2018 (12) TMI 375 - HC - Central Excise

Refund of education cess and the higher education cess paid - area based exemption availed - North East Industrial Policy of 1997 - Held that - 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 July, 2004 to February, 2015 - 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 - petition disposed off.

Summary

Issues:
Claim for refund of education cess and higher education cess paid in addition to excise duty under North East Industrial and Investment Promotion Policy, 2007.

Analysis:
The petitioner, an industrial unit in Assam, sought benefits under NEIIPP, 2007 for exemption from excise duty. The policy provided exemptions for units starting production after 01.04.2007 or expanding capacity substantially post that date. The petitioner paid excise duty, education cess, and higher education cess as per the Finance Act of 2004. The issue arose whether education cess and higher education cess were refundable under NEIIPP, 2007 along with excise duty.

The Supreme Court in Civil Appeal Nos.2781-2790 of 2010 held that education cess and higher education cess, levied at 2% of excise duty, were part of excise duty itself. The judgment entitled appellants to a refund of these cess amounts when excise duty was exempted. Relying on this judgment, the petitioner sought a refund of education cess and higher education cess paid from May 2005 to May 2015 under notifications No.32/99 and No.20/2007-CE.

The ASGI for the Ministry of Finance and Commerce, along with Excise and GST authorities, acknowledged the obligation to refund education cess and higher education cess based on the Supreme Court's decision. A similar direction for refund was also cited from a Meghalaya High Court order. Consequently, the High Court directed the concerned authorities to calculate and refund the education cess and higher education cess paid by the petitioner within five months from the date of the order.

In compliance with the court's directive and the agreement between the parties, the process of refunding education cess and higher education cess was to be completed within the stipulated five-month period. The writ petition was disposed of accordingly.