Tribunal Rules Education Cess Not Applicable on Oil Cess

The Tribunal held that education cess and secondary and higher education cess are only applicable to excise duties levied by the Ministry of Finance, Department of Revenue, not on the oil cess imposed by the Ministry of Petroleum. Relying on a Gujarat High Court decision, the Tribunal ruled in favor of the appellant, setting aside the demand of &8377; 21,80,957/- along with interest. The appeal was allowed, overturning the Addl. Commissioner's order and the Commissioner (Appeals)'s decision.

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Issues: Whether education cess and secondary and higher education cess were leviable on oil cess collected under Section 15 of the Oil Industries Development Act, 1974.

Analysis: The levy of education cess and secondary and higher education cess under Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007 applies to the aggregate of duties of excise, but only to cesses treated as duties of excise and levied by the Ministry of Finance, Department of Revenue. Oil cess, though collected as excise duty, is levied under the Oil Industries Development Act, 1974 by the Ministry of Petroleum and Natural Gas and therefore does not form part of the duty of excise for this purpose. The same principle was followed in the cited precedent relied upon by the Tribunal.

Conclusion: Education cess and secondary and higher education cess were not leviable on oil cess, and the demand was unsustainable.

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