M/S Raj Coke Industries vs. Union Of INDIA And 6 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, including secondary and higher education cess, collected from the petitioner during the period of March 2011 to December 2015. This direction was based on the submission by the learned Assistant Solicitor General that the competent authority in the Ministry of Finance had decided to refund such cess. The Court also took note of a previous identical order passed by the High Court in WP(C) No. 5760 of 2018. The refund was to be processed within three months from the date of receipt of a certified copy of the order. The writ petition was disposed of.

Facts

M/s Raj Coke Industries, an industrial unit in Assam, filed a writ petition seeking a direction for the refund of education cess and secondary and higher education cess collected from March 2011 to December 2015. The petitioner claimed entitlement to 100% refund of central excise duty paid under the North-East Industrial Policy, 2007, and Notification No. 20/2017. The petitioner contended that since excise duty itself was exempted, the cess levied on excise duty should also not be leviable. The petitioner cited an identical case, WP(C) No. 5760 of 2018 (Kamakhya Plastics Pvt. Ltd –Vs- Union of India), decided on August 27, 2018, where a similar refund was directed.

Key Issues

1. Whether the petitioner is entitled to a refund of education cess and secondary and higher education cess collected for the period from March 2011 to December 2015, in terms of Notification No. 20/2007, given that the petitioner was otherwise exempted from central excise duty under the North-East Industrial Policy, 2007. Petitioner's argument: The petitioner argued that education cess and secondary and higher education cess are levied on excise duty. Since the excise duty itself was exempted under the industrial policy, the cess levied on it should also not be leviable. They relied on the principle that a tax on a tax is not leviable if the base tax is exempted. They also referred to a previous High Court decision in an identical case. Revenue's argument: The learned Assistant Solicitor General of India 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.