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2019 (12) TMI 845 - AT - Central Excise100% EOU - alleged wrong calculation of Education Cess and Higher Education Cess - double taxation - demand of differential amount alongwith interest and penalty - HELD THAT - The issue of levy of Edu. Cess and Higher Edu. Cess thrice time in computing the applicable customs duty as per provisions of Section 3(1) of the Central Excise Act, 1944 in relation to clearance made by a 100% EOU in DTA is no more res integra and covered by the Larger Bench of this Tribunal in the case of KUMAR ARCH TECH PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II 2013 (4) TMI 482 - CESTAT NEW DELHI where it was held that the education cess and S H cess would be chargeable only once under Section 93 of Finance Act, 2004 and Section 138 of Finance Act, 2007 on the sum of basic customs duty and Additional customs duty. Demand set aside - appeal dismissed - decided against Revenue.
Issues:
- Appeal against Order-in-Original regarding calculation of Education Cess and Higher Education Cess on excise duty by a 100% EOU. - Interpretation of provisions under Section 3(1) of the Central Excise Act, 1944. - Applicability of Education Cess and Higher Education Cess on DTA clearances of a 100% EOU. - Analysis of the charging provisions of education cess and S&H cess under the Finance Act, 2004 and Finance Act, 2007. - Consideration of the principle against double taxation in the context of education cess and S&H cess on DTA clearances. Analysis: The case involves an appeal by the Revenue against an Order-in-Original concerning the calculation of Education Cess and Higher Education Cess on excise duty by a 100% Export Oriented Unit (EOU). The appellant, engaged in the manufacture of Phthalic Anhydride, cleared the product to the Domestic Tariff Area (DTA) as per Section 3(1) of the Central Excise Act, 1944, read with a specific notification. The dispute arose when the Revenue alleged that the appellant incorrectly calculated the Education Cess and Higher Education Cess on the excise duty amounting to a significant sum during a specific period. The learned Commissioner dropped the proceedings against the appellant, leading to the Revenue's appeal. In the appeal, the Revenue reiterated its grounds, while the Advocate for the Respondent referred to a precedent set by the Larger Bench of the Tribunal in a similar case. The issue revolved around the levy of Education Cess and Higher Education Cess on DTA clearances by a 100% EOU, which had been addressed in the Kumar Arch Tech Pvt. Ltd. case. The Tribunal analyzed the provisions and observed that the charging provisions of education cess and S&H cess were surcharges enabling the Government to finance basic and higher education. It was highlighted that the levy was distinct from the taxes it was imposed on and should not be charged on itself. The Tribunal emphasized that the intention of the legislature was not to charge education cess on education cess, citing relevant sections of the Finance Acts. Based on the analysis, the Tribunal concluded that the Revenue's appeal lacked merit, and there was no reason to interfere with the Commissioner's order. The principle against double taxation was emphasized, stating that education cess and S&H cess should only be charged once on the sum of basic customs duty and additional customs duty. Therefore, the appeal by the Revenue was rejected, affirming the decision of the learned Commissioner.
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