Education Cess on net service tax after R&D Cess deduction cannot be denied where the issue had already attained finality.

Education Cess and Secondary & Higher Education Cess were held payable on the net service tax after deduction of R&D Cess, because the identical treatment in the assessee's own earlier and later periods had attained finality and the Department had not challenged those orders. On that basis, the Tribunal treated the issue as no longer res integra and held that a contrary demand on the same audit basis could not survive. The impugned demand was therefore unsustainable and was set aside with consequential relief.

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Issues: Whether Education Cess and Secondary & Higher Education Cess were payable on the net service tax after deducting R&D Cess, and whether the demand confirmed against the assessee was sustainable.

Analysis: The issue had already been decided in the assessee's own case for earlier and subsequent periods. The earlier appellate and adjudication orders, which allowed computation of Education Cess and Secondary & Higher Education Cess on the net service tax after deduction of R&D Cess, had attained finality as the Department did not challenge them. The same audit basis and identical controversy had been considered earlier, and the Tribunal treated the matter as no longer res integra. On that footing, the demand confirmed in the impugned order could not survive.

Conclusion: The cess was payable on the net service tax after deducting R&D Cess, and the impugned demand was unsustainable.

Final Conclusion: The appeal succeeded and the demand order was set aside with consequential relief in accordance with law.

Ratio Decidendi: Where identical tax treatment has attained finality in the assessee's own case and the Department has accepted the earlier orders, a contrary demand on the same issue and audit basis cannot be sustained; Education Cess and Secondary & Higher Education Cess are to be computed on the net service tax.

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