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2025 (5) TMI 52 - AT - Central ExciseRefund of education cess and secondary higher education cess paid during the disputed periods under the area-based exemption N/N. 56/2002-CE dated 14.11.2002 - demand by holding that education cess and secondary higher education cess are not duties of excise and therefore for payment of education cess and secondary higher education cess CENVAT Credit of basic excise duty cannot be used - HELD THAT - This issue has been settled by the Hon ble Apex Court in the case of SRD Nutrients Pvt. Ltd. 2017 (11) TMI 655 - SUPREME COURT which has been subsequently followed in various final orders passed by this Tribunal viz Final Order in SUN PHARMACEUTICAL INDUSTRIES 2018 (3) TMI 2009 - CESTAT CHANDIGARH and Final Orders in SUN PHARMACEUTICALS INDUSTRIES 2018 (8) TMI 2128 - CESTAT CHANDIGARH . Following the above said final orders in the appellant s own case of the previous period the Tribunal set aside the order of Commissioner (Appeals) and allowed the appeals of the appellant. Conclusion - The appellant is entitled to refund of education cess and secondary higher education cess for the disputed periods. The impugned order is not sustainable and is set aside - appeal allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in these appeals are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Entitlement to refund of education cess and secondary & higher education cess Relevant legal framework and precedents: The appellant was operating under area based exemption Notification No. 56/2002-CE dated 14.11.2002, which provides exemption from basic excise duty for specified goods. The dispute arose because the appellant claimed refund of education cess and secondary & higher education cess paid, which was rejected by the department on the ground that these cesses are not duties of excise and hence not eligible for CENVAT Credit or refund. The key precedent relied upon by the appellant is the Hon'ble Apex Court decision in SRD Nutrients Pvt Ltd vs. CCE, Guwahati - 2017 (355) ELT 481 (SC), which held that education cess and secondary & higher education cess are integral parts of excise duty and eligible for refund. Court's interpretation and reasoning: The Tribunal noted that the impugned order by the Commissioner (Appeals) rejected the refund claim by holding that education cess and secondary & higher education cess are not excise duties. However, this position was overruled by the Apex Court in SRD Nutrients Pvt Ltd, which clarified that these cesses are part of excise duty and thus refundable. The Tribunal further observed that this legal position has been consistently followed in various final orders passed by the Tribunal itself, including in the appellant's own cases for previous periods. Key evidence and findings: The Tribunal relied on the appellant's own prior appeals where the refund of education cess and secondary & higher education cess was allowed following the Apex Court's ruling. The Tribunal also considered the show cause notices issued for recovery of refund claims and found them to be infructuous in view of settled law. Application of law to facts: Since the appellant was entitled to refund of the cesses as per binding judicial precedents, the rejection of refund by the Commissioner (Appeals) was contrary to law. The Tribunal applied the Apex Court's ruling and its own consistent precedents to hold that the appellant's refund claims were valid. Treatment of competing arguments: The Revenue's argument reiterating the impugned order was rejected as the Tribunal found that the issue was no longer res integra and had been conclusively settled in favour of the appellant by the Apex Court and the Tribunal's own prior decisions. Conclusions: The appellant is entitled to refund of education cess and secondary & higher education cess paid, and the show cause notices issued for recovery of such refund claims are not sustainable. Issue 2: Whether education cess and secondary & higher education cess are duties of excise Relevant legal framework and precedents: The legal question whether education cess and secondary & higher education cess constitute duties of excise was conclusively addressed by the Apex Court in SRD Nutrients Pvt Ltd, which held these cesses to be part of excise duty and thus eligible for CENVAT Credit and refund. Court's interpretation and reasoning: The Tribunal emphasized that the impugned order's contrary view was overruled by the Apex Court and that this Tribunal had consistently followed the Apex Court's decision in multiple final orders. The Tribunal also referred to the Apex Court's ruling in Commr of CGST, Jammu vs. Saraswati Agro Chemicals Pvt Ltd - 2023 (386) ELT 193 (SC), which underscored the principle of finality in litigation and held that once a decision is rendered by the Apex Court, it cannot be reopened or reviewed merely because a subsequent larger bench overruled it. Key evidence and findings: The Tribunal found that the appellant's own cases for earlier periods were decided in their favour following the Apex Court's ruling. The Tribunal also noted the legal principle that education cess and secondary & higher education cess are integral components of excise duty for the purposes of CENVAT Credit and refund. Application of law to facts: Applying the settled legal position, the Tribunal held that education cess and secondary & higher education cess are excise duties and hence the appellant was entitled to utilize CENVAT Credit for their payment and claim refund thereof. Treatment of competing arguments: The Revenue's insistence on non-entitlement was rejected as contrary to binding judicial precedents and the principle of finality in litigation. Conclusions: Education cess and secondary & higher education cess are duties of excise and eligible for refund and CENVAT Credit. Issue 3: Validity of show cause notices for recovery of refund claims Relevant legal framework and precedents: The show cause notices were issued for recovery of refund claims rejected on the ground that education cess and secondary & higher education cess were not excise duties. The Tribunal relied on the settled law from the Apex Court and its own prior decisions holding these cesses to be excise duties. Court's interpretation and reasoning: The Tribunal held that since the refund claims were valid and the rejection of refund was contrary to law, the show cause notices seeking recovery became infructuous and unsustainable. Key evidence and findings: The Tribunal noted the appellant's prior successful appeals and the binding Apex Court rulings confirming entitlement to refund. Application of law to facts: The Tribunal applied the principle that once a refund claim is validly allowed by judicial authority, recovery proceedings based on contrary orders cannot be sustained. Treatment of competing arguments: The Revenue's reliance on the impugned order was rejected as the Tribunal found that the issue was conclusively settled in favour of the appellant. Conclusions: The show cause notices for recovery of refund claims are not sustainable and must be set aside. 3. SIGNIFICANT HOLDINGS The Tribunal made the following crucial legal determinations:
This pronouncement underscores the principle of finality in litigation and that once a decision is rendered by the Apex Court, it cannot be reopened or reviewed to align with a subsequent overruling decision, thereby protecting litigants from repeated vexation. The Tribunal also established the core principle that education cess and secondary & higher education cess are integral parts of excise duty and thus eligible for refund and utilization of CENVAT Credit, following the binding Apex Court decision in SRD Nutrients Pvt Ltd. Final determinations on each issue are as follows:
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