Messrs Vibrant Products & Anr. Vs Union Of India & Ors. (Gujarat High Court)
Summary: The Gujarat High Court dismissed the writ petition filed by Messrs Vibrant Products & Anr. challenging the constitutional validity of Rule 12(4) of the Health Security Se National Security Cess Rules, 2026 and the order dated 22.04.2026 rejecting their application seeking abatement of cess.
The petitioners were engaged in manufacturing and supplying pan masala (not containing tobacco), classified under Tariff Item No. 21069020. The goods attracted levy of cess under the Health Security Se National Security Cess Act, 2025 along with GST under the Central Goods and Services Tax Act, 2017.
The petitioners installed three additional packing machines in their factory, which became fully installed and operational on 20.03.2026. The petitioners contended that since the machines did not exist in the factory before 20.03.2026, cess could not be levied for the period from 01.03.2026 to 19.03.2026.
The petitioners had deposited Rs.7,68,00,000/- as cess for the three machines for the entire month of March 2026. According to the petitioners, cess payable proportionately for the period from 20.03.2026 to 31.03.2026 was Rs.2,97,29,033/- and the excess amount of Rs.4,70,70,967/- was liable to be refunded through abatement.
The Assistant Commissioner rejected the abatement application on 22.04.2026, holding that Rule 15 of the Rules applied only where already installed machines were subsequently sealed and rendered non-operational. The authority observed that the petitioners’ case related to installation of new machines during the month and was covered by Rule 12(4), which required consideration of the maximum number of machines installed on any day during the month for calculation of cess.
