TMI Blog2013 (4) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Finance Act, 2004 and Section 136 of the Finance Act, 2007, as when a new tax is introduced as surcharge on the existing levies, the base on which the new levy as surcharge is to be calculated will include only the existing levies, not the new levy. As decided by the Apex court in the Jain Brothers v. U.O.I., reported in [1969 (11) TMI 1] has held that there can be no objection for double taxation if the legislature has distinctly enacted it, but while interpreting general words of taxation, the same cannot be so interpreted as to tax the subject twice over to the same tax. Thus, this principle which has to be kept in mind while calculating education cess and S H cess on DTA clearances of a 100% EOU. Since the DTA clearance of a 100% EOU attract central excise duty and in terms of proviso to Section 3(1) of Central Excise Act, 1944, the measure of the excise 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the excise duty for the time being leviable on like articles if produced or manufactured in India and under Section 3(2) if this duty is at ad valorem rate, the same shall be calculated on the amount equal to the value of the imported articles determined under Section 14(1) of the Customs Act, 1962 or the Tariff value fixed under Section 14(2), as the case may be, plus any customs duty chargeable under Section 12 of the Customs Act, 1962 and any sum chargeable on that article under any law for the time being in force as an addition to and in the same manner, as duty of customs but not including the duty referred to in sub-section (1), (3) and (5) of Section 3 and safeguard duty, countervailing duty and anti-dumping duty referred to in Section 8B/8C, Section 9 and Section 9A respectively of the Customs Tariff Act. These are other additional customs duties under sub-section (3) (5) of Section 3 and Section 3A attracted in same cases, but we are not concerned with the some in this case. 1.1 By Section 91 read with Section 93, 94 and 95 of Finance Act, 2004, the Central Government levied education cess as surcharge at the rate of 2% of the aggregate duties of central excise on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s total, education cess and S H cess @ 2% and 1% respectively shall be payable again under. Section 93 of Finance Act, 2004 and Section 138 of Finance Act, 2007. According to the appellant, however, since the education cess and S H cess being charged as surcharge are basically central excise duty and since while calculating the aggregate of duties of customs, education cess and S H cess @ 2% and 1% respectively has already been added to the total of basic customs duty and additional customs duty, there is no need to charge the Education Cess and S H cess once again on the central excise duty calculated in the above manner. 2. This matter had been heard by Division Bench on 17-2-2011 and by order dated 27-7-2011 [2011 (273) E.L.T. 574 (Tri.-Del.)] the Division Bench referred the following questions of law to the Larger Bench for decision :- "Whether education cess and S H cess are chargeable on DTA clearance made by 100% EOU even if such cesses were added while calculating the aggregate duties of customs payable under the Customs Act or any other law in force at the time imported or like goods." 3. Heard both sides. 4. Shri Prakash Shah, Advocate and Ms. Sukriti Das, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Additional customs duty, the question of charging education cess and S H cess once again does not arise because once it is enhanced, it is part of the relevant type of duty, that the proviso to Section 3(1) of the Central Excise Act treats the goods manufactured and cleared from a 100% EOU into DTA at par with the imported goods for the purpose of determining the quantum of duty and therefore, there is no question of adding education cess and S H once again when the education cess and S H has already been added to the aggregate of duties of customs i.e. basic customs duty plus additional customs duty, that when Section 93 and Section 94 of the Finance Act, 2004 and similarly Section 138 and 139 of the Finance Act, 2007 specifically provide for exclusion of education cess and S H cess respectively from the aggregate of the excise duty or customs duty, in respect of excisable goods and imported goods respectively, there is no justification for charging education cess and S H cess once again on the aggregate of duties of customs which had already included education cess and S H cess and that in view of the above submissions, the view expressed by coordinate bench in the Sarla Perfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strate, according to the appellant, the duty payable on the DTA clearances made by a 100% EOU is as under :- Basic customs duty 2.5% Addl. Customs duty u/s 3(1) read with Sec.3(2) of Customs Tariff Act, 1975 (equal to central excise duty leviable on like goods produced or manufactured in India) 16% on (transaction value plus basic customs duty) Education cess under Sec. 93 of Finance Act, 2004 2% of Addl. customs duty S H Education cess under Sec. 138 of Finance Act, 2007 1% of Addl. customs duty Aggregate of above duties of customs say X Education cess S H education cess chargeable under Sec. 94 of Finance Act, 2004 and Sec. 139 of Finance Act, 2007 3% of X Total X+3% of X = Y According to the appellant, central excise duty payable on the DTA clearances is Y and on this no further education cess and S H cess under Section 93 of Finance Act, 2004 and Sec. 138 of Finance Act, 2007 is payable. However, according to the department, since aggregate of duties of customs including education cess and S H cess thereon is the measure of the excise duty payable on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excise on such goods under the Central Excise Act, 1944 or the rules, as the case may be. 94. Education Cess on imported goods. - (1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule" to the Customs Tariff Act, 1975 (51 of 1975), being goods imported into India, shall be a duty of customs (in this section referred to as the Education Cess on imported goods), at the rate of two per cent., calculated on the 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 (52 of 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) the safeguard duty referred to in sections 8B and 8C of the Customs Tariff Act, 1975 (51 of 1975); (b) the countervailing duty referred to in section 9 of the Customs Tariff Act, 1975 (51 of 1975); (c) the anti-dumping duty referred to in section 9A of the Customs Tariff Act, 1975 (51 of 1975); and (d) the Education Cess on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable on such goods under the Customs Act, 1962/Central Excise Act, 1944 or any other law for the time being in force. However, it is also clear that there is no intention to charge cess on cess as the aggregate of duties of excise or the duties of customs on which the cess on excisable goods or imported goods is to be charged, is not to include the cess on excisable goods and cess on imported goods respectively. There would be no cess on cess if the measures for the central excise duty and customs duty are independent and there is no overlapping. However, this does not happen in all the cases and on one such instance when this does not happen is the excise duty payable on the goods cleared by 100% EOU into DTA. In terms of proviso to Section 3(1) of Central Excise Act, 1944, the central excise duty chargeable on the DTA clearance of 100% EOU is an amount equal to the aggregate of duties of customs which would be leviable under the Customs Act, 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 at an adv. rate the value of such excisable goods shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under any other law for the time being in force would also include the education cess and S H Cess on imported goods levied as a duty of customs. According to the department, the proviso to Section 3(1) of the Central Excise Act, 1944 provides only the measure of the excise duty chargeable on the DTA clearance of a 100% EOU and this measure is the aggregate of the duties of customs chargeable on import of like goods into India under the provisions of Customs Act, 1962 or any other law for the time being in force and accordingly, the aggregate of duties of customs would also include the education cess levied as customs duty under Section 94 of the Finance Act, 2004 and S H Cess levied as customs duty under Section 139 of the Finance Act, 2007 and since this aggregate is the central excise duty payable on the DTA clearances, on this aggregate the education cess and S H cess on excisable goods would be chargeable once again under the provisions of Section 93 of the Finance Act, 2004 and Section 138 of the Finance Act, 2007. 7.2 The plea of the appellant on the other hand is that - (a) proviso to Section 3(1) is a legal fiction under which the goods manufactured by 100% EOU and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cesses, which are levied by different ministries and a number of them are collected by the Department of Revenue as duty of excise. Cenvat Credit Rules, 2004 also treats education cess and S H cess as levies distinct and different from the excise duties. Hon'ble Gauhati High Court in case of CCE, Shillong v. Dharampal Satyapal Ltd. reported in 2012 (275) E.L.T. 71 (Gauhati) has held that exemption Notification No. 32/99-C.E. does not cover education cess and levy of education cess is completely independent of the levy of excise duty. Therefore, we are of the view that just because the education cess and S H cess are levied as surcharge on the aggregate of excise duties or customs duties, levied and collected by the Ministry of Finance (Department of Revenue), this cannot be treated as mere addition to the excise duty or customs duty. In, our view, therefore, the education cess and S H cess have to be treated as different and distinct levies from the excise duties and customs duties on which the same are charged. 9. We also find it difficult to accept the other plea of the appellant that proviso to Section 3(1) is a legal fiction under which the goods manufactured by a 100% EOU an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing levies, the existing levies, obviously, would not include this cess. For this reason only, Sections 93 94 of Finance Act, 2004 and Sections 138 and 139 of Finance Act, 2007 while defining the measure of education cess and S H cess in respect of excisable goods and imported goods respectively, specifically provide that the aggregate of duties of excise or aggregate of duties of customs levied by the Central Government in the Ministry of Finance (Deptt. of Revenue), on which this cess is to be levied as surcharge, would not include the education cess and S H cess. Thus, the intention of the legislature was never to charge education cess on education cess. In fact this is not permissible from very mode of this levy as prescribed in Section 91 of the Finance Act, 2004 and Section 136 of the Finance Act, 2007, as when a new tax is introduced as surcharge on the existing levies, the base on which the new levy as surcharge is to be calculated will include only the existing levies, not the new levy. If the Revenue's stand is accepted, and on the sum of Basic customs duty and Addl. Customs duty, first "cess on imported goods" under Section 94 of Finance Act, 2004 and Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule : 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 refe ..... 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