Gauhati High Court
Case No. : Wp(C)/2573/202 vs The Union Of India And 3 Ors on 9 April, 2021
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GAHC010026942021
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/2573/2021
M/S GATTANI INDUSTRIES
A FIRM HAVING ITS REGISTERED OFFICE ANA FACTORY AT CINNAMARA
INDUSTRIAL ESTATE, MARIANI ROAD, JORHAT-785008 ASSAM
VERSUS
THE UNION OF INDIA AND 3 ORS
REP. BY THE SECRETARY TO THE GOVT. OF INDIA MINISTRY OF FINANCE
DEPTT. OF REVENUE NORTH BLOCK, NEW DELHI
2:THE SECRETARY
TO THE GOVT. OF INDIA MINISTRY OF COMMERCE AND INDUSTRY
UDYOG BHAWAN
NEW DELHI
3:THE COMMISSIONER CGST AND CENTRAL EXCISE
GST BHAWAN KEDAR ROAD
GUWAHATI-781001
ASSAM
4:THE ASSISTANT COMMISSIONER GST AND CENTARL EXCISE
O/O THE ASSISTANT COMMISSIONER PF CENTARL EXCISE JORHAT
DIVISION STATION ROAD
JORHAT-785001
ASSA
Advocate for the Petitioner : MS. M L GOPE
Advocate for the Respondent : SC, GST
BEFORE
HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA
O R D E R
09.04.2021
Heard Ms. N. Hawelia, learned counsel for the petitioner. Also heard Ms. G. Hazarika,
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learned counsel appearing for the respondents.
2. Issue notice returnable in four weeks.
3. Extra copies to the respondent within 7 (seven) days.
4. The petitioner in course of their economic activities under the Northeast Industrial
Policy, 2007 were entitled to certain exemption in the payment of excise duty. Along with
excise duty, as per the relevant law in force at that period to time they were also required to
pay certain Education Cess &Secondary and Higher Education Cess.
5. The Education Cess & Secondary and Higher Education Cess were required to have
been calculated on the basis of the excise duty payable.
6. In the circumstance, a question had arisen as to whether in view of the exemption
granted to the excise duty the petitioner would also be entitled to an exemption to the
payment of Education Cess & Secondary and Higher Education Cess. The said question was
decided by the Supreme Court in its pronouncement in SRD Nutrients Pvt. Ltd. Vs.
Commissioner of Central Excise, Guwahati reported in (2018) 1 SCC 105 wherein in paragraph
27 of the said judgment it was held that the appellants therein were entitled to refund of
education cess and higher education cess which was paid along with the excise duty once the
excise duty itself was exempted from levy.
7. In the resultant circumstance, by the order dated 05.02.2019 of the Assistant
Commissioner, Excise, GST and Central Excise, certain amounts were sanctioned for being
refunded to the petitioner and accordingly the refunds were effected. Subsequent thereto,
the Supreme Court in its pronouncement in Unicorn Industries vs. Union of India and others
reports in 2019 SCC Online SC 1567 in paragraph 49 had held as under:
"49. The reason employed in SRD Nutrients Private Limited (supra) that there was nil excise
duty, as such, additional duty cannot be charged, is also equally unacceptable as additional duty
can always be determined and merely exemption granted in respect of a particular excise duty,
cannot come in the way of determination of yet another duty based thereupon. The proposition
urged that simply because one kind of duty is exempted, other kinds of duties automatically fall,
cannot be accepted as there is no difficulty in making the computation of additional duties,
which are payable under NCCD, education cess, secondary and higher education cess.
Moreover, statutory notification must cover specifically the duty exempted. When a particular
kind of duty is exempted, other types of duty or cess imposed by different legislation for a
different purpose cannot be said to have been exempted. 51. Thus, it is clear that before the
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Division Bench deciding SRD Nutrients Private Limited and Bajaj Auto Limited (supra), the
previous binding decisions of three-Judge Bench in Modi Rubber (supra) and Rita Textiles
Private Limited (supra) were not placed for consideration. Thus, the decisions in SRD Nutrients
Private Limited and(supra) and Rita Textile Private Limited (supra) are binding on us being of
Coordinate Bench, and we respectfully follow them. We did not find any ground to take a
different view."
8. In view of the subsequent judgment of the Supreme Court in Unicorn Industries
(supra) the respondent authorities had issued the order dated 21.01.2021 to the petitioners
by which a question was raised that the earlier refund of the Education Cess & Secondary and
Higher Education Cess given to them has now become erroneous refunds and therefore, a
recovery be made under section 11(A-1) of the Central Excise Act 1944. The order dated
21.01.2021 is assailed in this writ petition on the ground that the condition precedent to
invoke the power under section 11(A-1) is that the refund made must be erroneous. It is
contended when the refund was effected during the period prior to the judgment of the
Supreme Court in Nicorn Industries (supra), at that point of time the proposition laid down in
SRD Nutrients Private Limited (supra) was in force which had decided in favour of such
refunds. Accordingly, it is contended that when the refunds were made the law in force was
that such refunds were justified under law and therefore, the refund was made was not
erroneous.
9. It being so, condition precedent of section 11(A-1) of the Excise Central Act, 1944 is
not satisfied.
10. In the above circumstance, a question for determination would be as to whether the
proposition of law laid down in Unicorn Industries (supra) would render the refunds made to
the petitioners to be erroneous.
11. In view of the above, until further orders we stay the operation of the order dated
21.01.2021.
12. List after four weeks.
JUDGE
Comparing Assistant
