IA. K. SIKRI AND ASHOK BHUSHAN, JJ.] versus COMMISSIONER OF CENTRAL EXCISE GUWAHATI

Citation: [2017] 11 S.C.R. 43 · Decided: 10-11-2017 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

{2017] 11 S:C.R.43 
MIS. SRD NUTRIENTS PRIVATE LIMITED 
v. 
COMMISSIONER OF CENTRAL EXCISE GUWAHATI 
(Civil Appeal Nos. 2781-2790 of20 I 0) 
NOVEMBER I 0. 20 l 7 
IA. K. SIKRI AND ASHOK BHUSHAN, JJ.] 
Central Excise Act, 1944: 
A 
B 
s.5A(/) - Grant of exemption - From excise duty - Of all 
goods cleared from the north-east States - By Notification dated 
C 
25.4.2007 - Notification provided that assessee would be entitled 
to re/imd of duty paid other than the duzv paid by way of utilization 
of CENVAT credit under CENVAT Credit Rules, 2004 - By Finance 
Act, 2004 Education Cess and Higher Education Cess also imposed 
which are surcharge 011 the excise duty - Education cess and Higher 
D 
Education Cess also levied and collected from the manufacturers 
who had set up th11ir units in north-east areas, alongwith the excise 
duty - Howeve1; while refimding the excise duzv paid, Education 
Cess and Higher Education Cess were not refunded - Whether 
Education Cess or Higher Education Cess were re.fi111dahle with 
r~fimd of excise duty as per the Notification - Held: It is clear.fi'om 
Cin·ular dated August JO, 2004 and Circular dated April 8, 2004 
that Government itself had taken the position that where whole of 
excise du~v is exempted, even the Education and Higher Education 
Cess would not he payable - When there is no excise duty payable, 
there would no Education Cess - Notification 2012007-C.E. dated 
E 
F 
25 Apr.2007. 
Allowing the appeals, the Court 
HELD: I. It is clear from two circulars i.e. Circular dated 
August IO, 2004 and Circular dated April 8, 2011 that the 
Government itself has taken the position that where whole of G 
excise duty or service tax is exempted, even the Education Cess 
as well as Secondary and Higher Education Ccss would not be 
payable. These circulars are binding on the Department. f Para 
201157-G] 
43 
H 
44 
A 
B 
c 
D 
SUPREME COURT REPORTS 
[2017] I l S.C.R. 
2. Even otherwise, it is more rational to accept the aforesaid 
position as clarified by the Ministry of Finance in the aforesaid 
circulars. Education Cess is on excise duty. It means that those 
assessecs who are required to pay excise duty have to shell out 
Education Ccss as well. This Education Cess is introduced by 
Sections 91 to, 93 of the Finance (No.2) Act, 2004. A conjoint 
reading of these provisions would amply demonstrate that 
Education Cess as a surcharge, is levied @ 2% on the duties of 
excise which arc payable under the Act. It can, therefore, he 
clearly inferred that when there is no excise duty payable, as it is 
exempted, there would not be any Education Cess as well, 
inasmuch us Education Ccss @ 2% is to he calculated on the 
aggregate of duties of excise. There cannot be any surcharge 
when basic duty itself is Nil. It is also trite that when two views 
arc po.:.iblc, 01ie which favours the asscssecs has to be adopted. 
[Paras 21, 231[58-A-B, D, E; 60-F] 
Collector of Ce/lira/ Excise, Patna v. Tata Engineering 
and Locomotive Co. 1997 (92) ELT 303 (SC) - relied 
on. 
Bharat Box Factory Ltd. v. Commissioner of C. Ex., 
Jamm11 2007 (214) ELT 534 (Tri.-Del.); Cyrus 
E 
S111j(1ctants Pvt. Ltd. v. Commissioner <1. Central Excise, 
Jammu 2()07 (215) ELT 55 (Tri.-Del.); Banswara Svntex 
Ltd. v. Union of India 2007 (216) ELT 16 (Raj.) -
approved. 
Commissioner of Central Excise, Jammu v. Jindal Dnigs 
F 
Ltd. 20 II (267) ELT 653 (Tri.-Del.) - disapproved. 
Assistant Commissioner <~(Commercial Taxes (Ass/I.) 
Dharwar v. Dharmendra Trading Company Etc. Etc. 
(1998) 3 SCC 570; Commissioner of Central Excise. 
Mangalore v. Suzlon wind International 2012-TIOL-
G 
1837-CESTAT-BANG; R.S. Joshi, Sales Tax Officer, 
G11jarat and Others v. Ajit Mills Limited and Another 
AIR 1977 SC 2279 : (1977) 40 STC 497; Biswanath 
Hosie1:v Mills Ltd. & Am: v. Union of India & Ors. (2017) 
346 ELT 353; Balasore Alluys Ltd. v. CCE, Customs 
and Service Tax, BBSR-l (2010-TIOL-1659-CESTAT-
H 
KOL) - referred to. 
M/S. SRD NUTRIENTS PRIVATE LIMITED v. COMMISSIONER 
45 
OF CENTRAL EXCISE GUWAHATI 
Case Law Reference 
2007 (214) ELT 534 (Tri.-Dcl.) 
approved 
Para 9 
2007 (215) ELT 55 (Trl.-Dcl.) 
approved 
Para 9 
2011 (267) ELT 653 (Tri.-Del.) 
disapproved 
Para 10 
(1998) 3 sec 570 
referred to 
Para 12 
2012-TIOL-1837-CESTAT-BANG 
referred to 
Para 13 
2007 (216) ELT 16 (Raj.) 
approved 
Para 13 
AIR 1977 SC 2279 
referred to 
Para 14 
(2017) 346 ELT 353 
referred to 
Para 15 
(20 I O-TIOL-1659-CESTAT-KOL) 
referred to 
Para 18 
1

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