M/S Keshari Industries vs. Union Of INDIA And 5 Ors.

Held

The Court held that education cess and higher education cess, levied at 2% of the excise duty, partake of the character of excise duty itself. This finding is based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid, as these were collected along with the excise duty, which was exempted under the NEIIPP, 2007. The Court noted the consensus between the parties on this issue. The respondents, specifically authorities Nos. 4 to 6, were directed to calculate and refund the education cess and higher education cess paid by the petitioner for the period from 2010-2011 to 2016-2017 within five months of receiving a certified copy of the order. No issue was expressly left undecided.

Facts

The petitioner, M/s Keshari Industries, an industrial unit in Assam, sought a refund of education cess and higher education cess paid on excisable goods. These cesses were levied under the Finance Act of 2004, in addition to excise duty. The petitioner had previously received a refund of excise duty under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, which provided exemptions for industrial units commencing production after April 1, 2007, or those undertaking substantial expansion. The core issue was whether the education cess and higher education cess were part of the excise duty and thus also eligible for refund under the NEIIPP, 2007.

Key Issues

1. Whether education cess and higher education cess levied under the Finance Act, 2004, are part of excise duty and therefore eligible for refund under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, when excise duty itself is exempted. This issue turns on the interpretation of the nature of education cess and higher education cess in relation to excise duty. Petitioner's contention: The petitioner argued that following the Supreme Court's decision in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, education cess and higher education cess are part of excise duty and should be refunded. They sought a direction for refund for the period 2010-2011 to 2016-2017. Revenue's contention: The respondent, Union of India and its authorities, through the learned ASGI, submitted that they are bound to refund the education cess and higher education cess paid by the petitioner, following the pronouncement of the Hon'ble Supreme Court in the SRD Nutrients case.