Cesses on Excise Duty - Is there no levy?
Exemption under section 5A
Withstanding to the facts expressed by the author, I humbly express my opinion as under;
Cess levied u/s. 93 & u/s. 138 of the finance acts ibid is exempted, but u/s. 94 & u/s. 139 is not exempted.
EOUs removing the goods to DTA, pays the ‘duty of excise’, as per notification No.23/2003-C.E. and the notification itself is an exemption notification, issued under Sec. 5A of CEA, wherein it exempts the ‘duty of excise’ payable anything in excess of the duties specified at column(4) of the Table.
For example EOUs removing the goods under Sr.No.2 of the table, liable to pay the ‘duty of excise’, which is equal to the aggregate duties of Customs leviable on like goods, as if imported, subject to the computations given thereof.
Adhering to the Department interpreted computation method of three times cesses on DTA sale, the 1st & 3rd time cesses have been exempted with effect of the Notification No. 14/2015-C.E. & No. 15/2015-C.E. However the 2nd time cesses, remains, as the Cesses payable on the aggregate duties of Customs u/s. 94 & u/s. 139 respectively, is not exempted for imported goods, hence same is to be counted while computing the aggregate ‘duties of excise’.
Prior to the budget cesses payable on customs duties u/s. 94 & u/s. 139 have been specifically exempted for computation ‘duty of excise’ for the EOUs
removing the goods to DTA, vide Sl. 1A & 1B of the notification No.23/2003-C.E. Now, it has been withdrawn, to levy the cesses on par with the goods if imported, in order to give to effect of the withdrawal of the similar exemption given for imported goods under customs notification No. 13/2012 & 14/2012 exempting the cesses on customs duties.
And there is no significance for restoration of 1A & 1B, when EOUs have to pay the duties on ‘duty of excise’ which is equal to the aggregate duties of Customs leviable on like goods, as if imported.
It is apparent that, the Gov’t wants to exempt cesses on central excise duties & levy on import duties.
(Rate of duties payable is 18.67%; if the BCD is 10% & SAD is not computed, assuming sales tax payable.)
Sub rule 7(a) of Cenvat credit rule 3 specified the Cenvat credit eligibility for the DTA units, wherein education cess leviable on the customs duties u/s. 94 & u/s. 139 of Fin Act ibid is not eligible for Cenvat credit. Hence accumulation of Cenvat credit at DTA buyer doesn’t arise.
vijay shettigar
18/03/2015
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