Education cess cannot be charged on itself; refund of excess cess paid was upheld as impermissible double taxation.

Education cess, as a surcharge on existing duties, cannot be levied again on an amount that already includes such cess, because that would amount to double taxation without statutory sanction. Applying the binding Larger Bench view under the Finance Act, 2004 and the Finance Act, 2007, the text states that levy of education cess on education cess was impermissible, and the refund of excess cess paid was upheld.

---

---

Issues: Whether education cess could be levied a third time on the same customs clearances and whether the assessee was entitled to refund of the excess cess paid.

Analysis: The dispute was governed by the legal principle that education cess is a surcharge on existing duties and cannot itself form part of the base on which further education cess is charged. The Larger Bench ruling had already held that the charging provisions in the Finance Act, 2004 and the Finance Act, 2007 do not sanction levy of education cess on education cess, as that would amount to taxing the same levy twice over. Applying that binding view, the order granting refund was found to be consistent with law.

Conclusion: The assessee was held not liable to pay education cess for the third time, and the refund relief was upheld.

Ratio Decidendi: Education cess, being a surcharge on existing duties, cannot be levied again on the aggregate of duties that already includes such cess, as that would amount to impermissible double taxation without statutory sanction.

---