2011 (11) TMI 568 - AT - Central Excise

Education Cess - Whether Education Cess under Section 93(1) of the Finance (No. 2) Act, 2004 is leviable on jute cess levied under Section 3 of the Jute Manufacturers Cess Act, 1993 for the periods of dispute - Held that - As the Education Cess is calculated on the aggregate duties of excise/customs (excluding certain duties of customs like anti-dumping duty, safeguard duty etc.) levied and collected by the Department of Revenue, only such duties, which are (a) levied and collected as duties of excise/customs, and (b) are both levied and collected by the Department of Revenue should be taken into account for calculating Education Cess - Following decision of COMMISSIONER Versus SAHAKARI KHAND UDYOG MANDLI LTD. 2010 (3) TMI 718 - GUJARAT HIGH COURT - Decided in favour of assessee.

Summary

Issues:
1. Whether Education Cess is leviable on jute cess under Section 3 of the Jute Manufacturers Cess Act, 1993.
2. Whether duties/cesses not collected as duty of excise/customs or collected by a Department other than Department of Revenue should be included for calculating Education Cess.

Detailed Analysis:
Issue 1: The main issue in the appeals filed by the assessees was the levy of Education Cess under Section 93(1) of the Finance (No. 2) Act, 2004 on jute cess imposed under Section 3 of the Jute Manufacturers Cess Act, 1993. The Tribunal considered a similar case where the Gujarat High Court ruled that a specific cess was not considered a duty of excise for the purpose of Education Cess levy. This case law was pivotal in the decision-making process.

Issue 2: Another critical question raised was whether duties or cesses that are not collected as duties of excise/customs or collected by a Department other than the Department of Revenue should be factored in when calculating Education Cess. The Central Board of Excise and Customs (CBEC) provided a clear clarification stating that Education Cess is computed based on duties of excise/customs levied and collected by the Department of Revenue. The Board's clarification, combined with the precedent set by the High Court, favored the appellants in this case.

In conclusion, the Tribunal, after considering the relevant legal provisions, case law, and the CBEC's clarification, ruled in favor of the appellants on both issues. The appeals were allowed, emphasizing that only duties of excise/customs levied and collected by the Department of Revenue should be considered for calculating Education Cess. This judgment provides clarity on the scope and applicability of Education Cess in cases involving specific cesses or duties collected by departments other than the Department of Revenue.