While giving a major Setback to petroleum Company Cairn India, the division of bench Rajasthan High Court has rejected the Company’s refund claim towards the Education Cess and Secondary and Higher Education Cess worth Rs. 300 Crore.
The Court set aside the Customs, Excise and Service Tax Appellate Tribunal order dated July 24, 2014, in which the Tribunal held that respondents-assessee, Cairn India Limited is not liable to pay any cess in terms of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007, being the cess as per Section 15(1) of the Oil Industries (Development) Act, 1974, is said to be not levied and collected by the Ministry of Finance.
The Revenue contended that, the tribunal erred while relying upon the law laid down in the case of Commissioner v. Sahakari Khand Udyog Mandi Ltd., as in the case aforesaid the Gujarat High Court was dealing with the provisions of Sugar Cess Act, 1982, whereas in the case in hand the oil cess is made applicable as per Section 15 of the Oil Industries (Development) Act, 1974. The provisions of the Act of 1974 are quite different than the provision of the Sugar Cess Act, 1982.
While allowing the appeal filed by Union of India, the bench comprising of Justice Govind Mathur and Justice Kailash Chandra Sharma observed that, “no any reason to escape the respondent from application of education/secondary and higher education cess under the Act of 2004 and the Act of 2007 respectively. The Customs, Excise and Service Tax Appellate Tribunal, under the judgment dated July 24, 2014, erred while arriving at the conclusion that respondent M/s Cairn India Ltd. is not liable to pay any cess in terms of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007, being not levied and collected by the Ministry of Finance (Department of Revenue).
Read the full text of the Judgment below.
