Skj Coke Industries LTD. vs. Union Of INDIA And 5 Ors.

Held

The Court directed the respondents, specifically respondent Nos. 4, 5, and 6 (Commissioner of Central GST, Assistant Commissioner GST, and Superintendent GST), to refund the education cess and secondary and higher education cess collected from the petitioner for the period March 2011 to December 2015. This direction was based on the petitioner's submission that an identical case had been decided by the High Court, ordering a refund of such cess. The respondent's submission that a policy decision had been taken to refund such cess further supported this outcome. The Court ordered the refund to be processed within three months of receiving a certified copy of the order. The ratio decidendi is that cess levied on an exempted excise duty should also be refunded, especially when a policy decision or judicial precedent supports such a refund.

Facts

The petitioner, SKJ Coke Industries Ltd., an industrial unit in Assam, sought a direction from the Gauhati High Court to refund education cess and secondary and higher education cess collected for the period March 2011 to December 2015. The petitioner claimed entitlement to 100% refund of central excise duty under the North-East Industrial Policy, 2007, and Notification No. 20/2017. The petitioner argued that since excise duty itself was exempted, the cess levied on it should also not be leviable. The petitioner relied on an earlier identical case decided by the same High Court.

Key Issues

1. Whether education cess and secondary and higher education cess are leviable on excise duty when the excise duty itself is exempted under an industrial policy? The petitioner contended that as the primary excise duty was exempted under the North-East Industrial Policy, 2007, and Notification No. 20/2017, the cess levied on this exempted duty should also be refunded. The petitioner argued that the cess is an imposition on the excise duty, and thus, if the base duty is not leviable, the cess thereon should also not be. The petitioner cited a previous High Court decision in a similar case (WP(C) No. 5760 of 2018, Kamakhya Plastics Pvt. Ltd. –Vs- Union of India) as precedent. The respondent, Union of India, through the Assistant Solicitor General, submitted that a decision had been taken by the competent authority in the Ministry of Finance to refund such cess irrespective of whether the assessee had approached the High Court.