Assam Roofing 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. 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 Court found that the petitioner was entitled to a refund of the education cess and higher education cess paid for the period from March 1, 2011, to 2013-2014, as these were collected along with the excise duty, which was exempted under the North East Industrial Policy. The Court noted the consensus between the parties on this issue. The operative direction issued was for the respondents (authorities in the Department of Excise/Goods and Service Tax) to make an appropriate calculation and refund the education cess and higher education cess within five months of receiving a certified copy of the order.

Facts

The petitioner, Assam Roofing Ltd., an industrial unit in Assam, claimed exemption from excise duty under the North East Industrial Policy of 1997. This policy allowed for exemptions for units commencing production after December 24, 1997, or those undertaking substantial expansion. 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 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 from March 1, 2011, to 2013-2014, relying on the Supreme Court's judgment and a similar order from the Meghalaya High Court.

Key Issues

1. Whether the education cess and higher education cess levied under the Finance Act of 2004 are part of the excise duty and thus refundable under the North East Industrial Policy of 1997 when excise duty itself is exempted? 2. Whether the petitioner is entitled to a refund of education cess and higher education cess paid for the period from March 1, 2011, to 2013-2014, in light of the Supreme Court's decision in M/s SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati? Petitioner's arguments: The petitioner contended that the Supreme Court in M/s SRD Nutrients had definitively ruled that education cess and higher education cess are integral to excise duty and should be refunded when excise duty is exempted. They also cited a similar order from the Meghalaya High Court as precedent. Revenue's arguments: The Revenue, represented by the learned ASGI, submitted that following the pronouncement of the Hon'ble Supreme Court in M/s SRD Nutrients, the authorities are bound to refund the education cess and higher education cess paid by the petitioner for the specified period.