Clean energy cess exemption for washed coal bars a second levy where cess was already paid on raw coal.

Clean energy cess was payable on raw coal removed from the mine, and where cess had already been paid on the gross quantity of raw coal, Notification No. 4/2010-C.E. exempted clean coal cleared from the washery from a second levy. The demand under Section 11D of the Central Excise Act, 1994 could survive only on proof that excess cess had been collected from customers; the record did not establish such collection, and the amounts were treated as price adjustments under MOUs. Accordingly, no further cess was payable and the Section 11D demand with interest under Section 11DD was unsustainable.

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Issues: Whether clean energy cess was payable again on clean coal cleared from the washery after cess had already been paid on raw coal removed from the mines, and whether the demand under Section 11D of the Central Excise Act, 1994 with interest under Section 11DD was sustainable.

Analysis: Clean energy cess under Rule 6(1) of the Clean Energy Cess Rules, 2010 is payable on raw coal removed from the mine. The appellant had already paid cess on the gross quantity of raw coal extracted and removed from the mines. Notification No. 4/2010-C.E. dated 22.06.2010 exempts coal products from clean energy cess where the applicable cess has already been paid at the stage of raw coal from which such goods are produced. The clearance of clean coal from the washery was therefore covered by the exemption. The demand under Section 11D could be sustained only if it was established that the appellant had collected excess cess from customers over and above the cess already paid on raw coal. The record did not establish such excess collection, and the differential amounts were explained as price adjustments under MOUs, not as cess.

Conclusion: No further clean energy cess was payable on clean coal cleared from the washery, and the demand under Section 11D of the Central Excise Act, 1994 along with interest under Section 11DD was unsustainable.

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