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of <h1>Tribunal exempts Education Cess on service tax refunds, granting relief to appellants</h1> <h3>Cauvery Coffee Traders Versus Commissioner of Central Excise, Mangalore.</h3> Cauvery Coffee Traders Versus Commissioner of Central Excise, Mangalore. - 2013 (31) S.T.R. 126 (Tri. - Bang.) Issues:Recovery of Education Cess and Secondary & Higher Education Cess components from refunds sanctioned by the original authority.Analysis:The appeal was filed against two separate Orders-in-Revision dated 17.9.2009 and 30.11.2009 by the Commissioner of Central Excise, Mangalore, directing the recovery of Education Cess and Secondary & Higher Education Cess components totaling Rs. 14,135/- and Rs. 20,412/- respectively from refunds sanctioned by the original authority. The original authority had granted a refund of service tax, including the mentioned components, paid by the appellant in accordance with Notification No. 41/2007-ST dated 6.10.2007 for service tax on input services utilized for exported goods.The learned Superintendent (AR) presented that the Central Board of Excise and Customs (CBEC) had issued Circular No. 134/03/2011-ST dated 8.4.2011, clarifying that the entire service tax, along with Education Cess and Secondary & Higher Education Cess, was exempted under Notification No. 41/2007-ST dated 6.10.2007. The Circular emphasized that Education Cess should not be recovered when the entire service tax is exempted, as Education Cess is levied and collected as a percentage of service tax. Therefore, where service tax is exempted, Education Cess should also be considered exempt.Based on the above clarification from the CBEC, the Tribunal found merit in the appeals filed by the party. Consequently, the Commissioner's orders for the recovery of the Education Cess and Secondary & Higher Education Cess components from the refunds sanctioned were set aside. The appeals were allowed with consequential relief as per the law.
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