Education Cess not chargeable on Tea Cess where the levy is outside Department of Revenue collections.

Education Cess under section 93 of the Finance Act, 2004 is computed only on duties of excise or customs levied and collected by the Department of Revenue, and Tea Cess under section 25 of the Tea Act, 1953 does not fall within that base because it is levied by the Central Government in the Ministry of Commerce. A Board circular reinforced that only revenue duties of excise or customs are includible. On that reasoning, Education Cess was not payable on Tea Cess and the demand was unsustainable.

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Issues: Whether Education Cess was leviable on Tea Cess collected under the Tea Act, 1953.

Analysis: Education Cess under Section 93 of the Finance Act, 2004 is computed on the aggregate of duties of excise or customs levied and collected by the Department of Revenue. Tea Cess under Section 25 of the Tea Act, 1953 is levied by the Central Government in the Ministry of Commerce, and the Board circular clarified that only duties levied and collected as excise or customs by the Department of Revenue are to be included for this purpose. The lower authorities proceeded on the mistaken premise that Tea Cess was a levy by the Department of Revenue.

Conclusion: Education Cess was not payable on Tea Cess and the demand was unsustainable, in favour of the assessee.

Ratio Decidendi: A cess not levied and collected as a duty of excise or customs by the Department of Revenue cannot be included in the base for Education Cess under Section 93 of the Finance Act, 2004.

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