TaxTMI 
TaxTMI 
2013 (4) TMI 482
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.... if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of the Central Excise Act, be determined in accordance with the provision of the Customs Act, 1962 and the Customs Tariff Act, 1975. Under Section 12 of the Customs Act, 1962, except as otherwise provided in this Act or any other law for the time being in force, the duties of customs shall be levied at such rates as may be specified under Customs Tariff Act or any other law for the time being in force on the goods imported into India or exported from India. The Customs Tariff Act, 1975 specifies the various duties of customs leviable on the goods imported into India. Under Section 2 of the Customs Tariff Act, 1975, the basic customs duties are leviable at the rate specified in the First and Second Schedule to the Customs Tariff Act, 1975. Under Section 3(1), any goods imported into. India, in addition to the basic customs duties chargeable under Section 2, would also attract additional customs duty in an amount equal to the excise duty for the time being leviable on like articles ....
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....stoms Tariff Act, 1975, (b) countervailing duty referred to in Section 9 of Customs Tariff Act, 1975, (c) antidumping duty referred to in Section 9A of the Customs Tariff Act, 1975, and (d) the education cess on imported goods. 1.2 The dispute in the present case is as to how the education cess on the excise duty chargeable on the goods cleared by 100% EOU into DTA is to be calculated. According to the Department, first, central excise duty chargeable on the DTA clearance of a 100% EOU is to be calculated by totalling - (a) basic customs duty chargeable on the goods as if imported into India, (b) additional customs duty equal to the central excise duty under Section 3(1) read with 3(2) of the Customs Tariff Act, 1975 plus education cess and S&H cess under Section 93 of Finance Act, 2004 and Section 138 of Finance Act, 2007 @ 2% and 1%, chargeable on the like goods manufactured in India, and (c) education cess and S&H cess @ 2% and 1% respectively on the total of basic customs duty and additional customs duty calculated as above under Section 94 of Finance Act, 2004 and Section 139 of Finance Act, 2007 and then on this total, education cess and S&H cess @ 2% and 1% respectively s....
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....26) E.L.T. 238, on appeal being filed before the Hon'ble Bombay High Court, the Hon'ble High Court had set aside the order and had remanded the matter for de novo consideration in accordance with the law after issue of a general notice enabling any personal adversely affected being given an opportunity of being heard, that the education cess and S&H cess having been levied as surcharge is not a separate levy distinct from the central excise duty and the judgment of the Hon'ble Himachal Pradesh High Court in the case of Indo Farm Tractors & Motors Ltd. v. Union of India reported in 2008 (222) E.L.T. 184 (H.P.) referred to in the referral order is contrary to the ratio of Apex Court's judgment in the case of Sarojini Tea Co. Pvt. Ltd. v. CC, Dibrugarh reported in 1992 (2) SCC 156 wherein Apex Court has held that expression "surcharge" in the context of taxation means an additional imposition, which results in enhancement of tax and the nature of the additional imposition is the same as the tax on which it is imposed as a surcharge, that in view of this, once education cess and S&H cess is added to the sum of the basic customs duty and an Additional customs duty, the question of charg....
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.... a measure of the central excise duty chargeable on the DTA clearances made by a 100% EOU and nature of the duty levied on the goods manufactured and cleared by a 100% EOU into DTA is excise duty and nothing else, that it is well settled law that method adopted by the law makers in recovery of tax cannot alter its character and that since the aggregate of duties of customs on import of the like goods into India is the measure of the excise duty chargeable on the goods cleared by 100% EOU into DTA, on this aggregate of duties of customs, education cess and S&H cess would be chargeable once again, even though the aggregate of duties of customs also include the education cess and S&H cess. He, therefore, pleaded that the judgment of the Tribunal in the case of Sarla Performance Fibers Ltd. (supra) is not correct. 5.1. We have considered the submissions from both the sides and perused the records. The issue for determination is as to whether education cess and S&H Cess is to be levied again in respect of DTA clearances of a 100% EOU on the aggregate of the duties of customs which already includes the education cess and S&H cess. To illustrate, according to the appellant, the duty pa....
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....d or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent, 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) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or th....
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....gate of all duties of excise including special excise duty or any other duty of excise but excluding education cess on exicable goods, which are levied and collected by Central Government in the Ministry of Finance (Department of Revenue) under the provisions of Central Excise Act, 1944 or any other law for the time being in force. Similarly, the education cess and S&H Cess on imported goods is levied as surcharge on aggregate of duties of customs which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue) under Section 12 of the Customs Act, 1962 and any sum chargeable on such goods under any other law for the time being in force as an addition to, and in the same manner as a duty of customs but not including (a) safeguard duty referred to in Section 8B/8C of Customs Tariff Act, 1975, (b) countervailing duty referred to in Section 9 of the Customs Tariff Act, 1975, (c) Anti-dumping duty referred to in Section 9A of the Customs Tariff Act, 1975, and (d) Education Cess on imported goods. Both the Section 93 as well as 94 of the Finance Act, 2004 and Sections 138 and 139 of the Finance Act, 2007 provide that education cess S&H cess on e....
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....p; [Provided that the duties of excise which shall be levied and collected on any [excisable goods which are produced or manufactured, - [(i) * * ** * * *] (ii) by a hundred per cent export-oriented undertaking and [brought to any other place in India], shall be an amount equal to the aggregate of the duties of customs which would be leviable [under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force], on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975)." 7.1 Thus, the measure of central excise duty payable on the DTA clearance of a 100% EOU is the aggregate of duties of Customs chargeable under Customs Act, 1962 and any other law for the time being in force on import of like goods into India and if the rate....
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....pting the above mentioned contentions of the appellant has held that education cess is not chargeable once again on aggregate of duties of customs, which also include the education cess on the total of the basic customs duty and additional customs duty. 8. We do not agree with the Appellant's plea that the education cess and S&H cess being levied as surcharge is not a separate levy, as from the wordings of Section 91 of the Finance Act, 2004 and Sec. 136 of the Finance Act, 2007, it is clear that what has been levied is a cess to be called education cess and S&H cess to fulfil the commitment of the Central Government to provide and finance universalized quality of basic education and Secondary and Higher education cess and this cess is to be levied as to be as surcharge. Thus, the character of this levy is cess and the mode of the levy is surcharge and merely because it is levied as surcharge to finance the Government's commitment to provide universalized quality of basic education and Secondary and Higher education, it cannot be said to be a mere surcharge having the same character as the tax on which it is charged. The education cess and S&H cess could as well have been levied....
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....at the clearance of the goods manufactured by 100% EOU into DTA as deemed imports into India. 10. However, we are not in agreement with the stand of the Revenue for another reason. The charging provisions of education cess and S&H cess are Section 91 of the Finance Act, 2004 and Section 136 of the Finance Act, 2007 respectively according to which,' this levy is a 'cess' levied as surcharge to enable the Central Government to finance its commitment to provide universalized quality of basic education and secondary and higher education. Surcharge on a tax means additional tax on that tax. As discussed above, though education cess and S&H cess being cess to enable the Government to finance its expenditure on providing basic education and secondary and higher education, is a levy different and distinct from the tax on which it is levied as surcharge, the mode or measure of this levy is surcharge at the rate of 2% and 1% on the existing levies i.e. the taxes being collected by the Government as - (a) Central excise duties under Central Excise Act, 1944 or any other law in force; (b) customs duties under Customs Act, 1962 read with Customs Tariff Act, 19....
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....se duty leviable is aggregate of duties of customs charged on import of like goods into India under Customs Act, 1962 read with Indian Customs Tariff Act, 1975 or any other law for the time being in force, this aggregate of duties of customs on which education cess under Section 93 of Finance Act, 2004 and S&H cess under Section 138 of Finance Act, 2007 is to be charged, would not include education cess and S&H cess under Section 94 of Finance Act, 2004 and Section 139 of Finance Act, 2007. In other words, the education cess and S&H cess would be chargeable only once under Section 93 of Finance Act, 2004 and Section 138 of Finance Act, 2007 on the sum of basic customs duty and Additional customs duty. 11. The point referred by the referring bench stands answered as above. (Pronounced on 22-2-2013) 12. Per: Mathew John, Member (T), - While I agree with the final finding as recorded above, I would like to add my reasoning for the same in a different manner in the following paragraphs. 13. The whole matter is centred around Section 3 of Central Excise Act, 1944 in so far as it relates to duties payable on goods cleared from a hundred per cent export oriented undertaking wh....