P.D.P. Steels 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 partake of the character of excise duty itself. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid from April 2004 to March 2014, as the underlying excise duty was exempted under the North East Industrial Policy. This decision is based on the Supreme Court's judgment in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati. The Court directed the respondents, specifically respondent Nos. 4 to 6, to calculate the refund amount and process the refund within five months of receiving a certified copy of the order. No issues were expressly left undecided.

Facts

The petitioner, P.D.P. Steels Ltd., an industrial unit in Assam, sought a refund of education cess and higher education cess paid between April 2004 and March 2014. These cesses were levied under the Finance Act, 2004, in addition to excise duty. The petitioner had previously received refunds for excise duty paid, based on the North East Industrial Policy of 1997. A question arose whether the education cess and higher education cess were also refundable as part of the excise duty exemption. The petitioner relied on a Supreme Court judgment 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.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance Act, 2004, are a part of excise duty and therefore refundable under the North East Industrial Policy, 1997, when excise duty itself is exempted? (Question of law) Petitioner's contention: The petitioner argued that the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited –vs- Commissioner of Central Excise, Guwahati, has conclusively held that education cess and higher education cess are part of excise duty. Therefore, they are entitled to a refund of these cesses for the period April 2004 to March 2014, as they had received exemptions for the underlying excise duty. Revenue's contention: The learned ASGI, upon instruction, submitted that in the instant case, the authorities are bound to refund the education cess and higher education cess paid by the petitioner, following the pronouncement of the Hon'ble Supreme Court in M/s SRD Nutrients Private Limited case.