M/S. Sun Shine Fibre Industry 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 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. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid from June 2011 to March 2015, as these were paid along with the excise duty which was exempted under the NEIIPP, 2007. The Court directed the respondents (Nos. 5 to 7) to calculate and refund the education cess and higher education cess within five months of receiving a certified copy of the order. No issues were expressly left undecided.

Facts

The petitioner, M/s. Sun Shine Fibre Industry, an industrial unit in Assam, claimed excise duty exemptions under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. The policy allowed exemptions for units commencing production after April 1, 2007, or those existing prior to that date but undertaking substantial expansion. The petitioner paid excise duty, education cess, and higher education cess. While excise duty refunds were processed under the policy, a dispute arose regarding the refundability of the education cess and higher education cess. The petitioner sought a direction for refund of these cesses for the period June 2011 to March 2015, relying on a Supreme Court judgment.

Key Issues

1. Whether education cess and higher education cess are part of excise duty and thus refundable under the North East Industrial and Investment Promotion Policy, 2007, when excise duty itself is exempted? (Question of law). The petitioner argued that the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, held that education cess and higher education cess partake the character of excise duty itself and are therefore refundable when excise duty is exempted. The petitioner also referred to a Meghalaya High Court order granting similar relief. The respondents, through the learned ASGI, submitted that they are bound by the Supreme Court's pronouncement and would refund the education cess and higher education cess paid by the petitioner.