Imported Coal Does Not Attract Customs Education Cess And Higher Education Cess: CESTAT

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that imported coal would not attract the Customs Education Cess and the Higher Education Cess.

The two-member bench of Sulekha Beevi C.S. (Judicial Member) and Vasa Sheshagiri Rao (Technical Member) has observed that the adjudicating court erred by including the clean energy cess component with basic customs duty for the purpose of calculating customs educational cess and higher education cess.

The appellant/assessee filed two Bills of Entry, both dated July 27, 2011, for the clearance of 51700 MT and 33000 MT of steaming (non-coking) coal in bulk, respectively. The bills of lading were provisionally assessed, and the cargo was cleared. At the time of finalization of the assessment, the adjudicating authority included the clean energy cess, i.e., Rs. 50 per MT, with the basic customs duty for the calculation of the customs education cess and higher education cess and demanded differential duty with interest.

The appellants filed an appeal before the Commissioner (Appeals), who dismissed the appeal.

The appellant contended that as per Section 83 (3) of Chapter VII and Section 83 (5) of Chapter VII of the Finance Act, 2010, Section 94 of the Finance Act, 2004, and Sections 138 and 139 of the Finance Act, 2007, read with Notification Nos. 28/2010-CE and No. 29/2011-CE, both dated June 22, 2010, imported coal would not attract Customs Education Cess and Higher Education Cess.

The tribunal held that the education cess levied under Section 81(1) of the Finance Act, 2004 on imported goods specified in the First Schedule to the Customs Tariff Act, 1975, into India at the rate of 2% on the aggregate duty of customs levied under Section 12 of the Customs Act, 1962, as per Section 84 (1) read with Section 84 (2) of the Finance Act, 2004, will also be levied on the Clean Energy Cess as being part of the aggregate of customs.

Case Title: M/s. Chemplast Sanmar Ltd. Versus The Commissioner of Customs

Citation: Customs No.40031 of 2013

Date: 07.03.2023

Counsel For Appellant: Varshitha

Counsel For Respondent: S. Balakumar

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