2011 (2) TMI 769 - AT - Central Excise

Levy of education cess - Whether the appellant is liable to pay education cess again on the amount which has been worked out by calculating the customs duty payable on the goods in respect of clearances made by 100% EOU to domestic tariff area - once the measure of Customs duty equivalent to Central Excise duty leviable on the like goods has been worked out, the question of levying education cess separately in respect of clearances by 100% EOU to DTA does not arise - Decided in favor of assessee.

Summary

Issues:
1. Whether the appellant is liable to pay education cess again on the amount calculated for customs duty payable on goods cleared by 100% EOU to domestic tariff area.

Analysis:
The Appellate Tribunal CESTAT, Ahmedabad, presided over by Mrs. Archana Wadhwa and Mr. B.S.V. Murthy, addressed the issue of education cess liability in the case. The appellants had already deposited a significant amount towards the confirmed duty, and the Tribunal waived the pre-deposit condition for the balance amount, considering the deposit as sufficient under Section 35F of the Central Excise Act, 1944. The Tribunal noted that the issue in question had been settled in a previous decision and proceeded to decide the appeal based on that precedent.

The central issue revolved around whether the appellant was obligated to pay education cess again on the amount calculated for customs duty payable on goods cleared by a 100% Export Oriented Unit (EOU) to the domestic tariff area (DTA). The lower authorities had ruled in favor of imposing education cess even after determining the measure of customs duty for calculating central excise duty. Both parties agreed that the matter had been settled by a prior decision of the Tribunal in the case of M/s. Sarlaa Performance Pvt. Limited. In that case, it was established that once the measure of customs duty equivalent to central excise duty on similar goods was determined, the separate levy of education cess for clearances by 100% EOU to DTA was unnecessary.

Given the clear precedent set by the Tribunal in the cited case, the appeal was allowed in favor of the appellant, granting consequential relief. The Tribunal disposed of the stay petition and the appeal in the manner outlined in the judgment, providing a definitive resolution to the issue at hand. The decision was dictated and pronounced in the court, bringing closure to the legal proceedings in this matter.