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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2024 (11) TMI AT This

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2024 (11) TMI 51 - AT - Central Excise


Issues:
Interpretation of whether education cess and secondary and higher education cess can be levied on automobile cess.

Analysis:
The judgment involves two appeals challenging an order confirming the demand of cess along with interest but setting aside the penalty imposed under Rule 25 of the Central Excise Rules, 2002. The appeals were taken up together as the issues were common. The appellant, engaged in manufacturing light commercial vehicles, cleared goods without paying education cess and secondary and higher education cess on the automobile cess paid. The department issued show cause notices for recovery, leading to the confirmation of the demand of cess, interest, and penalty by the Original authority. The appellate authority upheld the demand of cess and interest but set aside the penalty, leading to the present appeal.

The appellant argued that education cess and SHE cess are not levied on automobile cess as they are collected by the Department of Heavy Industries, not the Ministry of Finance. They relied on circulars clarifying that education cess is only levied on duties collected by the Department of Revenue. The appellant cited various judgments supporting their position that automobile cess should not be subject to education cess. The appellant also argued that the appellate authority erred in relying on a judgment that was later reversed by the Bombay High Court.

The respondent reiterated the findings of the impugned order. The Tribunal considered whether education cess and secondary and higher education cess could be levied on automobile cess. It was noted that automobile cess is not levied under the Finance Act but under the Industries (Development Regulation) Act, unlike education cess and SHE cess which are levied by the Ministry of Finance. Circulars clarified that education cess is only applicable to duties collected by the Department of Revenue. The Tribunal referred to a previous case involving Tafe Ltd. where it was held that education cess is not liable on automobile cess. The Tribunal also noted that the impugned order relied on a judgment that was later reversed by the Bombay High Court.

In conclusion, the Tribunal found that the impugned order was not sustainable in law. It set aside both impugned orders, allowing the appeals of the appellant with any consequential relief as per law.

 

 

 

 

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