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2016 (12) TMI 1851 - AT - Central ExciseLevy of Education cess in addition to duty under the compounded levy scheme - HELD THAT - The issue decided in the case of Commissioner Central Excise Jaipur-II Vs. Shri Ram Steel Industries 2010 (7) TMI 416 - CESTAT NEW DELHI where it was held that education cess and higher education cess cannot be said to be part of the compounded levy determined under the compounded levy scheme in terms of Notification No. 34/2001-C.E. dated 28-6-2001 read with Rule 15 of the said Rules and Education Cess to be levied on compounded levy. Demand upheld - appeal allowed - decided in favor of Revenue.
Issues:
Whether manufacturers under compound levy scheme are liable to pay education cess in addition to the rate fixed under the notification. Analysis: The appeal was filed by Revenue against the Order passed by the Commissioner (Appeals), Jaipur, concerning 43 manufacturers of SS Cold Rolled Patta/Patti under Sub Heading No. 7219.90 of the Central Excise Tariff. These manufacturers opted for payment under the compound levy scheme as per notification no. 34/2001 CE dated 28.6.2001. The dispute revolved around whether these manufacturers are obligated to pay education cess in addition to the fixed rate under the notification. The Commissioner (Appeals) allowed the refund claims for cess, which the original authority rejected. The Revenue challenged this decision in the present appeal. During the hearing, the ld. AR for Revenue argued that the issue was decided in favor of Revenue by the Tribunal in a previous case. The Tribunal's decision highlighted that the compounded levy scheme was based on Rule 15 of the Central Excise Rules, which specifically refers to duty payable under Section 3 of the Central Excise Act, 1944. This Act pertains to duties specified in the Central Excise Tariff Act, 1985. The Tribunal emphasized that education cess levied under the Finance Act is not part of the duty payable under Section 3 of the Central Excise Act. The Tribunal clarified that the compounded levy scheme does not discharge the liability for education cess or higher education cess. The Tribunal further explained that the term "duty" in the compounded levy scheme refers to duties payable under Section 3 of the Central Excise Act, which includes duties specified in the Central Excise Tariff Act. As education cess is imposed under separate Finance Acts, it does not fall under the duty payable under the compounded levy scheme. The Tribunal emphasized that the scheme under Rule 15 of the Central Excise Rules applies to duties under Section 3 of the Act and does not grant exemption from duties under other statutes. Therefore, the Tribunal held that the Commissioner (Appeals) erred in allowing the refund claims for education cess, and the impugned order was set aside. In conclusion, the Tribunal, following the precedent set by a coordinate bench, allowed the appeal filed by Revenue, setting aside the impugned order and ruling that manufacturers under the compound levy scheme are not exempt from paying education cess in addition to the fixed rate under the notification. Judgment: The Tribunal allowed the appeal filed by Revenue, setting aside the Commissioner (Appeals) order and ruling that manufacturers under the compound levy scheme are liable to pay education cess in addition to the rate fixed under the notification.
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