Education cess qualifies for export rebate under existing excise rebate rules; later notification was only clarificatory.

Education cess under the Finance Act, 2004 was treated as a duty of excise and made subject to the Central Excise Act and the refund and exemption rules. On that basis, the existing rebate notification under Rule 18 of the Central Excise Rules, 2002 applied to the cess from the date it became leviable, without awaiting the later notification dated 6-9-2004. The later notification was described as clarificatory rather than the source of rebate entitlement. Rebate on education cess for the period from 9-7-2004 to 5-9-2004 was therefore available.

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Issues: Whether education cess levied as a surcharge on excisable goods under the Finance Act, 2004 was eligible for rebate on export under the existing rebate notification and Rule 18 of the Central Excise Rules, 2002 without waiting for the later notification dated 6-9-2004.

Analysis: Education cess under Section 93 was statutorily declared to be a duty of excise, made payable in addition to the other excise duties, and made subject, as far as may be, to the provisions of the Central Excise Act and the rules relating to refunds and exemptions. On that basis, the existing notification granting rebate on duty of excise applied to education cess from the date it became leviable, because the cess bore the character of excise duty and was not an independent levy requiring a fresh enabling notification. The later notification was therefore only clarificatory and not the source of the rebate entitlement.

Conclusion: The denial of rebate on education cess for the period from 9-7-2004 to 5-9-2004 was unsustainable and the assessee was entitled to the rebate.

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