Sugar cess remains a separate levy, so procedural incorporation of excise law does not attract education cess.

Sugar cess under Section 3 of the Sugar Cess Act, 1982 is a distinct statutory levy imposed for the Sugar Development Fund and is additional to central excise duty, so it does not form part of the aggregate duties of excise for computing education cess. The Act's incorporation of the Central Excise Act, 1944 applies only to levy and collection machinery and does not alter the substantive character of the cess or convert it into central excise duty. On that basis, education cess is not payable on sugar cess.

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Issues: (i) Whether sugar cess levied under Section 3 of the Sugar Cess Act, 1982 forms part of the aggregate duties of excise for computing education cess; (ii) Whether the levy and collection provisions of the Central Excise Act, 1944 make sugar cess attributable to central excise duty for the purpose of education cess.

Issue (i): Whether sugar cess levied under Section 3 of the Sugar Cess Act, 1982 forms part of the aggregate duties of excise for computing education cess.

Analysis: Section 3 of the Sugar Cess Act, 1982 creates a distinct cess for the purposes of the Sugar Development Fund Act, 1982. Sub-section (2) makes the cess additional to the duty of excise leviable under the Central Excise Act, 1944, showing that it is a separate impost and not part of central excise duty. Section 4 further credits the proceeds to the Consolidated Fund of India, while the Sugar Development Fund Act, 1982 provides for subsequent appropriation of an equivalent amount to the fund. On a conjoint reading of the two enactments, the cess retains its separate character.

Conclusion: Sugar cess does not form part of the aggregate central excise duties for computing education cess.

Issue (ii): Whether the levy and collection provisions of the Central Excise Act, 1944 make sugar cess attributable to central excise duty for the purpose of education cess.

Analysis: Section 3(4) of the Sugar Cess Act, 1982 applies the procedural machinery of the Central Excise Act, 1944 and the rules made thereunder by incorporation only for levy and collection. This legislative device does not alter the substantive nature of the cess or convert it into central excise duty. The cess remains a separate statutory levy notwithstanding the borrowed procedural framework.

Conclusion: The incorporated procedural provisions do not make sugar cess a central excise duty for the purpose of education cess.

Final Conclusion: The appeal failed because no substantial question of law arose, and the Tribunal's view that education cess was not payable on sugar cess was upheld.

Ratio Decidendi: A cess imposed under a special statute remains a distinct levy, and mere incorporation of the Central Excise Act's procedural machinery does not transform it into central excise duty for computing education cess.

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