clean energy cess

[mahadevan sankaran]

Chennai Port Customs levies Education cess and Higher Education cess on Clean Energy cess on import coal,which works out to Rs 51.50 per MT. Please clarify as to whether such levy of education and higher education cess on another cess,namely,Clean Energy Cess is correct? Mahadevan

[Surender Gupta]

Pl. read section 83 of the Finance Act, 2010, which stipulates that "......a cess to be called the Clean Energy Cess, as duty of excise....". Therefore the nature of clean energy cess is duty of excise which is levied on specified goods being produced. Whereas Eduction cess which was imposed first time in 2004 vide section 93 of the Finance Act (no.2) 2004, stipulated that, Eduction cess shall be calculated on the aggregate of all duties of excise  (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods). Therefore levy of Education cess and Higher Education Cess on import of coal appears to be correct.

[mahadevan sankaran]

But notification no 28/2010-CE and 29/2010-CE both dated 22-06-10 exempt goods to which clean energy cess applies from education cess and higher education cess respectively.

AI Summary

Education cess on clean energy cess: statutory excise characterisation conflicts with exemption notifications for imported coal. Whether education cess and higher education cess may be levied on the Clean Energy Cess charged on imported coal depends on the statutory characterisation of the clean energy charge as a duty of excise and on contemporaneous notifications that exempt goods subject to the clean energy charge from education cess and higher education cess, producing a direct tension between excise-based calculation rules and exemption orders.