A valid refund cannot be revoked based on subsequent changes in law as established Supreme Court decisions must apply retrospectively to actions taken under prior law.

JUDGMENT

Akil Kureshi, CJ. - Petitioner has challenged a show-cause notice dated 03.07.2020 issued by the Assistant Commissioner of Central Goods & Service Tax, Agartala, respondent No.3 herein calling upon the petitioner to show-cause why an amount of Rs.53,06,055/- which according to the said respondents was erroneously refunded to the petitioner should not be recovered under Section 11A of the CENTRAL EXCISE ACT , 1944 along with interest.

2. Briefly stated the facts are as under :

Petitioner is a registered partnership firm and is engaged in the manufacture of excisable goods such as M.S. Ingots, HSD Bars, Rods etc. falling under Central Excise Tariff Sub Heading No.72142090 & 72061010. In order to encourage industrial growth in the North Eastern region and for the industrial development of the region the Government of India had formulated industrial policy. After due deliberations the Government of India issued a notification dated 24.12.1997 under which certain areas such as growth centres, infrastructure development centres, export promotion and industrial parks etc. were made tax free zones for a period of 10 years. Pursuant to such notification various circulars were issued giving shape to the said industrial policy granting exemption from payment of excise and additional duty of excise. In subsequent policy decisions taken by the Government of India in the year 2007 also such concessions were continued. Attracted by the tax concessions offered by the Government of India the petitioner established a plant for manufacture of excisable goods such as M.S. Ingots, HSD Bars etc. in the State of Tripura. The commercial production commenced on or around 13th February, 2006. For the goods cleared by the petitioner from its manufacturing unit it claimed exemption under notification dated 25.04.2000 and claimed refund of CENVET duty paid in cash. In the year 2004 the Parliament introduced Education and Higher Education Cess. The petitioner was of the view that since there was exemption in payment of basic excise duty, Education and Higher Education cess also would be exempt. The petitioner therefore claimed refund of such duties paid in cash. However, the departmental authorities refused to refund the same at one stage.

3. The question of collecting education cess and higher education cess on such goods which were exempt from payment of excise duty, came up for consideration before a two-Judge Bench of the Supreme Court in case of SRD Nutrients Private Limited versus Commissioner of Central Excise, Guwahati, reported in (2018) 1 SCC 105. In the said decision it was held that the education cess and the higher education cess are in the nature of surcharge and when the primary tax i.e. the basic excise duty itself is exempt such additional levies cannot be collected. The Supreme Court concluded as under :

"27. For the aforesaid reasons, we allow these appeals and hold that the appellants were entitled to refund of education cess and higher education cess which was paid along with excise duty once the excise duty itself was exempted from levy. There shall, however, be no order as to costs."

4. Based on the said decision of the Supreme Court the petitioner made refund applications before the competent authority. By an order dated 29th May, 2019 the Assistant Commissioner of Central Goods & Service tax, Agartala passed a detailed speaking order and held that the petitioner was entitled to receive the refund of the education cess and higher education cess collected on the goods cleared from its manufactu