2023 (3) TMI 888 - HC - Central Excise

Refund of CENVAT duty paid - Section 114 read with Order XLVII Rule 1 of the CPC - collecting education cess and higher education cess on such goods which were exempt from payment of excise duty - HELD THAT - The taxpayer having set up a manufacturing unit in the State of Tripura availed the benefit of duty exemption on the goods cleared from such manufacturing and pursuant to the Government of India policy to encourage industrial investment and growth in North Eastern region. The taxpayer contended that since the basic duty of excise was not payable, the additional charge of education cess and higher education cess also cannot be collected. Based on the decision of the Supreme Court in case of SRD Nutrients 2017 (11) TMI 655 - SUPREME COURT , the petitioners made refund claims for refund of education and higher education cess. Such refund application was allowed by the Assistant Commissioner. However, soon thereafter, in the decision in case of Unicorn Industries 2019 (12) TMI 286 - SUPREME COURT the Supreme Court held and observed that the decision in case of SRD Nutrients was per incuriam. The review petitioners has submitted that department has already moved an application for modification of the judgment rendered in the case of SRD Nutrients Pvt. Ltd. According to him, the Hon ble Apex Court has issued notice and the Assessee has filed its counter. Bajaj Auto has also moved an intervener application. It is the endeavour of the Union to bring SRD in line with Unicorn, which is a larger Bench judgment delivered subsequently and holding both SRD Nutrients and Bajaj Auto to be Per Incuriam. Let the Hon ble Supreme Court allow the modification application, then the ration in SRD would also get modified. The matter shall be argued before Hon ble bench shortly. Hence, the present review petition have been filed against the judgment dated 12.01.2021 with a specific prayer that the matter may be adjourned sine dine till the modification application is decided by the Hon ble Apex Court. The ground as raised by the review petitioner is not satisfactory and hence, the prayer made in this review petition stands rejected - the present review petition stands dismissed.

Summary

Issues involved:
The judgment involves the review petition filed under Section 114 read with Order XLVII Rule 1 of the CPC seeking review of the judgment and order dated 12.01.2021 passed by the Tripura High Court in WP(C)No.465 of 2020.

Industrial Policy and Tax Exemptions:
The case revolves around the industrial policy formulated by the Government of India to encourage industrial growth in the North Eastern region, making certain areas tax-free zones for ten years. The taxpayer established a plant in Tripura to manufacture excisable goods, claiming exemption under relevant notifications and seeking refunds of CENVAT duty and education cess paid.

Refund of Education Cess:
The issue of collecting education cess and higher education cess on goods exempt from excise duty was considered in light of a Supreme Court decision. The taxpayer filed refund applications based on the court's ruling, leading to the Assistant Commissioner sanctioning the refund. However, a subsequent Supreme Court decision questioned the earlier ruling, prompting a show cause notice for recovery of the refunded amount.

Legal Dispute and Review Petition:
The core legal dispute centered on the conflicting Supreme Court decisions regarding the collection of education cess on excisable goods. The taxpayer argued that the original refund order was valid as per the law prevailing at that time, while the department contended that the subsequent decision justified the recovery of the refunded amount. The High Court ultimately set aside the show cause notice issued by the Assistant Commissioner.

Review Petition Dismissal:
The review petition was filed challenging the judgment dated 12.01.2021, seeking an adjournment until a modification application related to a previous Supreme Court decision was decided. However, the High Court rejected the grounds raised in the review petition, leading to the dismissal of the petition. The court emphasized the importance of judicial principles and equity in such matters.

Conclusion:
The Tripura High Court, after hearing both sides and examining the records, concluded that the grounds raised in the review petition were not satisfactory. Therefore, the court rejected the prayer made in the review petition, resulting in the dismissal of the petition.