Cenvat credit on sugar cess embedded in countervailing duty is admissible where the levy is treated as excise duty.

Cenvat credit was held admissible on sugar cess paid as part of countervailing duty on import of raw sugar because the cess was treated in law as a duty of excise. The Tribunal relied on the assessee's earlier litigation and the statutory scheme to apply the Cenvat Credit Rules to the cess component when collected through CVD. On that basis, the cess fell within the credit mechanism, and the impugned order was set aside in favour of the assessee.

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Issues: Whether cenvat credit is admissible on sugar cess paid as part of countervailing duty on import of raw sugar.

Analysis: The issue was treated as covered by the appellant's own earlier litigation, where the relevant statutory scheme was examined and sugar cess was held to be a duty of excise. On that basis, the provisions governing cenvat credit were held applicable to the cess component when paid as CVD on import of raw sugar. The Tribunal accepted that the cess, though collected under the Sugar Cess Act, operates in the nature of excise duty and therefore falls within the credit mechanism under the Cenvat Credit Rules.

Conclusion: Cenvat credit on sugar cess paid as part of CVD on import of raw sugar is admissible, in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Where a levy is treated in law as a duty of excise and is paid as countervailing duty on import, credit is available under the cenvat scheme to the extent the relevant rules permit credit of excise duty.

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