Clean Energy Cess – Whether Education Cess is payable on imported Coal?
VIDE Chapter VII of the Finance Act, 2010, Clean Energy Cess has been imposed on certain specified varieties of coal. This Cess is collected as excise duty and different set of rules have also been notified for this purpose. The rate of duty as per the 10 th Schedule to the Finance Act is Rs 100/- per MT and the effective rate is Rs 50/ per MT in terms of Notification No. 03 /2010-Clean Energy Cess dated 22.6.2010.
Though the clean energy cess is levied on the goods produced in India, by virtue of the provisions of Section 3 of the Customs Tariff Act, 1975, the same is collected as additional duty of customs on the imported varieties of Coal.
It appears that in many customs houses, the field formations are taking a view that education cess and secondary education cess are also applicable on the clean energy cess and are collecting the same from the importers.
Vide Notifications 28/2010 CE and 29/2010 CE both dated 22.6.2010 provide exemption from payment of Primary and Secondary Education Cess for the goods specified under the 10 th Schedule to the Finance Act, 2010.
Though some importers have brought these notifications to the notice of the Customs authorities, the benefit of exemption under these notifications for the imported coal is denied on the ground that the same are not applicable for the imported coal.
The effective rate of Rs 50/- Per MT was notified under Section 5A of the Central Excise Act, 1944 and so also the exemption notifications for the educations cesses ( 28/2010 CE and 29/2010 CE)
Thus, if the benefit of exemption is extended under Notification 3/2010, there is no reason why the same should be denied for the exemption under Notifications 28 and 29/2010 CE.
The Board should issue a clarification on this immediately.