2018 (10) TMI 950 - AT - Central Excise

Tribunal allows refund for education cess and PLA duty under Notification No. 56/2002-CE

The tribunal ruled in favor of the appellants, allowing them to claim refund/self-credit for education cess/higher education cess paid under Notification ... Refund of education/ higher education cess - N/N. 56/2002-CE dated 14.11.2002 - denial on the ground that appellants are not entitled to self credit/ refund of education/ higher education cess paid by them in terms of N/N. 56/2002-CE dated 14.11.2002 and also on the ground that in terms of N/N. 19/2008-CE dated 27.03.2008 and 34/2008- CE dated 10.06.2008, there are some restrictions for refund/ self credit to the appellants, instead self credit/ refund of duty paid through PLA. Refund/ self-credit of education cess/ higher education - Held that:- The appellants are entitled to claim refund/ self-credit of education cess/ higher education paid by them through PLA - issue decided in the case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT OF INDIA], where it was held that education cess/ higher education cess is continuation of duty paid by the assessee. If the assessee is entitled to refund of duty paid through PLA, then for the education cess/ higher education cess also, the assessee is entitled to claim refund/ self-credit - refund allowed. In terms of Notification No. 19/2008-CE dated 27.03.2008 and 34/2008-CE dated 10.06.2008, whether the appellants are entitled to claim refund/self-credit as restricted by these notifications or not? - Held that:- The notifications in question have been examined by the Hon’ble J & K High Court in the case of Reckit Benckiser vs. UOI [2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT], wherein the Hon’ble High Court quashed the notifications in question. Therefore, in terms of N/N. 56/2002-CE dated 14.11.2002, the appellants are entitled to claim refund/ self-credit of duty paid through PLA. Appeal allowed - decided in favor of appellant. Issues:1. Entitlement to refund/self-credit of education cess/higher education cess paid under Notification No. 56/2002-CE.2. Entitlement to claim refund/self-credit under Notification No. 19/2008-CE and 34/2008-CE.Analysis:Issue 1: Entitlement to refund/self-credit of education cess/higher education cess paid under Notification No. 56/2002-CE:The appellants contested the rejection of their refund claim under Notification No. 56/2002-CE, citing two grounds. Firstly, they argued that they were entitled to self-credit/refund of education/higher education cess paid, which was disputed. The tribunal referred to a precedent set by the Hon'ble Apex Court in the case of M/s. SRD Nutrients Pvt. Limited vs. CCE, Guwahati, where it was established that education cess/higher education cess is a continuation of duty paid by the assessee. Consequently, if the assessee is eligible for a refund of duty paid through PLA, they are also entitled to claim refund/self-credit for education cess/higher education cess. Therefore, the tribunal ruled in favor of the appellants, allowing them to claim refund/self-credit for education cess/higher education cess paid through PLA.Issue 2: Entitlement to claim refund/self-credit under Notification No. 19/2008-CE and 34/2008-CE:Regarding the appellants' entitlement to claim refund/self-credit under Notification No. 19/2008-CE and 34/2008-CE, the tribunal examined the notifications in question. It noted a judgment by the Hon'ble J & K High Court in the case of Reckit Benckiser vs. UOI, where the court had invalidated the notifications. Based on this precedent, the tribunal concluded that the appellants were indeed entitled to claim refund/self-credit of duty paid through PLA under Notification No. 56/2002-CE dated 14.11.2002. The Revenue's objection, citing a Division Bench decision of the Hon'ble High Court of Jammu & Kashmir allowing only 50% refund/self-credit, was dismissed. The tribunal emphasized that the order of the Hon'ble High Court in the case of Reckit Benckiser had not been overturned by a higher forum, thus maintaining its validity. Additionally, the tribunal highlighted that the vires of the notifications had been challenged in other cases, such as Unicorn Industries vs. UOI and VVF Limited vs. UOI, where the respective Hon'ble High Courts also invalidated the notifications. Consequently, the tribunal held that the refund/self-credit could not be restricted under Notification No. 19/2008-CE and 34/2008-CE, and the appellants were entitled to claim refund/self-credit of duty paid through PLA under Notification No. 56/2002-CE. As a result, all the appeals were allowed by the tribunal.