Education cess cannot be charged on automobile cess when it is not part of the excise duty base.

Education cess and secondary and higher education cess were held not leviable on automobile cess because automobile cess is imposed under the Industries (Development and Regulation) Act, 1951 and the Automobile Cess Rules, 1984, not as a duty of excise or customs levied and collected by the Department of Revenue. Relying on Circular No. 978/2/2014-CX and prior precedent, the tribunal treated automobile cess as outside the excise-duty base for computing such cesses. The demand was unsustainable, and the impugned demand and consequential orders were set aside.

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Issues: Whether education cess and secondary and higher education cess are leviable on automobile cess.

Analysis: Automobile cess was levied under Section 9(1) of the Industries (Development and Regulation) Act, 1951 read with Rule 2(c) of the Automobile Cess Rules, 1984, whereas education cess and secondary and higher education cess were levied by the Ministry of Finance on the aggregate of duties of excise and customs levied and collected by the Department of Revenue. Circular No. 978/2/2014-CX dated 07.01.2014 clarified that education cess is chargeable only on duties of excise or customs which are both levied and collected by the Department of Revenue. The earlier circular and the cited precedents were relied on to hold that automobile cess does not form part of the excise duty base for such cesses.

Conclusion: Education cess and secondary and higher education cess are not leviable on automobile cess, and the demand could not be sustained.

Final Conclusion: The impugned demand and the consequential orders were set aside, and the assessee succeeded in both appeals.

Ratio Decidendi: A cess levied under a statute other than the Finance Act cannot be included in the aggregate of duties of excise for charging education cess or secondary and higher education cess unless it is itself levied and collected as part of the relevant excise levy.

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