Refund of education cess and higher education cess follows excise duty exemption where the underlying duty itself is exempt.

Education cess and higher education cess paid by an industrial unit that enjoyed excise duty exemption under the North East Industrial Policy were treated as refundable because the cesses followed the character of excise duty. The Supreme Court principle on refund of such cesses where excise duty is exempt was applied, and the parties accepted that the same rule governed the claim. Refund was therefore recognised for the relevant period from July 2004 to February 2015.

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Issues: Whether education cess and higher education cess paid by an industrial unit enjoying excise duty exemption under the North East Industrial Policy were refundable along with the exempted excise duty.

Analysis: The claim turned on the legal character of education cess and higher education cess when the underlying excise duty itself stood exempted under the applicable notifications. The Court noted that the Supreme Court had already held that such cesses partook the character of excise duty and were refundable where excise duty was exempt. The respondents also accepted that the same principle governed the present case, and the parties reached consensus on refund for the relevant period.

Conclusion: The petitioner was held entitled to refund of the education cess and higher education cess paid from July 2004 to February 2015.

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