M/S Barak Alloy vs. Union Of INDIA And 5 Ors.

Held

The Court held that in view of the consensus reached between the parties, and following the pronouncement of the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, the respondents are bound to refund the education cess and higher education cess paid by the petitioner. The Supreme Court's finding that education cess and higher education cess partake of the character of excise duty itself was accepted. The Court directed the respondents (Department of Excise/Goods and Services Tax of the Government of India, specifically respondents Nos. 4 to 6) to make an appropriate calculation and refund the education cess and higher education cess paid by the petitioner from July 2006 to March 2015. The refund process is to be completed within five months from the receipt of a certified copy of the order.

Facts

The petitioner, M/s Barak Alloy, an industrial unit in Assam, claimed benefits under the North East Industrial Policy of 1997, which provided for excise duty exemptions. The petitioner had paid excise duty, education cess, and higher education cess. While excise duty was refunded as per the policy, a dispute arose regarding the refundability of education cess and higher education cess. 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 and are thus refundable if excise duty is exempted. The petitioner, relying on this judgment and a similar order from the Meghalaya High Court, sought a refund of education cess and higher education cess paid from July 2006 to March 2015.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance Act of 2004 are part of the excise duty, and therefore refundable under the North East Industrial Policy of 1997, when excise duty itself is exempted? Petitioner's Argument: The petitioner argued 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 thus refundable when excise duty is exempted. They also referred to a Meghalaya High Court order in a similar case where a refund was directed. Revenue's Argument: The revenue, through the learned ASGI, submitted that following the Supreme Court's pronouncement in M/s SRD Nutrients Private Limited, the authorities are bound to refund the education cess and higher education cess paid by the petitioner for the period in question.