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 are part of excise duty and are therefore refundable under the North East Industrial Policy of 2007, following the Supreme Court's decision in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. The reasoning was that the Supreme Court had already established the character of these cesses as being intrinsically linked to excise duty. Consequently, the Court directed the respondents, specifically respondents Nos. 4 to 6 (Commissioner of Central GST, Assistant Commissioner GST, and Superintendent GST), to calculate and refund the education cess and higher education cess paid by the petitioner for the period December 2008 to August 2013. The refund process was to be completed within five months of receiving a certified copy of the order. No issues were expressly left undecided.

Facts

The petitioner, M/s. Godrej Consumer Products Ltd., located in Assam, sought benefits under the North East Industrial Policy, which provided exemptions from excise duty. The policy applied to units commencing production after December 24, 1997, or those existing prior to that date but 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 addressed 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. The petitioner, relying on this judgment, sought a refund of education cess and higher education cess paid between December 2008 and August 2013.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance (No.2) Act of 2004 are refundable under the North East Industrial Policy of 2007, as per the ratio laid down by the Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. The petitioner argued that the Supreme Court had definitively held that these cesses are part of excise duty and thus refundable when excise duty itself is exempted under the policy. The respondents, representing the Union of India and GST authorities, submitted that they are bound by the Supreme Court's pronouncement and would refund the amounts paid by the petitioner. The respondents did not present any opposing arguments.