2017 (8) TMI 264 - AT - Central Excise

Refund of Education Cess and Higher Education Cess - amount paid by mistake - rejection on the ground of time bar and unjust enrichment - Held that - similar issue decided in the case of M/s Orangajuli Tea Garden, M/s Nonai Para Garden Versus Commr. of Central Excise & S. Tax, Guwhati 2017 (5) TMI 455 - CESTAT KOLKATA , where following the decision of the Hon ble Gujarat High Court in the case of Joshi Technologies International v. Union of India 2016 (6) TMI 773 - GUJARAT HIGH COURT , it was held that Crude Oil Cess is not in the nature of excise duty and consequently, the Education Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claims of Education Cess and Higher Education Cess paid from April 2004 to March 2014 rejected on grounds of time bar and unjust enrichment.

Analysis:

Issue 1: Refund Claims Rejection
The appellants filed refund claims for Education Cess and Higher Education Cess paid over a ten-year period, which were rejected by the adjudicating authority citing time bar and unjust enrichment. The Commissioner(Appeals) upheld this decision. The main contention was that the Cess was paid by mistake, and the department collected it without legal authority, as per Circular No.978/2/2014-CX. The appellant relied on decisions of Karnataka High Court and Kerala High Court, while the Revenue referred to a Supreme Court decision. The Tribunal found that the issue was settled in a previous case where a refund was allowed on similar grounds, following the decision of the Gujarat High Court. The Tribunal emphasized that if there was no legal authority to collect the tax, the amount paid should be refunded, as per the law laid down by various High Courts. The Tribunal concluded that the refund claim was not time-barred and allowed the appeals, directing the Commissioner to return the deposited amount.

Issue 2: Precedents and Legal Interpretation
The Tribunal extensively discussed various case laws, including decisions of High Courts and the Supreme Court, to support its decision. It highlighted the importance of legal authority to collect tax and the consequences of collecting tax without such authority. The Tribunal cited precedents where refunds were allowed in similar situations, emphasizing that the limitation period did not apply when it was a case of returning a deposit rather than refunding tax. The Tribunal also referred to the supervisory powers of High Courts and the binding nature of their decisions on tribunals. It concluded that the decisions of High Courts in similar cases were binding and granted the appeals based on those precedents.

Conclusion:
The Tribunal allowed the appeals filed by the appellants, setting aside the impugned orders and directing the Commissioner to return the deposited amount, as per law. The decision was based on the lack of legal authority to collect the tax, the precedents set by High Courts, and the consequential nature of the orders issued by those courts. The Tribunal emphasized the importance of legal principles and the need to prevent the department from taking advantage of the ignorance of taxpayers.