IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 8308 of 2006(L)
1. FCI OEN CONNECTORS LIMITED,
... Petitioner
Vs
1. THE UNION OF INDIA REPRESENTED BY THE
... Respondent
2. THE COMMISSIONER OF CENTRAL EXCISE
3. THE DY.COMMISSIONER OF CENTRAL EXCISE
4. THE JT.SECRETARY TO THE GOVERNMENT OF
For Petitioner :SRI.A.M.SHAFFIQUE (SR.)
For Respondent :SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :04/01/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C)No.8308 OF 2006
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Dated this the 4th day of January, 2010
J U D G M E N T
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1. The petitioner is a company engaged in manufacture
of connectors, which goods are leviable with Central Excise
Duty, subject to exemption with respect to goods so
manufactured exported out of the country. As per provisions in
the Central Excise Rules, prevalent from time to time, the
manufacturers are entitled to claim rebate of the duty paid on
the goods manufactured and exported. The petitioner company
was always clearing its goods on payment of duty and then
claiming rebate on the duty so paid. The relevant notification
with respect to making claim for rebate, prevalent during the
period from 26.6.2001 to 5.9.2004 is Ext.P1. Ext.P1
contemplates grant of rebate in respect of duty paid on excisable
goods exported and duty paid on materials used in manufacture
or processing of such goods. The word “Duty” as defined in the
said notification are the duties of Excise collected under, the
Central Excise Act, 1994, the Additional Duties of Excise (Goods
of Special Importance) Act, 1957, the Additional Duties of Excise
(Textiles and Textile Articles) Act, 1978, and the special excise
duty collected under any Finance Act. But with effect from
W.P.(C).8308/06-L 2
9.7.2004 a new levy as “Education Cess” was also imposed,
through Finance Bill 2004. The Education Cess was collected as
a duty at 2% calculated on the aggregate of all duties of Excise
which are levied and collected by the Central Government under
the provisions of the Central Excise Act, 1944. Ext.P1
notification, being one issued in the year 2001, does not provide
for grant of rebate on Education Cess, and therefore the rebate
contemplated under Ext.P1 notification was limited only to the
element of Central Excise duty.
2. The anomaly in this regard was rectified through a
fresh notification, Ext.P2, dt:6.9.2004, issued in supercession of
Ext.P1. In Ext.P2 an explanation is added extending meaning of
the word “duty” to include ‘Education Cess’ on excisable goods
which was introduced by virtue of Finance Act, 2004. But with
respect to the interregnum, from the date of introduction of levy
of cess on 9.7.2004 till Ext.P2 notification dt: 6.9.2004, i.e. the
period between 9.7.2004 to 5.9.2004, the claim with respect to
rebate on Education Cess was rejected by the adjudicating
authority, for the sole reason that rebate in respect of Education
Cess was not provided in Ext.P1 notification, which governed the
field of granting rebate, during that period.
3. Eventhough petitioner preferred statutory appeals,
the appellate authority upheld the view taken by the 3rd
W.P.(C).8308/06-L 3
respondent and rejected those appeals, through Ext.P3 order.
Revision petition filed before the 4th respondent was also
dismissed adopting the very same reasoning. Hence the
petitioner is seeking declaration to the effect that, Ext.P2
notification which was issued in supercession of Ext.P1
notification is only clarificatory in nature and that the petitioner
is entitled to get rebate on the Education Cess paid with respect
to goods exported, during the period between 9.7.2004 and
5.9.2004.
4. Argument of learned counsel for the petitioner is that,
explanation appended to Ext.P1 notification will take in its ambit
the excise duty and also special excise duty collected under any
Finance Act. Under Finance Act 2004 it was ordained that
Education Cess is to be collected as surcharge on Excise duty
payable. The said cess is a special excise duty chargeable and
collected under Finance Act 2004 and it will fall within the ambit
of clause 3 of the explanations to Ext.P1 notification.
Consequently rebate is allowable on Education Cess, being a
special excise duty payable 2004, in terms of Ext.P1. Later
notification including ‘Education Cess’ is only an enumerative
definition, and it is only clarificatory. Therefore the Education
Cess levied as duty of excise as per statutory provisions, from the
date of such levy is eligible for rebate under the basic
W.P.(C).8308/06-L 4
notification itself, as clarified through Ext.P2, is the contention.
5. Learned counsel for the petitioner had pointed out a
decision of the High Court of Rajasthan in Banswara Syntex
Ltd. Vs. Union of India (2007 (216) E.L.T. 16 (Raj.))
wherein the contention as stated above has been upheld and it is
held that the rebate is eligible with respect to levy of Education
Cess during the period from 9.7.2004 to 5.9.2004. On going by
the reasoning in the said judgment, I am inclined to accept the
dictum laid therein and to hold that the Education Cess paid
after introduction of Finance Bill 2004 with effect from 9.7.2004
is part of Excise duty and it will form part of the Special Excise
Duty mentioned in Ext.P1 notification. Therefore despite the
explanation added in Ext.P2 notification the petitioner is entitled
for rebate on the Education Cess, along with the rebate on
Excise Duty, from the date on which the Education Cess became
leviable.
6. Accordingly the writ petition is allowed. The
impugned order to the extent it refused claim for rebate on
Education Cess for goods exported by the petitioner between the
period from 9.7.2004 to 5.9.2004, which is confirmed through
Exts.P3 and P4 appellate and revisional orders, are hereby set
aside. It is declared that the petitioner is eligible for rebate on
Education Cess along with rebate of excise duty for the goods
W.P.(C).8308/06-L 5
exported during the said period. The respondents are directed
to take consequential steps for allowing the rebate, at the
earliest, at any rate, within a period of two months from the date
of receipt of a copy of this Judgment.
C.K.ABDUL REHIM, JUDGE.
okb