KAMAKHYA PLASTICS PVT. LTD. VERSUS UNION OF INDIA AND 6 ORS.

Refund of Education Cess and Higher Education Cess – North East Industrial Policy of 1997 – whether the education cess and the higher education cess paid on all excisable goods were also subjected to a refund under the North East Industrial Policy of 1997?

HELD THAT:- The Hon’ble Supreme Court in M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 – SUPREME COURT] arrived at a conclusion that the education cess and the higher education cess levied @ 2% of the excise duty would partake the character of excise duty itself. Accordingly, it was held that the appellants therein were entitled to refund of the education cess and the higher education cess, which was paid along with the excise duty once the excise duty itself was exempted from levy.

This Court directs the respondents in the Department of Excise/Goods and Services Tax of the Government of India, more particularly the respondent Nos. 4 to 6 to make an appropriate calculation and thereupon refund the education cess and the higher education cess paid by the petitioner from May, 2008 to February, 2015 – Petition disposed off.

No.- WP(C) 5760/2018

Dated.- August 27, 2018

Citations:

  1. M/s. SRD Nutrients Private Limited Versus Commissioner of Central Excise Guwahati – 2017 (11) TMI 655 – Supreme Court

HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA

For the Petitioner : DR. ASHOK SARAF

For the Respondent : ASSTT.S.G.I.

JUDGMENT

Heard Dr. A. Saraf, learned senior counsel for the petitioner and Mr. S.C Keyal, learned ASGI for the respondents in the Ministry of Finance and Ministry of Commerce and Industries of the Government of India, as well as the authorities in the office of the Commissioner of Central Excise and Goods and Services Tax at Guwahati.

2. The petitioner is an industrial unit located within the State of Assam and claims to be entitled to certain benefits as regards exemption from excise duty as per the North East Industrial Policy, as contained in the Office Memorandum dated 24.12.1997 and the subsequent notifications of the Central Government for the purpose. As per the North East Industrial Policy of 1997, exemptions as regards excise duty were applicable to such industrial units, which had commenced their commercial production on or after 24.12.1997 and also in respect of such industrial unit, which have been in existence prior to 24.12.1997, but had undertaken substantial expansion by way of increase in the installed capacity after the said date.

3. As per the Finance Act of 2004, an education cess and a higher education cess was levied on all excisable goods in addition to any other duties of excise chargeable on such goods under the Central Excise Act of 1944. Accordingly the petitioner, apart from the excise duty, had also paid the education cess and the higher education cess as introduced by the Finance Act of 2004.

4. Under the industrial policy of 1997, the petitioner accordingly claimed a refund of the excise duty paid as admissible under the policy and upon being subjected to the necessary process, the required amount of excise duties paid were refunded.

5. As the refund of excise duty was a specific provision in the North East Industrial Policy of 1997, a question had arisen as to whether the education cess and the higher education  cess paid on all excisable goods were also subjected to a refund under the North East Industrial Policy of 1997, or in other words, whether the education cess and higher education cess were a part of the excise duty.

6. The said issue was finally decided by the Hon’ble Supreme Court in Civil Appeal Nos.2781-2790 of 2010 (M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati) and other similar civil appeals by its judgment and order dated 10.11.2017.

7. In its judgment and order, the Hon’ble Supreme Court arrived at a conclusion that the education cess and the higher education cess levied @ 2% of the excise duty would partake the character of excise duty itself. Accordingly, it was held that the appellants therein were entitled to refund of the education cess and the higher education cess, which was paid along with the excise duty once the excise duty itself was exempted from levy.

8. In this writ petition, by relying upon the aforesaid judgment of the Hon’ble Supreme Court, the petitioner claims for a direction for refunding the education cess and the higher education cess as stood exempted in terms of Notification No.20/2007-CE dated 25.04.2007 for the period May, 2008 to February, 2015.

9. Mr. S.C Keyal, learned ASGI appearing for the Ministry of Finance, Government of India, Ministry of Commerce, Government of India as well as the authorities in the Excise and Goods and Service Tax Department, upon instruction, submits that in the instant case also by following the pronouncement of the Hon’ble Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, the authorities are bound to refund the education cess and the higher education cess paid by the petitioner from May, 2008 to February, 2015.

10. In this respect, Dr. A. Saraf, learned senior counsel for the petitioner also refers to an order dated 02.08.2018 of the Division Bench of the High Court of Meghalaya, wherein also in a similar circumstance and upon an agreement being reached between the parties, a direction was issued to the respondents therein to refund the education cess and the higher education cess, which was collected by the respondent authorities from the appellant therein along with the excise duty for the given period.

11. Accordingly, in view of the consensus reached between the parties, this Court directs the respondents in the Department of Excise/Goods and Services Tax of the Government of India, more particularly the respondent Nos. 4 to 6 to make an appropriate calculation and thereupon refund the education cess and the higher education cess paid by the petitioner from May, 2008 to February, 2015.

12. As agreed by Mr. SC Keyal, learned ASGI, the aforesaid process of refund be undertaken and completed, leading to refund of the education and higher education cess, within a period of 05(five) months from the date of receipt of a certified copy of this order.

In terms of the above, the writ petition stands disposed of.

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