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 the excise duty and are therefore refundable when excise duty is exempted under the North East Industrial Policy. This finding was based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, which established that these cesses partake the character of excise duty. The Court noted the consensus reached between the parties and the submission by the revenue that they are bound by the Supreme Court's decision. Accordingly, the Court directed 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 July 2004 to August 2010. 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., sought a refund of education cess and higher education cess paid on excisable goods. These cesses were levied in addition to excise duty by the Finance (No.2) Act of 2004. The petitioner, an industrial unit in Assam, was entitled to exemptions under the North East Industrial Policy. While excise duty paid 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 the character of excise duty and are thus refundable when excise duty itself is exempted. The petitioner sought a direction for refund for the period July 2004 to August 2010, relying on the Supreme Court's judgment.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance (No.2) Act of 2004 are part of the excise duty, and consequently, refundable when excise duty is exempted under the North East Industrial Policy? (Question of law) Petitioner's contention: The petitioner argued that the education cess and higher education cess are intrinsically linked to excise duty and should be refunded, citing the Supreme Court's decision in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati. They also referred to a similar order by the Meghalaya High Court. The petitioner sought a direction for refund of these cesses for the period July 2004 to August 2010. Revenue's contention: The learned ASGI, appearing for the respondents, submitted that following the pronouncement of the Hon'ble Supreme Court 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 specified period. The respondents agreed to the refund process.