Purbanchal Enterprise PVT. LTD vs. Union Of INDIA And 5 Ors.

Held

The Court held that the respondents are bound to refund the education cess and higher education cess paid by the petitioner for the period 2008-2009 to 2012-2013. This decision was based on the consensus reached between the parties, acknowledging the Supreme Court's judgment in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, which established that education cess and higher education cess partake the character of excise duty. The Court directed the respondents (specifically Nos. 4 to 6) to make appropriate calculations and process the refund within five months of receiving a certified copy of the order. The ratio decidendi is that cesses levied as a percentage of excise duty are considered part of excise duty for refund purposes when the underlying excise duty is exempted.

Facts

The petitioner, Purbanchal Enterprise Pvt. Ltd., an industrial unit in Assam, sought a refund of education cess and higher education cess paid between 2008-2009 and 2012-2013. The petitioner was entitled to excise duty exemptions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. While excise duty was refunded, a question arose whether the education cess and higher education cess, levied under the Finance Act, 2004, were also refundable as part of the excise duty. The petitioner relied on a Supreme Court judgment in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, which held that these cesses partake the character of excise duty and are thus refundable when excise duty is exempted.

Key Issues

1. Whether education cess and higher education cess paid by the petitioner are refundable as part of excise duty exemption under the North East Industrial and Investment Promotion Policy, 2007, in light of the Supreme Court's decision in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati? The petitioner argued that the Supreme Court in M/s SRD Nutrients had definitively held that education cess and higher education cess are part of excise duty and therefore entitled to refund when excise duty itself is exempted. They sought a direction for refund for the period 2008-2009 to 2012-2013, citing Notification No. 32/99 and Notification No. 20/2007. The revenue (respondents) submitted, upon instruction, that they are bound by the Supreme Court's pronouncement in M/s SRD Nutrients and would refund the education cess and higher education cess paid by the petitioner for the specified period.