M/S.Rajyalakshmi Machine Works Pvt. Ltd. Vs. Commissioner of Central Excise, Coimbatore - Court Judgment

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CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnApr-23-2010
Case NumberAppeal No.E/151 of 2009
Judge THE HONOURABLE MS. JYOTI BALASUNDARAM, VICE PRESIDENT
AppellantM/S.Rajyalakshmi Machine Works Pvt. Ltd.
RespondentCommissioner of Central Excise, Coimbatore
Advocates:Shri J. Shankar Raman, Adv. (Proxy). Shri T.H. Rao, SDR.
Excerpt:
the assessees herein failed to pay cess due on clearances effected during the months of may and june, 2007 beyond a period of 30 days from the due date. the removals, therefore, were deemed to have been made without payment of duty and hence a show-cause notice was issued proposing recovery of duty (education cess) and proposing imposition of penalty. the demand of rs.3,54,252/- was confirmed together with interest and a penalty of rs.1 lakh was imposed on the assessees; hence this appeal. 2. i have heard both sides. the submission of the assessees that demand cannot be raised and confirmed under rule 8 of the central excise rules, 2002, for delay in payment of cess, as rule 2 (e) defines duty duty payable under section 3 of the act, while education cess is payable not under section 3 of the central excise act, but under section 91 of the finance act, 1994, is well-founded. although section 93 of the finance act, 2004 sets out that education cess levied under section 91 shall be a duty of excise, since the central excise rules, 2002 confine the definition of duty to duty payable under section 3 of the central excise act, rule 8 is not applicable in the case of delay in payment of cess, which is leviable under the finance act and not under the central excise act. i, therefore, set aside the impugned order and allow the appeal.
Judgment:

The assessees herein failed to pay cess due on clearances effected during the months of May and June, 2007 beyond a period of 30 days from the due date. The removals, therefore, were deemed to have been made without payment of duty and hence a show-cause notice was issued proposing recovery of duty (Education Cess) and proposing imposition of penalty. The demand of Rs.3,54,252/- was confirmed together with interest and a penalty of Rs.1 lakh was imposed on the assessees; hence this appeal.

2. I have heard both sides. The submission of the assessees that demand cannot be raised and confirmed under Rule 8 of the Central Excise Rules, 2002, for delay in payment of cess, as Rule 2 (e) defines duty duty payable under Section 3 of the Act, while education cess is payable not under Section 3 of the Central Excise Act, but under Section 91 of the Finance Act, 1994, is well-founded. Although Section 93 of the Finance Act, 2004 sets out that education cess levied under Section 91 shall be a duty of excise, since the Central Excise Rules, 2002 confine the definition of duty to duty payable under Section 3 of the Central Excise Act, Rule 8 is not applicable in the case of delay in payment of cess, which is leviable under the Finance Act and not under the Central Excise Act. I, therefore, set aside the impugned order and allow the appeal.