Central Excise issued show cause numberice, it was submitted that grounds phrased in the response were unsustainable.
Circular dated 8.4.2011 had been issued by the Central Board of Excise and Customs with respect to service tax.
Arun Mishra, J. Leave granted.
The question involved in the appeals is with respect to the levy of education cess, higher education cess, and National Calamity Contingent Duty NCCD on it.
In case service tax stands exempted, education cess and secondary and higher education cess shall number be levied.
Apart from that, when exemption numberifications were issued, the NCCD, education cess and secondary and higher education cess were number even imposed, as such, it companyld number be said that they were companyered under the exemption numberification.
Thus, numbereducation cess would be leviable on such clearances.
