CLARIS LIFESCIENCES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India is preferred by the petitioner, which is a Public Limited Company engaged in the business of manufacture of patent or proprietary medicines. The petitioner company operates as 100% export oriented unit ("EOU" for short), where P.P. Medicines are manufactured. The company exports the goods manufactured in EOU. Certain percentage of production is allowed to be sold in Domestic Tariff Area ("DTA" for short) under the EXIM policy and thus the company acquires certain quantities of P.P. Medicines in DTA in accordance with the permission issued by the Development Commissioner, being the officer incharge of the EOU. Section 3(1) of the Central Excise Act levies and collects the Central Excise duty on goods produced or manufactured in India. For goods manufactured by 100% EOU and brought to another place in India, rate of excise duty is applicable as per ClauseII of the proviso to section 3(1) of the Central Excise Act. The company has been paying the excise duty on the sum total of duties of customs and also education cess as well as secondary and higher education cess on customs duty leviable on similar medicines imported into India.

(2.) Dispute was raised as calculations of excise duties were made leviable on DTA clearances made by EOU on the ground that the education cess as well as secondary and higher education cess were leviable on sum total of custom duties.

(3.) Customs Excise & Service Tax Appellate Tribunal ("CESTAT" for short) considered the similar dispute in case of Sarla Performance Fibers Ltd. vs. Commissioner of C.Ex. Vapi, 2010 253 ELT 203 (TriAhmd.) and held that the method suggested by the Revenue for levying above cess for second or third time was incorrect and not in accordance with the scheme of section 3 of the Central Excise Act.