From Our Bureau
NEW DELHI: The Supreme Court on Wednesday held that the revenue department cannot recover thee refunded cess that was based on a judgment which was later overruled.
It has upheld the decision of the Jammu and Kashmir and Ladakh (J&K&L) High Court where the court had held that the assessee was not liable to return the Education Cess and secondary and higher education cess in view of the law subsequently laid down in 2020 by the Supreme Court in case of Unicorn Industries.
In the present case, Commissioner of CGST and Central Excise (J and K) vs M/s Saraswati Agro Chemicals Pvt. Ltd, the bench of Justices B.V. Nagarathna and Prashant Kumar Mishra was hearing an appeal against the J&K High Court’s ruling that the assessee ws entitled to the refund on the basis of the Supreme Court’s 2018 judgment in case of SRD Nutrients Private Limited.
The Apex Court in M/s SRD Nutrients had held that when payment of Excise Duty is exempt under the Central Excise Act, 1944, then the 2% cess recovery will also be exempted. However, later in the case of Unicorn Industries, thos judgment was over ruled, holding that there is no exemption from payment of the education cess where the exemption from payment of the excie duty i granted under a notification.
Noting that the decision in M/s SRD Nutrients was overruled by the top court on 06.12.2019 in M/s Unicorn Industries, the bench remarked that the reference order dated 27.09.2021 made by the Supreme Court was unnecessary.
The reference order was passed by the Apex Court in a miscellaneous application filed by the Revenue Department seeking to undo the judgment in M/s SRD Nutrients.
At the outset, the court observed that such an application could not have been filed by the Department after a review petition in M/s SRD Nutrients has been dismissed by the Apex Court.
