The Tripura High Court quashed the order of recovery of erroneous refund granted on education cess.
The petitioner, Tripura Ispat is a registered partnership firm and is engaged in the manufacture of excisable goods such as M.S. Ingots, HSD Bars, Rods etc. In order to encourage industrial growth in the North Eastern region and for the industrial development of the region the Government of India had formulated industrial policy.
The question of collecting education cess and higher education cess on goods that were exempt from payment of excise duty came up for consideration before a two-Judge Bench of the Supreme Court in case of SRD Nutrients Private Limited vs. Commissioner of Central Excise, Guwahati, wherein it was held that the education cess and the higher education cess are in the nature of surcharge and when the primary tax i.e. the basic excise duty itself is exempt such additional levies cannot be collected.
The Assistant Commissioner of Central Goods & Service tax, Agartala based on the decision of the Supreme Court held that the petitioner was entitled to receive the refund of the education cess and higher education cess collected on the goods cleared from its manufacturing units.
However, a few months after the Assistant Commissioner passed the said order, the decision of the Supreme Court in the case of SRD Nutrients came up for consideration in three-Judge Bench judgment in the case of Unicorn Industries versus Union of India wherein it was observed that the decision in case of SRD Industries was rendered per incuriam.
The Assistant Commissioner held that the refund of education cess and higher education cess was erroneously granted and therefore in terms of Section 11A of the Central Excise Act the same was liable to be recovered.
The division judge bench headed by Chief Justice Akil Kureshi and Justice S.G. Chattopadhyay clarified that Section 11A of the Central Excise Act does not authorize the Assistant Commissioner to revise or review his own order.
The court observed that in the show cause notice effectively what he proposes to do is revise and recall his own order on the ground that the law that he applied when he passed order of refund, has since been changed, which is wholly impermissible.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in
