Kamlang Saw And Veneer Mills PVT. 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 are part of the excise duty itself. This conclusion was based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid from April 2011 to February 2015, as these were paid along with excise duty which was exempted under the NEIIPP, 2007. The Court directed the respondents (Nos. 5 to 7) to calculate and refund the said cesses within five months from the receipt of a certified copy of the order. The issue of whether these cesses were refundable was decided in favor of the petitioner.

Facts

The petitioner, Kamlang Saw and Veneer Mills Pvt. Ltd., located 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 under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, which provided exemptions for industrial units commencing production after April 1, 2007, or those undertaking substantial expansion. A question arose whether the education cess and higher education cess were also refundable as part of the excise duty exemption.

Key Issues

1. Whether education cess and higher education cess are part of excise duty, and thus refundable when excise duty itself is exempted under the North East Industrial and Investment Promotion Policy, 2007, specifically for the period April 2011 to February 2015, as per the Supreme Court's ruling in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. Petitioner's contention: The petitioner argued that based on the Supreme Court's judgment in M/s SRD Nutrients, they are entitled to a refund of education cess and higher education cess paid from April 2011 to February 2015, as these cesses partake the character of excise duty. They also referred to a Meghalaya High Court order granting similar relief. Revenue's contention: The ASGI, appearing for the respondents, submitted that in light of the Supreme Court's pronouncement in M/s SRD Nutrients, the authorities are bound to refund the education cess and higher education cess paid by the petitioner for the specified period.