Cenvat credit on imported raw sugar cess upheld; interest and penalty fell once credit was allowed.

Cenvat credit of Sugar Cess, Education Cess and Secondary and Higher Education Cess paid on imported raw sugar was held allowable because the dispute was covered by the assessee's earlier decision on the identical issue. That prior ruling had been upheld by the High Court and was operating without any stay, so it governed the subsequent case on the same facts. Once the credit was found admissible, the consequential demand of interest and penalty could not survive. The assessee was therefore entitled to avail and utilise the Cenvat credit, and the related interest and penalty were unsustainable.

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Issues: Whether Cenvat credit of Sugar Cess, Education Cess and Secondary and Higher Education Cess paid on raw sugar imported by the assessee was admissible, and whether interest and penalty could survive if such credit was admissible.

Analysis: The dispute was held to be covered by the assessee's own earlier case, in which credit of Sugar Cess and allied cesses paid on raw sugar had been allowed. That decision had been upheld by the High Court, and no stay was operating against it. On the same facts and issue, the earlier decision was treated as applicable, and the credit was held to be allowable. Once the credit was found admissible, the demand of interest and the penalty could not stand.

Conclusion: The assessee was entitled to avail and utilize the Cenvat credit, and the demand of interest and penalty was unsustainable.

Ratio Decidendi: Where a prior decision on the identical issue has been upheld and is operating without stay, it governs the subsequent case on the same facts, and admissible credit cannot be denied along with consequential interest and penalty.

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