The Single Member Bench of Kolkata Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that cess on paper is not a duty of excise and refund rejected on limitation under section 11B of the Central Excise Act, 1944 will not sustain.
The Appellant, M/s. Uniglobal Paper Private Limited was issued Show Cause Notices for payment of Education Cess and Secondary & Higher Education Cess on Paper Cess which was paid on 28.08.2013 by the adjudication order.
The Appellant continued to pay Education Cess on Paper Cess up to 06.01.2014. Based on the Central Board of Excise & Customs (CBEC) Circular which states that Education Cess and Secondary and Higher Education Cess is not to be calculated on other Cesses, Appellant claimed refund.
The department rejected the refund claim on the ground that the Appellant did not file any Appeal against the Adjudication orders.
It was contended by the Appellant that the amounts have been collected by the Department wrongfully and the Department cannot retain the same. On Appeal, the Commissioner(Appeals) bifurcated the refund claim and upheld the rejection of Rs.19,582/- as correct and for the balance claim of Rs.14,986/- set aside the rejection and remanded the matter to the lower authority.
In terms of the Board’s Circular it was very clear that a Cess levied under an Act which is not administered by the Ministry of Finance (Department of Revenue), but only collected by the Department of Revenue under the provisions of that Act cannot be treated as a duty which was both levied and collected by the Department of Revenue.
Even though the Cess on Paper is a duty of excise, it was not levied by the Department of Revenue, Ministry of Finance, but was levied under the Industries (Development & Regulation) Act, 1951.
In light of the case of Joshi Technologies International v. Union of India,Shri P K Choudhary, Member (Judicial) has held that“since Cess on Paper is not a duty of excise, the provisions of Section 11B of the Central Excise Act would not apply.” The Tribunal allowed the Appeal filed by the Appellant with consequential relief.
Shri N.K. Chowdhury, Advocate appeared for the Appellant and Shri K. Chowdhury appeared for the Respondent.
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