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2022 (9) TMI 215 - Central Excise
Valuation - inclusion of paper cess in the calculation of Education Cess and Secondary and Higher Education Cess - Department took a stand that Education Cess is levied on the excise duty and Cess on paper is also a duty of excise, therefore, it should be included - applicability of Board Circular No.978/2/20214-CX (F.No.262/2/2008-CX.8) dated 07.01.2014 - HELD THAT:- In the present case even though the Cess on Paper is a duty of excise, it is not levied by the Department of Revenue, Ministry of Finance. It is levied under a different enactment namely Industries (Development & Regulation) Act, 1951, though it is collected by the Department of Revenue. Paper Cess is not levied by the Department of Revenue, it is levied by the Industrial Development, Ministry of Commerce and Industry. No doubt it is collected by the Department of Revenue, but not levied by it. Hence Paper Cess is not includible. It is noted that the lower authorities were proceeding on an erroneous premise when they considered the Paper Cess as a levy by the Central Government in the Ministry of Finance, Department of Revenue. They obviously lost sight of the Circular No. 978/2/2014-CX, dated 7-1-2014 where it has been clarified that the Education Cess and the Secondary and Higher Education Cess are not to be calculated on cesses which are levied under Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue), but rather only collected by the Department of Revenue in terms of those Acts.
Hon’ble Gujarat High Court in the case of Joshi Technologies International v. Union of India [2016 (6) TMI 773 - GUJARAT HIGH COURT] is squarely applicable to the facts of the present case, where it was held that Crude Oil Cess is not in the nature of excise duty and consequently, the Education Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law. As a necessary corollary, it follows that the provisions of the Central Excise Act, 1944 would not be applicable for refund of such amount paid by mistake. Moreover, since there was no liability to pay Education Cess and Secondary and Higher Secondary Education Cess, the provisions of the Central Excise Act as incorporated in the OIC Act would also not apply to the amount paid by mistake.
The Hon’ble High Court after considering the decision of the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT], allowed the refund claims in an identical situation. Accordingly, in view of the judgement passed by the Hon’ble Gujarat High Court, since Cess on Paper is not a duty of excise, the provisions of Section 11B of the Central Excise Act would not apply.
Appeal allowed - decided in favor of appellant.