Kamakhya Plastics PVT. LTD. vs. Union Of INDIA And 6 Ors.

Held

The Court held that the education cess and higher education cess are part of the excise duty, as per the Supreme Court's decision in M/s SRD Nutrients Private Limited. Consequently, the petitioner is entitled to a refund of the education cess and higher education cess paid from May 2008 to February 2015, as these were collected along with the excise duty which was exempted under the North East Industrial Policy. The Court noted a consensus between the parties on this issue. The respondents (authorities in the Department of Excise/Goods and Services Tax) were directed to make appropriate calculations and refund the said cesses to the petitioner within five months from the receipt of a certified copy of the order. No issues were expressly left undecided.

Facts

The petitioner, Kamakhya Plastics Pvt. Ltd., is an industrial unit in Assam claiming benefits under the North East Industrial Policy of 1997, which provided for excise duty exemptions. The petitioner paid excise duty, education cess, and higher education cess. While excise duty was refunded as per the policy, a dispute arose regarding the refundability of the education cess and higher education cess. 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 of the character of excise duty and are thus refundable if excise duty is exempted. The petitioner, relying on this judgment, sought a refund of education cess and higher education cess paid from May 2008 to February 2015.

Key Issues

1. Whether the education cess and higher education cess paid by the petitioner are refundable under the North East Industrial Policy of 1997, given that the Supreme Court in M/s SRD Nutrients Private Limited held these cesses to be part of excise duty. Petitioner's Argument: The petitioner argued that based on the Supreme Court's decision in M/s SRD Nutrients Private Limited, they are entitled to a refund of the education cess and higher education cess paid, as these are considered part of the excise duty which was exempted under the North East Industrial Policy. They also referred to a Meghalaya High Court order in a similar case where a refund was directed. Revenue's Argument: The learned ASGI, upon instruction, submitted that the authorities are bound to refund the education cess and higher education cess paid by the petitioner, following the pronouncement of the Supreme Court in M/s SRD Nutrients Private Limited.