2018 (5) TMI 1356 - AT - Central Excise

100% EOU - demand of education cess and higher education cess on the duty of excise leviable under the aforesaid proviso for the third time - Held that - the issue of leviability of education cess and higher education cess for third time on the duty of excise under proviso to Section 3(1) of the Act in respect of the clearance of goods in DTA made by 100% EOU is no longer res integra and has been decided in the favor of the assessee by this Tribunal in the case of Sarla Performance Fibers Ltd. 2010 (2) TMI 335 - CESTAT, AHMEDABAD , where it was held that Aggregate of custom duties once worked out, question of arriving at quantum of excise duty by adding education cess again not arises. Education cess not payable for third time as contended by the department - demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues: Leviability of education cess and higher education cess on duty of excise for third time on goods cleared in DTA by 100% EOU.

Analysis:
1. Facts of the Case: The appellant, a 100% Export Oriented Unit engaged in manufacturing Thread Rolling Dies, cleared goods in DTA without paying education cess and higher education cess on excise duty as per Section 3(1) of the Central Excise Act, 1944. A show cause notice was issued demanding the cess on excise duty, which was confirmed with interest and penalty by the adjudicating authority. The Commissioner (Appeals) upheld this decision, leading to the current appeal.

2. Appellant's Submission: The appellant's advocate argued that the issue aligns with previous Tribunal judgments, specifically citing the cases of Sarla Performance Fibers Ltd, Kumar Arch Tech Pvt Ltd, and Godrej Industries Ltd, where similar issues were decided in favor of the assessee.

3. Respondent's Stand: The A.R. reiterated the findings of the Commissioner (Appeals) in support of the original decision.

4. Tribunal's Decision: After hearing both sides and examining the records, the Tribunal referred to the judgments in Sarla Performance Fibers Ltd, Kumar Arch Tech Pvt Ltd, and Godrej Industries Ltd. The Tribunal concurred with the previous decisions, emphasizing that education cess and higher education cess cannot be levied multiple times on the same duty of excise. The Tribunal highlighted that the cess is a surcharge and part of the customs duty, hence charging it again would be improper. Therefore, the order of the Commissioner (Appeals) was deemed unsustainable and set aside, allowing the appeal in favor of the appellant.

5. Conclusion: The Tribunal's decision clarified the legal position on the levy of education cess and higher education cess on excise duty for goods cleared in DTA by a 100% EOU. The judgment relied on precedents to establish that charging the cess multiple times on the same duty is not permissible under the law. This comprehensive analysis provides clarity on the issue and sets a precedent for similar cases in the future.