Clearances by EOUs in DTA - Customs Cess is back, but what about Central Excise cess?
VIDE Notification No 16/2015 CE dated 01.03.2015, Notification No 23/2003 CE dated 31.03.2003 (effective rate of duty on goods cleared by EOUs in DTA) has been amended. The entries at Sl No 1A and 1B in the Table are omitted. These entries were inserted in the last year's budget to exempt customs education cesses (u/s 94 of the Finance Act, 2004) on clearances made in DTA. These entries read as under:
1A | Any chapter | All goods | Duty of excise leviable thereon as is equivalent to the education cess leviable on such goods under section 94 of the Finance (No.2) Act, 2004 (23 of 2004), read with the proviso to sub-section (1) of section (3) of the said Central Excise Act. | - |
1B | Any chapter | All goods | Duty of excise leviable thereon as is equivalent to the Secondary and Higher Education cess leviable on such goods under section 139 of the Finance Act, 2007 (22 of 2007) read with the proviso to sub-section (1) of section (3) of the said Central Excise Act | - |
So, with effect from 01.03.2015, clearances by EOUs in DTA will attract customs education cesses.
But, what about education cess leviable on excise duty payable? Maybe the Government would have thought these cesses are exempted under Notification Nos 14 and 15 CE dated 01.03.2015 and they should restore the customs cesses.
But, as per Section 5A of the Central Excise Act, unless specifically provided for in the notification, exemptions under Sec 5A are not applicable to EOUs.
Are the EOUs required to pay education cess on gross amount of excise duty payable? Are they eligible for exemption of education cesses? Will the auditors allow the benefit of exemption to them under Notification Nos 14 CE and 15 CE of 2015?
Why can't the Board explain the above amendments with illustrations explaining the effect of amendments made to Notification No 23/2003 CE in the Budget and the duty payable by EOUs ?