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2011 (7) TMI 462 - AT - Central ExciseDispute in the present appeal relates to the education cess - Board circular No.345/2/2004-TRU, dt.10.8.04 - since Paper Cess is levied by the Ministry of Industry under the IDR Act, 1951, it is not a duty levied by the Department of Revenue, and hence no education cess could be charged on the same - while calculating the education cess, paper cess levied by the Department of Industrial Development , Ministry of Commerce & Industries, is not required to be taken into consideration - Decided against revenue.
Issues:
Dispute over education cess on paper cess levied under IDR Act, 1951 for the period 1.2.06 to 30.6.08. Interpretation of circular No.345/2/2004-TRU regarding education cess. Applicability of Tribunal's decision in Sahkari Khand Udyog Mandli Ltd. case. Comparison of education cess on sugar cess and paper cess. Consideration of Division Bench decision in Andhra Pradesh Paper Mills Ltd. case. Analysis: 1. The appeal before the Appellate Tribunal CESTAT, Ahmedabad arose from the Revenue's dissatisfaction with the order of the Commissioner(Appeals) concerning the education cess amounting to Rs.14,077/- for the period from 1.2.06 to 30.6.08. The dispute revolved around the imposition of education cess on paper cess paid by the appellant. The Commissioner(Appeals) ruled in favor of the assessee, prompting the Revenue to file the present appeal. 2. The crux of the matter was the interpretation of circular No.345/2/2004-TRU, issued on 10.8.04, which clarified that education cess would only be applicable to duties levied and collected by the Department of Revenue. The appellant contended that since the Paper Cess was imposed by the Ministry of Industry under the IDR Act, 1951, it did not qualify as a duty levied by the Department of Revenue, thus arguing against the imposition of education cess. The Commissioner(Appeals) supported this stance, citing the Tribunal's decision in the Sahkari Khand Udyog Mandli Ltd. case, which held that certain cess levied by other ministries should not be considered for education cess calculation. 3. The Revenue, in its appeal, challenged the reliance on the Sahkari Khand Udyog Mandli Ltd. case, asserting that it pertained to sugar cess, not paper cess as in the present scenario. However, the Tribunal found no merit in this argument, drawing parallels between the issues in both cases and emphasizing that the fundamental question was whether education cess should be computed on specific types of cess not directly linked to the Ministry of Finance. 4. Furthermore, the Tribunal highlighted a prior decision by the Division Bench in the Andhra Pradesh Paper Mills Ltd. case, which established that paper cess levied by the Department of Industrial Development, Ministry of Commerce & Industries, should not be factored in when calculating education cess. This precedent further solidified the position that certain types of cess, including paper cess, fall outside the scope of education cess determination. 5. Considering the settled legal precedents and the consistent interpretation of the relevant laws and circulars, the Tribunal dismissed the Revenue's appeal, affirming that the issue had already been conclusively addressed in previous judgments. The decision underscored the importance of aligning the imposition of education cess with duties specifically levied by the Department of Revenue, excluding other forms of cess imposed by different ministries.
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