Whether the oil cess to be included in the excise duty for the purpose of education cess? the penalty under section 80 be waived if the bona-fide belief of assessee is proved?

PJ/CASE LAW/2015-16/2675

Case-CAIRN INDIA LTD. VersusCOMMISSIONER OF CENTRAL EXCISE, JAIPUR-II

Citation-2015 (315) E.L.T. 612 (Tri. - Del.)

Brief Facts-The issue involved in the present case is as to whether education cess and secondary and higher education cess is leviable on the oil cess being collected from the appellant in terms of the provisions of Section 15 of the Oil Industries Development Act, 1974. The department being of the view that education cess and secondary and higher education cess is leviable on the oil cess has confirmed the demand of Rs. 21,80,957/- along with interest vide order dated 3-6-2011 passed by the Addl. Commissioner. This order of the Addl. Commissioner was confirmed by the Commissioner (Appeals) vide Order-in-Appeal dated 8-5-2013 against which this appeal has been filed.

Appelants Contention-Shri Monish Panda, Advocate, ld. Counsel for the appellant pleaded that in terms of the provisions of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with section 138 of the Finance Act, 2007, the education cess and secondary and higher education cess is leviable on the aggregate of all duties of excise, including special duty of excise or any other duty of excise but excluding education cess and S & H cess, which are levied by the Ministry of Finance, Department of Revenue under the provisions of Central Excise Act, 1944 or under any other law for the time being is forcing and that the oil cess being levied under Section 15 of the Oil Industries Development Act is levied by the Ministry of Petroleum & Natural Gas and hence, on this cess, education cess and secondary and higher education cess cannot be charged. He also cited the judgement of the Tribunal in the case of Sahakari Khand Udyog Mandli Ltd. v. CCE, Daman- 2008 (232)E.L.T.61 (Tribunal-Ahmd.), wherein it was held that sugar cess being levied by Ministry of Consumer Affairs cannot be included in the aggregate of the duties of excise for the purpose of levy of education cess. This decision of the Tribunal has been upheld by Hon’ble Gujarat High Court vide judgment reported in 2011 (263)E.L.T.34 (Gujarat). He, therefore, pleaded that the impugned order is not sustainable.

Respondents Contention-Shri Yashpal Sharma, Ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals).

Reasoning Of Judgement-The tribunal have considered the submissions from both the sides and perused the records. In terms of the provisions of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007, for the purpose of charging education cess and secondary and higher education cess, the excise duty would include only those cess levied as duty of excise, which are levied by the Ministry of Finance, Department of Revenue. Since the oil cess is levied by the Ministry of Petroleum, even though it is collected by the Ministry of Finance as excise duty, the same cannot be included in the duty of excise for the purpose of education cess. Same view has been taken by the Gujarat High Court in the case of Sahakari Khand Udyog Mandli Ltd. (supra). In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed.

Decision-Appeal party allowed

Comment-The crux of the case is that excise duty include only those cess which is levied as duty of excise by the Ministry of Finance . And since the oil cess is levied by the Ministry of Petroleum even though collected by the Ministry of Finance the same cannot be included in the excise duty for the purpose of education cess.

Prepared By-Neelam Jain

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PJ/CASE LAW/2015-16/2675

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