2018 (4) TMI 1154 - AT - Central Excise

Refund claim - education/ higher education cess - N/N. 56/2002-CE dated 14.11.2002 - N/N. 19/2008-CE dated 27.03.2008 and 34/2008-CE dated 10.06.2008 - Held that - the notifications in question have been examined by the Hon ble J & K High Court in the case of Reckit Benckiser vs. UOI 2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT , wherein the Hon ble High Court quashed the notifications in question - Therefore, in terms of Notification No. 56/2002-CE dated 14.11.2002, the appellants are entitled to claim refund/ self-credit of duty paid through PLA. The refund/ self credit cannot be restricted in terms of N/N. 19/2008-CE dated 27.03.2008 and 34/2008-CE dated 10.06.2008 and the appellants are entitled to claim refund/self credit of duty paid through PLA, in terms of N/N. 56/2002-CE dated 14.11.2002. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim rejection under Notification No. 56/2002-CE
2. Entitlement to refund/self-credit of education cess/higher education cess
3. Restrictions on refund/self-credit under Notification Nos. 19/2008-CE and 34/2008-CE

Analysis:
1. The appellants contested the rejection of their refund claim under Notification No. 56/2002-CE. The issue revolved around their entitlement to self-credit/refund of education/higher education cess paid. The Tribunal referred to a precedent set by the Hon'ble Apex Court in a similar case, establishing that education cess/higher education cess is a continuation of duty paid by the assessee. Consequently, if the assessee can claim a refund of duty paid through PLA, they are also entitled to claim a refund/self-credit for education cess/higher education cess paid through the same means. Therefore, the Tribunal ruled in favor of the appellants, allowing them to claim the refund/self-credit for the cess paid through PLA.

2. Concerning the restrictions imposed by Notification Nos. 19/2008-CE and 34/2008-CE on refund/self-credit claims, the Tribunal examined a judgment by the Hon'ble J & K High Court in the case of Reckit Benckiser vs. UOI, where the High Court invalidated the notifications in question. Based on this precedent, the Tribunal concluded that the appellants are entitled to claim the refund/self-credit of duty paid through PLA under Notification No. 56/2002-CE dated 14.11.2002, without being restricted by the aforementioned notifications.

3. The Revenue raised objections citing a Division Bench decision of the Hon'ble High Court of Jammu & Kashmir, which allowed only 50% of the refund/self-credit under the notifications in question. However, the Tribunal dismissed this objection, emphasizing that the High Court's decision in the case of Reckit Benckiser had not been overruled by a higher forum, thus maintaining its validity. Additionally, the Tribunal noted that the vires of the notifications had been challenged in other cases, such as Unicorn Industries vs. JOI and VVF Limited vs. IJOI, where the respective High Courts also quashed the notifications. Consequently, the Tribunal held that the refund/self-credit cannot be restricted by Notification Nos. 19/2008-CE and 34/2008-CE, allowing the appellants to claim the refund/self-credit of duty paid through PLA under Notification No. 56/2002-CE dated 14.11.2002. As a result, all the appeals were allowed by the Tribunal.