M/S Sureka Projects PVT. LTD. vs. Union Of INDIA And 5 Ors.

Held

The Court held that the education cess and higher education cess levied under the Finance Act, 2004, partake of the character of excise duty itself. Therefore, when excise duty is exempted under the North East Industrial and Investment Promotion Policy, 2007, the education cess and higher education cess paid along with it are also entitled to a refund. This finding is based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati. The Court noted the consensus between the parties, with the respondent agreeing to refund the cesses as per the Supreme Court's ruling. Accordingly, the Court directed the respondents to calculate and refund the education cess and higher education cess paid by the petitioner from 2004-2005 to 2014-2015 within five months of receiving a certified copy of the order. No issue was expressly left undecided.

Facts

The petitioner, M/s Sureka Projects Pvt. Ltd., an industrial unit in Assam, claimed benefits under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, which provided exemptions from excise duty for units commencing production after April 1, 2007, or undertaking substantial expansion. The petitioner paid excise duty, education cess, and higher education cess. While excise duty was refunded as per the policy, a question arose whether the education cess and higher education cess were also refundable. This issue was decided by the Supreme Court in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, which held that these cesses partake of the character of excise duty and are thus refundable when excise duty is exempted. The petitioner sought a refund of education cess and higher education cess for the period 2004-2005 to 2014-2015, relying on the Supreme Court's judgment.

Key Issues

1. Whether education cess and higher education cess are part of excise duty and thus refundable when excise duty itself is exempted under the North East Industrial and Investment Promotion Policy, 2007? The petitioner argued that following the Supreme Court's decision in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, they are entitled to a refund of the education cess and higher education cess paid from 2004-2005 to 2014-2015, as these cesses were levied along with excise duty and the Supreme Court held them to partake of the character of excise duty. The petitioner also referred to a Meghalaya High Court order where a similar refund was directed based on party agreement. The respondent (Union of India and its authorities) conceded that, in light of the Supreme Court's pronouncement in M/s SRD Nutrients Private Limited, they are bound to refund the education cess and higher education cess paid by the petitioner for the period in question.