Ganesh Metcoke Industries vs. Union Of INDIA And 5 Ors.

Held

The Court held that the petitioner was entitled to a refund of the education cess and secondary and higher education cess collected during the specified period. The reasoning was based on the petitioner's entitlement to exemption from central excise duty under the North-East Industrial Policy, 2007, and notification No. 20/2017. Since education cess is an impost on excise duty, it logically follows that if the underlying duty is exempted, the cess levied thereon should also be refunded. The Court was further influenced by its own prior decision in an identical case, WP(C) No. 5760 of 2018 (Kamakhya Plastics Pvt. Ltd –Vs- Union of India), which had directed the refund of similar cesses. The revenue's submission that a policy decision had been taken to refund such cess further supported the petitioner's claim. The Court directed respondents, particularly respondent Nos. 4, 5, and 6, to refund the collected cess to the petitioner within three months of receiving a certified copy of the order.

Facts

The petitioner, Ganesh Metcoke Industries, an industrial unit in Assam, sought a direction from the Gauhati High Court to refund education cess and secondary and higher education cess collected from July 2004 to January 2015. The petitioner argued that under the North-East Industrial Policy, 2007, and notification No. 20/2017, it was entitled to a 100% refund of central excise duty paid. Since education cess is levied on excise duty, the petitioner contended it should not be leviable when excise duty itself was exempted. The petitioner cited an identical case, WP(C) No. 5760 of 2018 (Kamakhya Plastics Pvt. Ltd –Vs- Union of India), where the court directed a refund. The revenue acknowledged a decision by the Ministry of Finance to refund such cess.

Key Issues

1. Whether the petitioner is entitled to a refund of education cess and secondary and higher education cess collected for the period July 2004 to January 2015, in light of notification No. 20/2017 and the North-East Industrial Policy, 2007, which exempted central excise duty. Petitioner's arguments: The petitioner contended that as education cess is levied on excise duty, and excise duty was exempted under the industrial policy, the education cess should also not have been leviable. They relied on the principle that a cess on an exempted duty should itself be exempted. The petitioner also referred to a previous identical order by the same court in WP(C) No. 5760 of 2018 (Kamakhya Plastics Pvt. Ltd –Vs- Union of India) dated 27.08.2018, seeking similar relief. Revenue's arguments: The learned Assistant Solicitor General of India submitted that a decision had been taken by the competent authority in the Ministry of Finance, Government of India, to refund such cess irrespective of whether the assessee had approached the High Court.