2018 (8) TMI 1955 - HC - GST

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.

Summary

Issues:
1. Entitlement to exemption from excise duty under the North East Industrial Policy.
2. Refund of education cess and higher education cess paid along with excise duty.
3. Interpretation of whether education cess and higher education cess are part of excise duty.

Analysis:
Issue 1: The petitioner, an industrial unit in Assam, claimed exemption from excise duty under the North East Industrial Policy of 1997, which provided exemptions for units commencing production after 24.12.1997 or undergoing substantial expansion post that date.

Issue 2: The petitioner paid education cess and higher education cess along with excise duty as per the Finance Act of 2004. The question arose whether these cess payments were eligible for refund under the North East Industrial Policy of 1997.

Issue 3: The Hon'ble Supreme Court, in a previous judgment, held that education cess and higher education cess, levied at 2% of excise duty, were to be considered part of excise duty itself. Therefore, the appellants were entitled to a refund of these cess payments once excise duty was exempted.

In this case, the High Court directed the authorities to refund the education cess and higher education cess paid by the petitioner from May 2008 to February 2015, following the Supreme Court's interpretation. The Ministry of Finance and Commerce, along with Excise and GST authorities, were instructed to calculate and process the refund within five months of the court order. The decision was based on the consensus reached between the parties and a similar precedent set by the High Court of Meghalaya in a related matter.