M/S. Barak Ispat PVT. LTD. vs. Union Of INDIA And 5 Ors.

Held

The Court held that the education cess and higher education cess levied at 2% of the excise duty partake in the character of excise duty itself. Consequently, industrial units entitled to a refund of excise duty under the NEIIPP, 2007, are also entitled to a refund of the education cess and higher education cess paid along with the excise duty. 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 on this issue. Accordingly, the respondents were directed to calculate and refund the education cess and higher education cess paid by the petitioner from September 2006 to March 2015 within five months of receiving a certified copy of the order. The writ petition was disposed of in terms of this direction.

Facts

The petitioner, M/s. Barak Ispat Pvt. Ltd., is an industrial unit in Assam that claimed excise duty exemptions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. The policy allowed exemptions for units commencing production after April 1, 2007, or those that underwent substantial expansion after that date. The petitioner had paid excise duty, education cess, and higher education cess. They received a refund of the excise duty paid. A question arose whether the education cess and higher education cess were also refundable as part of the excise duty exemption. This issue was addressed by the Supreme Court in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati.

Key Issues

1. Whether education cess and higher education cess are part of excise duty for the purpose of refund under the North East Industrial and Investment Promotion Policy, 2007, as interpreted by the Supreme Court in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati? Petitioner's contention: The petitioner argued that based on the Supreme Court's decision in M/s SRD Nutrients, the education cess and higher education cess should be refunded as they partake in the character of excise duty. They sought a direction for refund of these cesses paid from September 2006 to March 2015, relying on Notification No. 20/2007 dated April 25, 2007. Revenue's contention: The learned ASGI, upon instruction, submitted that the authorities are bound to refund the education cess and higher education cess paid by the petitioner from September 2006 to March 2015, following the pronouncement of the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited.