Order date – 02 September 2022

Facts – 

• The Appellant, M/s. Uniglobal Paper Private Limited, was issued Show Cause Notices for payment of Education Cess and Secondary & Higher Education Cess on Paper Cess on and from 01.05.2011. Consequently two Adjudication orders were passed.
• The said Adjudication orders covered the period from May 2011 to February 2012 and March 2012 to February 2013 confirming the demand of Education Cess and Secondary & Higher Education Cess on Paper Cess along with interest and imposition of penalty. The same were paid by the appellant. Thereafter the Appellant continued to pay Education Cess on Paper Cess up to 06.01.2014.
• On 07.01.2014, the Central Board of Excise & Customs (CBEC) issued a Circular stating that Education Cess and Secondary and Higher Education Cess is not to be calculated on other Cesses.
• In view of the aforesaid Circular No.978/2/20214-CX (F.No.262/2/2008-CX.8) dated 07.01.2014, the Appellant realized that the payments made by them so far have been made erroneously and the Department had mis-directed and collected the Tax without authority of law.
• Accordingly, the Appellant filed refund claims. A Show Cause Notice dated 29.09.2014 was issued proposing to reject the refund claim on the ground that the Appellant did not file any Appeal against the Adjudication orders.
• The Adjudicating authority rejected the refund claim by applying Section 11B of the Central Excise Act, 1944.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the Paper Cess is to be included in the calculation of Education Cess and Secondary and Higher Education Cess?

Order – 

• The Tribunal observed that since Cess on Paper is not a duty of excise, the provisions of Section 11B of the Central Excise Act would not apply
• The Tribunal relied on Hon’ble Gujarat High Court case of Joshi Technologies International and after considering the decision of the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd., in which the refund claims were filed in terms of Board’s Circular dated 07.01.2014 (which is applicable in the present Appeal), which was rejected by the department applying section 11B. The Hon’ble High Court quashed the adjudication order and allowed the refund claim
• Respectfully following the decisions of the Hon’ble High Court and the Tribunal, the Appeal filed by the Appellant was allowed.