M/S. Godrej Consumer Products 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 of the character of excise duty itself. Consequently, the petitioner is entitled to a refund of these cesses paid along with the excise duty, as the excise duty was exempted under the NEIIPP, 2007. This decision is based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited. The Court directed the respondents to calculate and refund the education cess and higher education cess paid by the petitioner for the period from July 2004 to December 2015. The refund process is to be completed within five months from the receipt of a certified copy of the order. The specific period for the petitioner in this writ petition was from July 2004 to August 2013.

Facts

The petitioner, M/s. Godrej Consumer Products Ltd., sought a refund of education cess and secondary and higher education cess paid on excise duty. The petitioner is an industrial unit in Assam that was eligible for excise duty exemptions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. The petitioner had paid excise duty along with education cess and higher education cess. Following the Supreme Court's decision in M/s SRD Nutrients Private Limited, which held that education cess and higher education cess partake of the character of excise duty, the petitioner claimed a refund of these cesses for the period from July 2004 to December 2015. The respondents, including the Union of India and GST authorities, agreed to the refund.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance Act, 2004, are part of the excise duty and thus eligible for refund when the excise duty itself is exempted under the NEIIPP, 2007? (Question of law, turning on the interpretation of the Finance Act, 2004, and the NEIIPP, 2007). Petitioner's contention: The petitioner argued that the education cess and higher education cess are intrinsically linked to excise duty and should be refunded when excise duty is exempted, relying on the Supreme Court's judgment in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, and a Meghalaya High Court order. Revenue's contention: The learned Assistant Solicitor General, on instruction, submitted that the authorities 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 M/s SRD Nutrients Private Limited.