Decision in Unicorn Industries cannot have bearing on past final decisions: CESTAT allows Refund of Education Cess and S&H Education Cess [Read Order]

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that decision in Unicorn Industries cannot have bearing on past final decisions and allowed the refund of Education Cess and S&H Education Cess.

M/s Jindal Photo Limited, the appellant during the period from August, 2007 to July, 2009 filed refund claim in respect of Education Cess and S&H Education Cess under exemption Notification No. 56/2002-CE dated 14.11.2002 amounting to Rs. 14,79,272/- through self-credit mode. After following the due process the original authority rejected these claims by holding that their refund claim on account of Education Cess and S&H Education Cess paid through PLA is not admissible to the appellant in terms of the said notification, as the said Education Cesses have been levied under the Finance Act, 2004 & Finance Act, 2007 respectively and not under any of the Acts as mentioned in the said notification.

On appeal, the Commissioner rejected the appeal on account of non deposit of mandatory pre-deposit. Against the said order, the appellant approached the Hon’ble CESTAT and vide its order dated 20.01.2017 and 14.02.2017 the matter was remanded back to the Commissioner (Appeals) for fresh consideration without insisting pre-deposit since it was a case of rejection of refund claim. 

At the same time, parallel proceedings for recovery of the selfcredit/refund erroneously taken by the appellant in respect of Education Cess and S&H Education Cess i.e. on the same matters and overlapping period,  were adjudicated vide (5) different show cause notices. This parallel proceedings eventually reached the CESTAT, wherein the entire amount of demand was deposited as predeposit and on merits, vide Final Order no. 63301/2018 dated 25.10.2018. It was held that appellant is entitled to take the refund of Education Cess and S&H Education Cess, therefore, the appellant duly applied for refund of amount so deposited as pre-deposit and was granted the same vide order dated 11.03.2019.

Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submits that an amount of Rs. 22,69,936/- has already been refunded to the appellant on the same issue and for overlapping period on the strength of the Supreme Court’s decision in SRD Nutrients Vs. CCE. He further submitted that once it has been held that the appellant is entitled to refund of Education Cess and S&H Education Cess on the basis of SRD Nutrients case then the department is not entitled to make recovery of the said refunded amount on the basis of subsequent decision of the Supreme Court in the case of Unicorn Industries.

The High Court in the impugned order while considering the judgment passed by this Court in SRD Nutrients (P) Limited as well as M/s Unicorn Industries has observed that

"Applying the aforesaid principle in the cases at hand, since the assessee has been held entitled to the refund of the Educational cess and Secondary & Higher Educational cess on the basis of a judgment and order of the Supreme Court in case SRD Nutrients which was in vogue at the relevant time, the appellants are not entitled to make recovery of the said refunded amount on the basis of the subsequent decision of the Supreme Court rendered in the case of Unicorn Industries. If such an action is permitted, it will open a Pandora box and the lis between the parties which had attained finality will never come to an end. This would be against the public policy which envisages providing quietus to litigation at some stage."

In substance, the High Court has stated that the decision in SRD Nutrients (P) Limited had attained finality and was binding on the parties thereto. Therefore, the subsequent decision of this Court overruling SRD Nutrients (P) Limited  in the case of M/s Unicorn Industries cannot have a bearing on past decisions which had attained finality although they had followed SRD Nutrients (P) Limited , which was subsequently overruled in M/s Unicorn Industries. Otherwise a pandora's box would be opened and there would be no end to litigation, which is against public policy.

A single member bench of Mr S S Garg, Member ( Judicial ) observed that since in the parallel proceedings for recovery of the selfcredit/refund in respect of Education Cess and S&H Education Cess has been settled up to the Apex Court and the decision of the Tribunal dated 25.10.2018 holding that the appellant is entitled to the refund of Education Cess and S&H Education Cess and the said order has been complied with by the Revenue. 

The CESTAT set aside the impugned order and allowed the appeal. Shri R.K. Hasija and Shri Shivang Puri, Advocate appeared for the appellant and Shri Aneesh Dewan, Shri Narinder Singh and Shri Shivam Syal, Authorized Representatives  apperaed for the revenue respondent.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates