M/S. Lupin Ltd vs Commissioner Of Central Excise & ...

[Arising out of Order-in-Appeal No. SB/44-47/LTU/MUM/2010 dtd. 3/3/2010 passed by the Commissioner (Appeals) Central Excise & Service Tax, Mumbai]

For approval and signature:

Honble Mr Ramesh Nair, Member (Judicial)

=======================================================

1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Lupin Ltd. : Appellants

VS

Commissioner of Central Excise & Service Tax, MUmbai : Respondent

Appearance

Shri Sachin Chitnis, Advocate for the Appellants Shri V.K. Shastri, Asstt. Commissioner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 24/6/2015 Date of decision: 24/6/2015

ORDER NO.

Per : Ramesh Nair

These appeals are directed against Order-in- Appeal No. SB/44-47/LTU/MUM/2010 dtd. 3/3/2010 passed by the Commissioner (Appeals) Central Excise & Service Tax, Mumbai, wherein Ld. Commissioner upheld the order in original and rejected the appeal filed by the appellant.

2. The issue involved in these appeals are whether the appellants are entitle for refund in respect of Education cess and Secondary and Higher Education Cess paid through cash under Notification No. 56/2002-CE dated 14/11/2002. The adjudicating authority rejected the refund claim on the ground that the notification NO. 56/2002-CE does not exempt education cess and Secondary and Higher Education cess as it exempt only basic excise duty. Therefore refund available under the notification is limited to basic excise duty only and not to the education cess and Secondary and Higher education cess. Aggrieved by the said order in original the appellant filed appeal before the Commissioner (Appeals) on the ground that the issue is squarely covered by the Tribunal judgment in the case of Bharat Box Factory Ltd. Vs. Commissioner of C. Ex., Jammu [2007(214) ELT 534(Tri Del)]. However the Ld. Commissioner (Appeals) rejected the appeal of the appellant on the ground that Revenue has filed SLP in Honble High Court in the case of Bharat Box Factory case. Aggrieved by the said orders of the Commissioner (Appeals), appellant is before me.

3. Shri Sachin Chitnis, Ld. Counsel for the appellant submits that Ld. Commissioner has gravely erred in dismissing the appeal of the appellant despite considering the judgment of this Tribunal in the case of Bharat Box Factory Ltd. Merely by filing the appeal before the Honble Supreme Court, the judgment of this Tribunal cannot be ignored. The revenue in their SLP filed before the Honble Supreme Court could not obtain any stay till date. In this regard, he placed status of the case before the Supreme Court which shows pending and no stay was granted. In view of this position, he submits that following the ratio of this Tribunal in the case of Bharat Box Factory Ltd. (supra) these appeals may be allowed.

4. Shri V.K. Shastri, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that since the SLP by the Revenue is pending before the Honble Supreme Court these appeals may be kept in abeyance till the decision of the Apex Court.

5. I have carefully considered the submissions made by both sides and perused the record.

6. I find that this Tribunal in case of Bharat Box Factory Ltd passed the judgment way back in 2007 and eight years already passed. The Revenue could not obtain any stay against the order of this Tribunal in their SLP bearing No. 31298/08. I observed that this Tribunal is heavily burdened with huge pendency of appeals. There is no provisions that if either litigant approached to the higher forum in a finding case without any stay matter, this Tribunal keep the identical matters in abeyance. In my view wheel of justice should not stop, therefore I do not find any reason that why appellant should suffer despite order of this Tribunal in Bharat Box Factory case is in their favour. I, therefore, dispose of these appeals. I find that issue involved whether the assessee working under area based exemption notification No. 56/2002-CE is entitle for refund of education Cess has been decided in the case of Bharat Box Factory Ltd. (supra), wherein coordinate bench of this Tribunal held as under:

8.The ground for? rejecting the claim for refund of Education Cess in the nature of excise duty paid at the rate of 2% on the portion of excise duties which were exempted, given by the Commissioner (Appeals) and adopted by the learned Authorized Representatives for the Department, that there was no mention of the provisions of Education Cess in the nature of excise duty leviable under Section 93 in the said Notification, would be self-defeating and counter-productive, as will be seen hereafter.

8.1If the? provisions of Chapter VI of the Finance Act, 2004 relating to levy and collection of Education Cess in the nature of excise duty were included along with the three Acts in the said Notification, unintended adverse consequences would follow for the Revenue. It is clear from the wordings of Section 93 that the Education Cess in the nature of excise duty which is required to be levied and collected at the rate of 2% of the aggregate of all duties of excise would be applicable not only in respect of the excise duties that can be levied and collected under the Central Excise Act, 1944, Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, but also in respect of all other excise duties which are levied and collected by the Union Finance Ministry under any other law for the time being in force. Inclusion of the provisions of Section 93 of the Finance Act, 2004 in the Notification would have created an exemption from levy of Education Cess even in the context of excise duties payable under the other laws in respect of which no excise duty exemption was intended under the said Notification. To illustrate, if the provisions of Finance Act, 2004 were also mentioned in the said Notification along with the said three Acts, then even the Education Cess in the nature of excise duty leviable on Cess in the nature of excise duties under Section 3 of the Sugar Cess Act, 1982, Section 15 of the Oil Industries Development Act, 1974, and Section 3 of the Jute Manufacturers Cess Act, 1983, in respect of which no exemption is granted, would stand exempted.

8.2In our? opinion, there was no need for including the provisions relating to Education Cess in the nature of excise duty required to be levied and collected under Section 93 of the Act in the said Notification, because the Education Cess was in the nature of piggy back duty, which would not operate in respect of the excise duty exempted under the relevant law. Moreover, inclusion of the said provisions of Section 93 of the Finance Act, 2004 in the said Notification would have led to an anomalous situation as indicated above. It would also to be noticed that the refund contemplated in Paragraph 2 of the Notification in the context of statement of duty paid in cash, has no relevance with any Education Cess in the nature of excise duty, because the provisions of the Notification, including the manner of giving effect to the exemption contained thereunder, were devised only in the context of the excise duties which otherwise would have been payable under the said three Acts, but for such exemption. It cannot, therefore, be said that Education Cess cannot be refunded because there was no provision for its refund in Paragraph 2 of the said Notification. It became refundable because the exemption became operative.

9.For the? foregoing reasons, it is evident that when the exempted amount of duty was required to be refunded for operationalising the exemption, Education Cess, which was in the nature of piggy back duty on the excise duties under the said three Acts, was also required to be refunded, because it was not at all leviable, in view of the entitlement to exemption worked out under Paragraph 2 of the said Notification. The impugned orders of the Commissioner (Appeals) cannot, therefore, be sustained and is hereby set aside with consequential reliefs. These appeals are accordingly allowed. Similarly, in case of Sun Pharmaceutical Industries Vs. Commissioner of C. Ex., Jammu [2007(207) ELT 673] coordinate bench of this Tribunal held as under:

7. I have perused the record and have considered the submissions made by both sides.

8.A careful perusal of sub-rule 7(b) makes it clear that the limitation placed in that sub-rule, is in regard to the utilisation of Cenvat credit obtained through education cess paid on inputs. That sub-rule has no application at all in regard to utilisation of credit of basic excise duty. Provision relating to utilisation of basic excise duty credit is to be found in sub-rule (4) of Rule 3 of Cenvat Credit Rules. That sub-rule places no limitation at all on utilisation of the basic excise duty credit. Therefore, the finding in the original order that sub-rule 7(b) was attracted to the present case is not sustainable.

9.The objection taken that education cess is not a duty of excise is also not sustainable in the light of the declaration contained in Section 93(1) of the Finance Act. That apart, the proposition that cess paid on goods produced in India is excise duty remains confirmed by the decision of this Tribunal in the case of TTK LIG Ltd. Therefore, the objection taken by the first appellate authority is also not in terms of law. Apart from these is the fact that the appellants claims are not in relation to any payment of education cess on manufactured goods. Its claims are in relation to payment of basic excise duty by cash (after fully exhausting the Cenvat credit available). These refund claims are clearly within the scheme of Notification No. 56/02. The objections taken by the lower authorities are not sustainable.

10.In the result, the appeals are allowed with consequential relief to the appellant. In another case of Cyrus Surfactants Pvt. Ltd. v.s Commissioner of Central Excise, Jammu [2007(215) ELT 55(Tri)] division bench of this Tribunal has held that Education Cess is in nature of piggy back of duty which could not operate in respect of excise duty exempted under the relevant law. When the entitlement to exemption of duty of excise or additional duty of excise which would otherwise being payable under 3(x) in Notification No. 56/2002-CE is undisputed, no duty of education Cess arises in nature of excise duty under section 93 of Finance Act, 2004. Education cess not to be refunded as no provisions or it returns in notification ibid is not sustainable. In view of the above settled legal position, I am of the considered view that the appellant is entitle for the refund of education cess and secondary and higher education cess paid on clearances of the goods under Notification No. 56/2002-CE. Therefore orders in appeal are set aside and the appeals are allowed, with consequential relief, if any, in accordance with law.

(Dictated in court)

Ramesh Nair Member (Judicial)

sk

8 APPEAL NO. E/706, 707, 708, 709,/10-MUM