Rajasthan High Court today rejected a petition of the petroleum major Cairn India Energy seeking refund of the Education Cess and Secondary Education Cess amounting to Rs.300 crore.
A Division Bench of the High Court, headed by Justice Govind Mathur, set aside the order of the Central Excise and Sales Tax Appellant Tribunal while allowing the appeal of the central government which had opposed the claim of the company.
The court upheld the order of the Commissioner (Appeals), which had rejected the energy major's claim for refund of the cess.
Senior Standing Counsel for the Central Government and Central Excise, Customs and Service Tax Department, Vipul Singhvi, in his appeal against the Tribunal's order, argued that the Education Cess and Secondary Education Cess was first levied in 2004 and 2007 respectively under the Finance Act.
"It was a provision under this Act that both above mentioned cess would be levied in the form of tax on all types of duties under Central Excise. This also applied on the Oil Cess levied under Oil Industries Development Act, 1974," Singhvi argued in the court.
The counsels for the Cairn Energy India, on the other hand, argued that the provisions of Oil Industries Development Act are similar to the Sugar Cess Act and other cess and hence this Education Cess and Secondary Education Cess did not apply on the Oil Cess.
Contesting this argument, Singvi said the Oil Cess was not 'pari materia' (similar) to other cess applicable in the country and prayed for the rejection of the writ petition for refund by the energy major.
After considering the arguments from both sides, the High Court allowed the appeal of the central government and dismissed the appeal filed by Cairn India Energy seeking refund of Rs.300 as Education Cess and Secondary Education Cess.
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