Exemption in respect of coal and some coal products from Education cess and Higher Education Cess.

[C.A. DEV KUMAR KOTHARI]

Education cess and higher Education cess:

In 2004 and 2007 respectively these cesses were imposed vide budget proposals. These cesses were imposed on direct and indirect taxes. The relevant provisions in relation to Central Excise Duty are found in  sections 91 and 93 of the Finance (No.2) Act, 2004 (23 of 2004) and sections 136 and 138 of the Finance Act, 2007 (22 of 2007).

NOTIFICATIONS NO. 28 and 29 of 2010 /CE Dated : June 22, 2010

The Central government has vide above notifications exempted from Education cess and Higher Education cess certain coal and coal products in public interest.

Notification no. 28 of 2010 reads as follows:

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sections 91 and 93 of the Finance (No.2) Act, 2004 (23 of 2004), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010) from the Education Cess leviable thereon under the said sections 91 and 93 of the said Finance (No.2) Act.

Notification no. 29 of 2010 reads as follows:

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sections 136 and 138 of the Finance Act, 2007 (22 of 2007), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010) from the Higher Education Cess leviable thereon under the said sections 136 and 138 of the said Finance Act.

We find that both the notifications are on the same line with necessary modifications in relation to applicable provisions. However, any specific date has not been mentioned for the applicability of the exemption. Therefore, it can be presumed that the exemption will apply immediately.

The items for which benefit is allowed are mentioned in the above referred Tenth Schedule which is reproduced below:

 

THE TENTH SCHEDULE

[See section 82(3) and (5)]

NOTES:

1. In this Schedule, "Chapter", "heading", "sub-heading" and "tariff item" mean respectively a Chapter, heading, subheading and tariff item of the First Schedule to the Central Excise Tariff Act.

2. The rules for the interpretation of the First Schedule to the Central Excise Tariff Act, the Section and Chapter Notes and the General Rules for the Interpretation of the First Schedule shall apply to the interpretation of this Schedule.

Sl. No.	Chapter, heading, sub-heading or tariff item	Description of goods	Rate
(1)	(2)	(3)	(4)
1.	2701	Coal; briquettes, ovoids and similar solid fuels manufactured from coal	Rs. 100 per tonne
2.	2702	Lignite, whether or not agglomerated, excluding jet	Rs. 100 per tonne
3.	2703	Peat (including peat litter), whether or not agglomerated	Rs. 100 per tonne

 

Analysis of items for which exemption is granted:

The items are analyzed below:

In case of Coal:

Coal;

briquettes, manufactured from coal.

ovoids  manufactured from coal.

similar solid fuels manufactured from coal.

In case of Lignite -

Agglomerated  Lignite

Non agglomerated lignite

But jet is excluded that means Cess will be applicable in case of  jet

In case of Peat:

Agglomerated Peat (including peat litter),

 Non agglomerated Peat (including peat litter),

 

 

Relevant provisions:

For easy reading and reference the relevant notifications and some provisions are reproduced below:

Notification - Central Excise - CE

Exempts of all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010)

NOTIFICATION NO. 28/2010-Central Excise

Dated : June 22, 2010 

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sections 91 and 93 of the Finance (No.2) Act, 2004 (23 of 2004), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010) from the Education Cess leviable thereon under the said sections 91 and 93 of the said Finance (No.2) Act.

F.No.354/72/2010-TRU

(K.S.V.V. Prasad)

Under Secretary to the Government of India 

 

 

Exempts of all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010)

NOTIFICATION NO. 29/2010-CX

Dated: June 22, 2010

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sections 136 and 138 of the Finance Act, 2007 (22 of 2007), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods specified in the Tenth Schedule to the Finance Act, 2010 (14 of 2010) from the Higher Education Cess leviable thereon under the said sections 136 and 138 of the said Finance Act.

F.No.354/72/2010-TRU

(K.S.V.V. Prasad)

Under Secretary to the Government of India

 

THE FINANCE ACT, 2010

THE TENTH SCHEDULE - [See section 82(3) and (5)]

THE TENTH SCHEDULE

[See section 82(3) and (5)]

NOTES:

1. In this Schedule, "Chapter", "heading", "sub-heading" and "tariff item" mean respectively a Chapter, heading, subheading and tariff item of the First Schedule to the Central Excise Tariff Act.

2. The rules for the interpretation of the First Schedule to the Central Excise Tariff Act, the Section and Chapter Notes and the General Rules for the Interpretation of the First Schedule shall apply to the interpretation of this Schedule.

Sl. No.	Chapter, heading, sub-heading or tariff item	Description of goods	Rate
(1)	(2)	(3)	(4)
1.	2701	Coal; briquettes, ovoids and similar solid fuels manufactured from coal	Rs. 100 per tonne
2.	2702	Lignite, whether or not agglomerated, excluding jet	Rs. 100 per tonne
3.	2703	Peat (including peat litter), whether or not agglomerated	Rs. 100 per tonne

 

Central Excise Act, 1944

Section 5A. Power to grant exemption from duty of excise.-

(1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon:

xxxxx

 (5) Every notification issued under sub-section (1) or sub-Section (2A) shall,—

(a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette;

(b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations, Customs and Central Excise, New Delhi, under the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963).

(6) Notwithstanding anything contained in sub-section (5), where a notification comes into force on a date later than the date of its issue, the same shall be published and offered for sale by the said Directorate of Publicity and Public Relations on a date on or before the date on which the said notification comes into force.

 

 

THE FINANCE ACT, 2007 (No 22 OF 2007)

CHAPTER VI

SECONDARY AND HIGHER EDUCATION CESS

Secondary and Higher Education Cess.

136. (1) Without prejudice to the provisions of sub-section (12) of section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Secondary and Higher Education Cess, to fulfil the commitment of the Government to provide and finance secondary and higher education.

(2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilise, such sums of money of the Secondary and Higher Education Cess levied under sub-section (12) of section 2 and this Chapter for the purposes specified in sub-section (1) as it may consider necessary.

THE FINANCE ACT, 2007 (No 22 OF 2007)

Secondary and Higher Education Cess on excisable goods.

138. (1) The Secondary and Higher Education Cess levied under section 136, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985, being goods manufactured or produced, shall be a duty of excise [in this section referred to as the Secondary and Higher Education Cess on excisable goods), at the rate of one 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 chargeable under section 93 of the Finance (No. 2) Act, 2004 and Secondary and Higher 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 or under any other law for the time being in force. ( 5 of 1986. 23 of 2004. 1 of 1944.)

(2) The Secondary and Higher 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 or any other law for the time being in force and the Education Cess chargeable under section 93 of the Finance (No. 2) Act, 2004. ( 1 of 1944. 23 of 2004)

(3) The provisions of the Central Excise Act, 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 Secondary and Higher 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 the rules made thereunder, as the case may be. ( 1 of 1944)

THE FINANCE (No. 2) ACT, 2004

CHAPTER VI

EDUCATION CESS

91. Education Cess.-

(1) Without prejudice to the provisions of sub-section (11) of section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfil the commitment of the Government to provide and finance universalised quality basic education.

(2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilise, such sums of money of the Education Cess levied under sub-section (11) of section 2 and this Chapter for the purposes specified in sub-section (1), as it may consider necessary.

Statutory Provisions

THE FINANCE (No. 2) ACT, 2004

93. Education Cess on excisable goods.-

(1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured 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 the rules, as the case may be.