IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 4TH JANUARY 2010 / 14TH POUSHA 1931 WP(C).No. 8308 of 2006(L) ---------------------------------- PETITIONER(S): ------------------------ FCI OEN CONNECTORS LIMITED, P.B.NO.1958, THYKOODAM, VYTILLA, COCHIN-682 019, REPRESENTED BY ITS MANAGING DIRECTOR MR.P. GEORGE VARGHESE. BY MR.A.M.SHAFFIQUE, SENIOR ADVOCATE BYADV.MR.E.K.NANDAKUMAR MR.A.K.JAYASANKAR NAMBIAR RESPONDENT(S): ------------------------- 1. THE UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, (DEPARTMENT OF REVENUE) NORTH BLOCK, NEW DELHI-110 001. 2. THE COMMISSIONER OF CENTRAL EXCISE (APPEALS), CENTRAL REVENUE BUILDINGS, I.S. PRESS ROAD, COCHIN-682 035. 3. THE DY.COMMISSIONER OF CENTRAL EXCISE MUVATTUPUZHA DIVISION, K.P.C. TOWERS, MUVATTUPUZHA-686 661. 4. THE JT.SECRETARY TO THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) 14, HUDCO VISHALA BUILDING, B WING, 6TH FLOOR, BIKAJI CAMA PLACE, NEW DELHI-110 066. ADV. SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR SRI.ABRAHAM THOMAS, CGC FOR R THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/08/2009, THE COURT ON 04/01/2010 DELIVERED THE FOLLOWING: W.P.(C) NO.8308/2006 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE NOTIFICATION 40/2001 CE (NT) DTD. 26.6.01. P2:- COPY OF THE NOTIFICATION 19/2004 CE(NT) DTD. 6.9.04. P3:- COPY OF THE ORDER DTD. 22.8.05 OF THE 2ND RESPONDENT IN A.NO.1-20/05. P4:- COPY OF THE ORDER NOS. 3-22/2006 DTD. 30.1.06 OF THE 4TH RESPONDENT . P5:- COPY OF THE ORDER DTD. 13.1.06 OF THE IST RESPONDENT , F.NO.232/16/2004-CX 7. TRUE COPY P.S. TO JUDGE tss C.K.ABDUL REHIM, J. ------------------------------ W.P.(C)No.8308 OF 2006 ------------------------------ Dated this the 4th day of January, 2010 J U D G M E N T ---------------------- 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