M/S. Topcem INDIA vs. Union Of INDIA And 5 Ors.

Held

The Court held that the education cess and higher education cess levied under the Finance Act, 2004, 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, which concluded that these cesses are an integral part of the excise duty. Consequently, when excise duty is exempted under policies like the NEIIPP, 2007, the education cess and higher education cess paid on such goods are also entitled to be refunded. The Court noted the consensus between the parties on this issue, with the revenue agreeing to refund the cesses. The operative direction issued was for the respondents (authorities in the Department of Excise/Goods and Services Tax) to calculate and refund the education cess and higher education cess paid by the petitioner for the period from March 2012 to February 2015 within five months of receiving a certified copy of the order. No issue was expressly left undecided.

Facts

The petitioner, M/s. Topcem India, 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 claimed and received refunds for excise duty paid, based on the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, which exempted industrial units commencing production after April 1, 2007, or those undertaking substantial expansion. A question arose whether these cesses were also refundable as part of the excise duty exemption. This issue was decided by the Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, which held that education cess and higher education cess partake of the character of excise duty itself and are thus refundable when excise duty is exempted. The petitioner, relying on this judgment, sought a refund for the period March 2012 to February 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 thus refundable when excise duty is exempted under the North East Industrial and Investment Promotion Policy, 2007? Petitioner's argument: The petitioner contended that the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, has definitively held that education cess and higher education cess are part of excise duty and are therefore refundable when excise duty is exempted. They relied on this precedent and an order of the Meghalaya High Court in a similar case. Revenue's argument: The respondents, 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 M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati.