By TIOL News Service

AHMEDABAD, MAY 31, 2013: THE appellant is engaged in manufacture of embroidery fabrics and was working under Compounded Levy Scheme and was making payment of duty in terms of Notification No.33/2001, dt.28.06.01, according to which they were required to pay the duty at Rs.45/- per shift, which was fixed based on the meter length of the machine as required under the notification. The appellants are in appeal against the decision of the lower authority that the appellant is liable to pay 15% of the Excise duty payable towards AED (T&TA).

The appellant's contention is that the amount of duty fixed under Compounded Levy Scheme Notification No.33/01-CE, dt.28.6.01 is total amount of duty payable and therefore it includes all types of Excise duties and hence the demand of AED is not correct.

The Member (T) held that as per Rule 2(e) of CER, "duty means the duty payable under Section 3 of the Act. Under Section 3 of the Act, the duty includes only duties specified in 1st and 2nd Schedule of CETA, 1985. Therefore, the Commissioner's order is logical and legal.

However, Member (J) held that identical provisions of Section 129 of the Finance Act, 2001, introducing National Calamity Contingent Duty was the subject matter of the Tribunal's decision in 2007-TIOL-1422-CESTAT-BANG . This decision squarely applies to the present case and there is no requirement to pay AED.

In view of the difference of opinion, the matter was referred to the Third Member.

The Third Member held:

The preamble to the notification 33/2001 CE talks about an option to the assessee to pay duty of excise on the basis of meter length. The duty of excise has been held to be, by the various judicial pronouncement has to include all the duties which have been levied and collected as per the act or parliament. Central Board of Excise & Customs by exercising the powers under Section 37(B) of the Central Excise Act, 1944, vide their circular No.60/1/2006-CX dated 13.01.06 have specifically stated none of the duties leviable like NCCD, AED etc is required to be paid on export of goods under bond under rule 19 of the Central Excise Rules, 2002, rule 19 of the Central Excise Rules, 2001 and rule 13 of the Central Excise Rules, 1944."

Further, it is seen that clause 3 of notification No.33/2001-CE specifically reads that such payment shall be in full discharge of his liability or the duty leviable on his production of the embroidery during the said shift. This clause needs to read with the words used in the preamble to the notification, and holistic reading will indicate that an assessee need not discharge any further duty under AED (T&TA), on his application under notification No.33/2001-CE being accepted by authorities.

Thus, by majority, the Tribunal allowed the appeal.

(See 2013-TIOL-813-CESTAT-AHM)