2018 (10) TMI 831 - HC - Central Excise

Refund of education cess and the higher education cess - Interpretation of statute - area based exemption availed - excise duty became exempt - whether the education cess and higher education cess were a part of the excise duty? - Held that - The said issue was finally decided by the Hon ble Supreme Court in M/s SRD Nutrients Private Limited vs- Commissioner of Central Excise, Guwahati 2017 (11) TMI 655 - SUPREME COURT OF INDIA , where it was held that the appellants therein were entitled to a 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 January, 2008 to December, 2015 - Appeal allowed by way of remand.

Summary

Issues:
Claim for refund of education cess and higher education cess paid under the North East Industrial and Investment Promotion Policy, 2007.

Analysis:
The petitioner, an industrial unit in Assam, sought benefits under the North East Industrial and Investment Promotion Policy, 2007, claiming exemption from excise duty. The policy granted exemptions for units commencing production post 01.04.2007 or expanding capacity substantially after that date. The petitioner paid education cess and higher education cess along with excise duty as per the Finance Act of 2004. A question arose whether these cess amounts were refundable under the NEIIPP, 2007, akin to excise duty. The Supreme Court in Civil Appeal Nos.2781-2790 of 2010 held that education cess and higher education cess were to be treated as excise duty and thus refundable when excise duty was exempted.

The petitioner, relying on the Supreme Court judgment, filed a writ petition seeking refund of education cess and higher education cess paid from January 2008 to December 2015 under notification No.20/2007-CE. The ASGI for the Ministry of Finance and Commerce concurred with the Supreme Court's decision and agreed to refund the cess amounts. Reference was made to a Meghalaya High Court order directing a similar refund in a comparable case. Consequently, the High Court directed the Excise/GST 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 conclusion, the High Court disposed of the writ petition, instructing the authorities to refund the education cess and higher education cess in line with the Supreme Court's interpretation, ensuring compliance within the stipulated timeframe for the refund process.