Central Excise Act, 1944 – Finance Act, 2004 – Finance Act, 2007 – Finance Act, 2001 – The High Court held that duties i.e. the levy of education cess, higher education cess and National Calamity Contingent Duty (NCCD) are not the part of the exemption notification – Appellant contended that the NCCD, education cess, and secondary and higher education cess form part of the excise duty and hence the decision of the High Court is bad in law – On appeal, held: Notification dated 09.09.2003 issued in the present case makes it clear that exemption was granted u/s. 5A of the Act 1944, concurring additional duties under the Act of 1957 and additional duties of excise under the Act of 1978 – There was no reference to the Finance Act, 2001 by which NCCD was imposed, and the Finance Acts of 2004 and 2007 were not in vogue – The notification could not have contemplated the inclusion of education cess and secondary and higher education cess imposed by the Finance Acts of 2004 and 2007 in the nature of the duty of excise – In the absence of a notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted – The High Court rightly relied on the decision of the three-Judge Bench of the Supreme Court in Modi Rubber Limited, which was followed by another three-Judge in Rita Textiles Private Limited – Therefore, the Judgment and order of the High Court upheld.
Dismissing the appeals, the Court
HELD: 1. Notification dated 9.9.2003 issued in the present case makes it clear that exemption was granted under Section 5A of the Act of 1944, concerning additional duties under the Act of 1957 and additional duties of excise under the Act of 1978. It was questioned on the ground that it provided for limited exemption only under the Acts referred to therein. There is no reference to the Finance Act, 2001 by which NCCD was imposed, and the Finance Acts of 2004 and 2007 were not in vogue. The notification was questioned on the ground that it should have included other duties also. The notification could not have contemplated the inclusion of education cess and secondary and higher education cess imposed by the Finance Acts of 2004 and 2007 in the nature of the duty of excise. The duty on NCCD, education cess and secondary and higher education cess are in the nature of additional excise duty and it would not mean that exemption notification dated 9.9.2003 covers them particularly when there is no reference to the notification issued under the Finance Act, 2001. There was no question of granting exemption related to cess was not in vogue at the relevant time imposed later on vide Section 91 of the Act of 2004 and Section 126 of the Act of 2007. The provisions of Act of 1944 and the Rules made thereunder shall be applicable to refund, and the exemption is only a reference to the source of power to exempt the NCCD, education cess, secondary and higher education cess. A notification has to be issued for providing exemption under the said source of power. In the absence of a notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted. The High Court was right in relying upon the decision of three-Judge Bench of this Court in Modi Rubber Limited, which has been followed by another three-Judge Bench of this Court in Rita Textiles Private Limited. [Para 40] [1045-H; 1046-A-E]
2. The Circular of 2004 issued based on the interpretation of the provisions made by one of the Customs Officers, is of no avail as such Circular has no force of law and cannot be said to be binding on the Court. Similarly, the Circular issued by Central Board of Excise and Customs in 2011, is of no avail as it relates to service tax and has no force of law and cannot be said to be binding concerning the interpretation of the provisions by the courts. The reason employed in SRD Nutrients Private Limited that there was nil excise duty, as such, additional duty cannot be charged, is also equally unacceptable as additional duty can always be determined and merely exemption granted in respect of a particular excise duty, cannot come in the way of determination of yet another duty based thereupon. The proposition urged that simply because one kind of duty is exempted, other kinds of duties automatically fall, cannot be accepted as there is no difficulty in making the computation of additional duties, which are payable under NCCD, education cess, secondary and higher education cess. Moreover, statutory notification must cover specifically the duty exempted. When a particular kind of duty is exempted, other types of duty or cess imposed by different legislation for a different purpose cannot be said to have been exempted. [Para 41] [1046-F-H; 1047-AB]
Union of India v. Modi Rubber Limited (1986) 4 SCC
66 : [1986] 3 SCR 587 ; A three-Judge Bench in Rita Textiles Private Limited v. Union of India, (1986) SCC Supp. 557 – relied on.
SRD Nutrients Private Limited v. Commissioner of Central Excise, Guwahati, (2018) 1 SCC 105 : [2017]
11 SCR 43 ; Bajaj Auto Limited v. Union of India & others, (2019) SCC OnLine SC 421, decided on 27.3.2019. [2019] 5 SCALE 325 – per incuriam.
Union of India v. Unicorn Industries (Civil Appeal No. 7432 of 2019), decided on 19.9.2019. (2019)
10 SCC 575 ; Rajasthan High Court in Banswara Syntex Ltd. v. Union of India, (2007) SCC OnLine Raj.
365 ; Mahanagar Railway Vendors’ Union v. Union of India & Ors. (1994) Suppl. 1 SCC 609 ; State of Maharashtra & Ors. v. Mana Adim Jamat Mandal, AIR 2006 SC 3446 : [2006] 2 SCR 1142 ; State of Uttar Pradesh & Ors. v. Ajay Kumar Sharma & Ors. (2016)
15 SCC 289 ; Subhash Chandra & Ors. v. Delhi Subordinate Services Selection Board & Ors. (2009)
15 SCC 458 : [2009] 12 SCR 978 ; Dashrath
Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129 ; [2014] 11 SCR 921 ; Central Board of Dawoodi Bohra Community & Ors. v. State of
Maharashtra & Ors. (2005) 2 SCC 673 : [2004]
6 Suppl. SCR 1054 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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