2008 (6) TMI 20 - AT - Central Excise

Liability to pay education cess on paper cess revenue plea is that Commissioner (Appeals) has erred in holding that paper cess is not excise duty and therefore education cess cannot be charged on the same revenue plea is acceptable - it very clear that education cess is nothing but excise duty - appeal filed by the Revenue is allowed education cess should be calculated by adding some other cess also - hence assessee is liable to pay education cess on paper cess

Summary

Issues: Revenue appeal against Commissioner (Appeals) order on education cess liability for paper cess during a specific period.

Analysis:
1. Issue of Education Cess Liability: The Revenue appealed against the Commissioner (Appeals) order allowing the claim of M/s. R.A. Shaikh Paper Mills Pvt. Ltd. that they are not liable to pay education cess on paper cess from 9-7-2004 to 31-3-2005. The Revenue contended that education cess should be charged on paper cess as it is considered excise duty, citing relevant circulars and judicial precedents. The respondent, however, relied on judgments of the Hon'ble High Court of Delhi to support their position.

2. Interpretation of Circular and Judicial Precedents: The ld. JDR argued that the Commissioner (Appeals) erred in not considering the clarification issued by the Board, which stated that education cess should be calculated on the aggregate due of excise duty/customs. The Tribunal noted that the Apex Court had previously held that the cess levied under the Industries (Development and Regulations) Act, 1951 is a duty of excise, emphasizing that education cess is akin to excise duty. The Tribunal distinguished the issue in the cited case of M/s. Pasupati Fabrics Ltd., highlighting that the question was not about adding cess for collecting another cess.

3. Legislative Provisions and Conclusion: The Tribunal referenced Clause 83 of the Finance Act, which clarified that education cess on excisable goods is a duty of excise, reinforcing the view that education cess is indeed excise duty. Consequently, the Tribunal allowed the appeal filed by the Revenue, emphasizing that education cess should be calculated based on excise/customs dues. The judgment was pronounced on 9-6-2008 by the Appellate Tribunal CESTAT, Ahmedabad, with detailed analysis and references to legal provisions and precedents to support the decision.