M/S. Sethi Coke Industries 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, including secondary and higher education cess, collected from the petitioner during the period of March 2011 to December 2015. The Court's decision was based on the submission by the revenue that a policy decision had been taken to refund such cesses. The Court also took note of a previous identical order in WP(C) No. 5760 of 2018, where a similar direction for refund was issued. The reasoning implicitly accepted the petitioner's contention that the cesses were not leviable on exempted excise duty, or at least acknowledged the government's policy to refund them. The operative direction was for the refund to be processed within three months of receiving a certified copy of the order. No issues were expressly left undecided.

Facts

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

Key Issues

1. Whether the education cess and secondary and higher education cess are leviable on excise duty when the excise duty itself is exempted under a specific industrial policy notification? (Question of law) Petitioner's Contention: The petitioner argued that since the primary excise duty was exempted under the North-East Industrial Policy, 2007, and Notification No. 20/2007, the cesses levied on this excise duty should also be refunded. The petitioner contended that the cesses are ancillary to the excise duty and thus would not be leviable if the base duty is exempted. They relied on the principle that taxes on taxes are not leviable if the base tax is not applicable. Revenue's Contention: The revenue, represented by the Additional 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.