M/S. Greenply Industries LTD. vs. Union Of INDIA And 6 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. This finding is based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid from May 2005 to May 2015, as these were paid along with the excise duty, which was exempted under the NEIIPP, 2007. The Court directed the respondents to calculate the refund amount and process it within five months of receiving a certified copy of the order. The issue of whether these cesses were refundable was decided in favor of the petitioner, based on the Supreme Court's precedent.

Facts

M/s. Greenply Industries Ltd., an industrial unit in Assam, claimed exemption benefits under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. The policy allowed exemptions for excise duty for units commencing production after April 1, 2007, or those undertaking substantial expansion. The petitioner had 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 the character of excise duty and are thus refundable when excise duty is exempted. The petitioner, relying on this judgment, sought a refund of education cess and higher education cess paid from May 2005 to May 2015.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance Act, 2004, are part of the excise duty and therefore refundable when excise duty itself is exempted under the North East Industrial and Investment Promotion Policy, 2007? Petitioner's contention: The petitioner argued that following the Supreme Court's decision in M/s SRD Nutrients Private Limited, the education cess and higher education cess are an integral part of excise duty and should be refunded. They relied on this precedent and a similar order from the Meghalaya High Court. Revenue's contention: The respondents, including the Ministry of Finance and GST authorities, submitted that they are bound by the Supreme Court's pronouncement in M/s SRD Nutrients Private Limited and would refund the education cess and higher education cess paid by the petitioner.