Education and higher education cess exemption was read narrowly for coal duty, while penalty was set aside.

The 2010 Central Excise exemption notifications were interpreted as extending Education Cess and Secondary & Higher Education Cess only in relation to Clean Energy Cess on coal, and not to Education Cess and Secondary & Higher Education Cess payable on Central Excise duty. The later 2015 notifications, which specifically exempted such cesses on excisable goods and rescinded the earlier notifications, supported that narrower reading. Accordingly, the exemption claim was not accepted for the Central Excise duty demand, while the penalty was held to be unwarranted and was set aside.

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Issues: Whether the exemption under Notifications No. 28/2010-Central Excise and No. 29/2010-Central Excise extended to Education Cess and Secondary & Higher Education Cess on Central Excise duty payable on coal, and whether penalty was leviable.

Analysis: The Tribunal followed the earlier decision holding that the 2010 notifications exempted Education Cess and Secondary & Higher Education Cess only in relation to Clean Energy Cess on coal, and not the Education Cess and Secondary & Higher Education Cess payable on Central Excise duty. It noted that later notifications in 2015 were specifically issued to exempt such cesses on excisable goods and to rescind the earlier notifications, which supported the view that the 2010 exemption did not cover Central Excise duty. On penalty, the Tribunal found no justification for its levy.

Conclusion: The exemption claim was rejected as to the duty demand, which was upheld, but the penalty was set aside.

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