M/S. K.D.Cements vs. Union Of INDIA And 4 Ors.

Held

The Court held that the education cess and higher education cess levied at 2% of the excise duty 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. 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 the excise duty which was exempted under the NEIIPP, 2007. The Court noted a consensus between the parties on this issue. The operative direction is for the respondents (GST/Excise authorities) to calculate and refund the education cess and higher education cess paid by the petitioner within five months from the receipt of a certified copy of the order. No issue was expressly left undecided.

Facts

The petitioner, M/s. K.D. Cements, an industrial unit in Assam, claimed benefits under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, which provided for excise duty exemptions for units commencing production after April 1, 2007, or undertaking substantial expansion. The petitioner had paid excise duty, education cess, and higher education cess. While excise duty 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 education cess and higher education cess partake of the character of excise duty and are thus refundable when excise duty is exempted. The petitioner sought a refund of these cesses for the period April 2011 to February 2015.

Key Issues

1. Whether education cess and higher education cess are part of excise duty, and therefore refundable under the North East Industrial and Investment Promotion Policy, 2007, when excise duty itself is exempted? (Question of law) Petitioner's contention: The petitioner argued that based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited, they are entitled to a refund of education cess and higher education cess paid from April 2011 to February 2015, as these cesses are considered part of excise duty. They also referred to a Meghalaya High Court order in a similar case where a refund was directed. Revenue's contention: The respondents, including the Ministry of Finance and GST authorities, submitted that following the Supreme Court's pronouncement in M/s SRD Nutrients Private Limited, they are bound to refund the education cess and higher education cess paid by the petitioner for the specified period.