TMI Blog2022 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Ministry of Finance, Department of Revenue. They obviously lost sight of the Circular No. 978/2/2014-CX, dated 7-1-2014 where it has been clarified that the Education Cess and the Secondary and Higher Education Cess are not to be calculated on cesses which are levied under Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue), but rather only collected by the Department of Revenue in terms of those Acts. Hon ble Gujarat High Court in the case of Joshi Technologies International v. Union of India [ 2016 (6) TMI 773 - GUJARAT HIGH COURT] is squarely applicable to the facts of the present case, where it was held that Crude Oil Cess is not in the nature of excise duty and consequently, the Education Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law. As a necessary corollary, it follows that the provisions of the Central Excise Act, 1944 would not be applicable for refund of such amount paid by mistake. Moreover, since there was no liability to pay Education Cess and Secondary and Higher Secondary Educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollected by the Department wrongfully and the Department cannot retain the same. The amounts deposited so far being Education Cess on Paper Cess which they were not required to deposit has to be treated as a deposit with the Government and should be refunded to the Appellant. However, the Adjudicating authority rejected the refund claim by applying Section 11B of the Central Excise Act, 1944. On Appeal, the Ld.Commissioner(Appeals) bifurcated the refund claim and upheld the rejection of Rs.19,582/- as correct and for the balance claim of Rs.14,986/- set aside the rejection and remanded the matter to the lower authority. 3. Aggrieved by the order of the Ld.Commissioner(Appeals) both the Department and the assessee filed Appeals before the Tribunal. The Department was in Appeal challenging the order to the extent of remand and the assessee challenging the order in its entirety. Subsequently the Department filed a Miscellaneous Application before this Tribunal for withdrawal of their Appeal in terms of National Litigation Policy. The prayer of the Revenue was allowed and the Appeal was dismissed as withdrawn vide Order No.MO/75980/2018, FO/76877/2018 dated 05.11.2018. 4. The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cess is recoverable on duty. Other Cess recovered under different Acts are not duty and hence the Cess was never recoverable on other Cesses and the same was without the authority of law and the amount realized shall be refunded without raising any question of filing Appeal or compliance of Section 11B of the Central Excise Act, 1944. V. For that the Order passed by the Ld.Commissioner (Appeals) is also otherwise bad in law and in facts. 5. The Ld.Authorized Representative for the Department submitted that the Appellant manufactures excisable goods. On 10.07.2014 the Appellant had filed a claim for refund of Rs.34,568 paid towards Education Cess and Secondary and Higher Education Cess. The reason for filing the claim was that Education Cess and Secondary and Higher Education Cess. Cess was paid on Paper Cess , which was not levied by the Ministry of Finance, Department of Revenue, and hence, Education Cess and Secondary Higher Education Cess was not payable on Paper Cess , and therefore, it was refundable to the Appellant. In support of the claim, the Appellant relied upon a CBEC Circular dated 07.01.2014.By a Show Cause Notice dated 29.09.2014, the Department proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the Paper Cess is to be included in the calculation of Education Cess and Secondary and Higher Education Cess. The Department took a stand that Education Cess is levied on the excise duty and Cess on paper is also a duty of excise, therefore, it should be included. 9. The Board Circular No.978/2/20214-CX (F.No.262/2/2008-CX.8) dated 07.01.2014 is reproduced for ready reference:- Circular No. 978/2/2014-CX, dated 7-1-2014 F.No. 262/2/2008-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Levy of the Education Cess and the Secondary and Higher Education Cess on other cesses - Regarding. Attention is invited to Circular No. 345/2/2004-TRU (Pt.), dated 10 th August, 2004 [2004 (171) E.L.T. (T3)], in which it was clarified that the Education Cess chargeable under Section 93(1) of the Finance (No. 2) Act, 2004 is to be calculated by taking into account only such duties which are both levied and collected by the Department of Revenue. 2. Representations have been received from trade and field formations seeking clarification as to whether the Education Cess chargeable under Section 93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and the Secondary and Higher Education Cess are not to be calculated on cesses which are levied under Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue), but rather only collected by the Department of Revenue in terms of those Acts. 11. I find that decision of Hon ble Gujarat High Court in the case of Joshi Technologies International v. Union of India [2016 (339) E.L.T. 21 (Guj.)] is squarely applicable to the facts of the present case. In that case the petitioner was paying cess on the clearance of petroleum/crude oil under the provisions of Oil Industries (Development) Act, 1974. The petitioner filed a letter dated 17.07.2014 requesting for refund of the amount of Rs.73,60,061/- paid on account of Education Cess and Secondary and Higher Education Cess inadvertently during the period July 2004 to April 2014. Refund claim was filed in terms of Board s Circular dated 07.01.2014 (which is applicable in the present Appeal). The Department had rejected the entire refund claim under the provisions of Section 11B of the Central Excise Act, 1944 which was challenged before the Hon ble High Court.The refund claim was rejected on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules, as the case may be. 138. Secondary and Higher Education Cess on excisable goods . - (1) The Secondary and Higher Education Cess levied under Section 136, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Secondary and Higher Education Cess on excisable goods), at the rate of one per cent calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess chargeable under Section 93 of the Finance (No. 2) Act, 2004 (23 of 2004) and Secondary and Higher Education Cess on excisable goods) which are levied and collected by the Central G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil cess is not a duty of excise, under the circumstances, the basic requirement of levy of such cesses is not satisfied. Furthermore, for the purpose of levy of Education Cess and Secondary and Higher Secondary Education Cess, two other conditions precedent, are required to be satisfied, viz., (i) that the duty of excise should be levied by the Central Government in the Ministry of Finance (Department of Revenue); and (ii) the duty of excise should be collected by the Central Government in the Ministry of Finance (Department of Revenue). In the present case, since the machinery provisions of the Central Excise Act, 1944 and the rules framed thereunder have been incorporated in the OID Act, the second condition precedent is satisfied, viz. that the cess is collected by the Central Government in the Ministry of Finance (Department of Revenue); however, the first condition with regard to levy of such duty of excise by the Central Government in the Ministry of Finance (Department of Revenue) is not satisfied inasmuch as the oil cess under the OID Act is levied by the Ministry of Petroleum and Natural Gas. In the aforesaid premises, the requirements of Section 93 of the Finance Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eum and Natural Gas. The petitioner was therefore, wholly justified in making the application for refund under a mistake of law and not under Section 11B of the Central Excise Act, 1944. 13 . The next question that needs to be addressed is the aspect of limitation. The refund application has been made in July, 2014 seeking refund of the amount paid for the period July, 2004 to April, 2014. On behalf of the revenue it has been contended that in view of the provisions of Section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression relevant date is defined under clause (B) of the Explanation to Section 11B of CE Act and insofar as the present case is concerned would be the date of payment of duty. However, as discussed hereinabove, the provisions of Section 11B of the Act would not apply to the claim of refund made by the petitioner. Consequently, the limitation prescribed under the said provision would also not be applicable. 14 . It has been further contended on behalf of the revenue, that in case the limitation prescribed under Section 11B of the CE Act is not applicable, the ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner came to know about its mistake and in July, 2014, it filed the application for refund before the second respondent. Since the period of limitation begins to run only from the time when the applicant comes to know of the mistake, the application made by the petitioner was well within the prescribed period of limitation. Moreover, as discussed hereinabove, the retention of the Education Cess and Secondary and Higher Secondary Education Cess by the respondents is without authority of law and hence, in the light of the decision of this court in Swastik Sanitary wares Ltd. v. Union of India (supra), the question of applying the limitation prescribed under Section 11B of the CE Act would not arise. ********************** 16 . The claim of refund made by the petitioner to the extent the same was within the period of limitation has been turned down by the adjudicating authority on the ground of unjust enrichment. The adjudicating authority has held that the petitioner was required to file the refund claim under the provisions of Section 11B of the Central Excise Act, 1944 along with the documentary evidences as provided under Section 12A. According to the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at these are mere statements, without giving the specific details of the relevant financial record i.e. balance sheet, from which the veracity of the said statement could be verified. The above said certificates itself does not have any evidential value, unless the contents of them are supported by documentary evidence. ********************** 17.3 In the opinion of this court having regard to the price clause contained in the Crude Offtake and Sales Agreement and the certificate of the Chartered Accountant and the documents referred to hereinabove, more particularly, the certificate dated 29-7-2015 issued by IOCL, the above decision of the Supreme Court would be squarely applicable to the facts of the present case. Thus, from the certificate issued by the IOCL, it is evident that the IOCL which is the sole customer, has certified that it has not paid any Education Cess and/or Secondary and Higher Secondary Education Cess on the OID cess to the petitioner in view of the fact that the price paid for crude purchased by it from the petitioner is fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and ro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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