2023 (10) TMI 589 - AT - Central Excise

Appeal successful: Appellant eligible for Sugar Cess credit, interest and penalty set aside.

Shree Renuka Sugars Ltd. Versus Commr. of CGST & Central Excise, Haldia Commissionerate

The Tribunal allowed the appeal filed by the Appellant, holding that they are eligible for availing and utilizing the credit of Sugar Cess paid on raw ... Availability of the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar imported by the Appellant - HELD THAT:- The issue is no more res integra, as in their own case, the CESTAT Chennai, as reported in [2007 (8) TMI 147 - CESTAT, BANGALORE], has allowed the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar. The department has challenged the validity of the said order before the Hon'ble Karnataka High Court and the Hon'ble High Court has upheld the said order of the Tribunal, as reported in [2014 (1) TMI 1469 - KARNATAKA HIGH COURT]. There is no stay available against the order passed by the Hon'ble Karnataka High Court and hence it is held that the ratio of the said decision is squarely applicable to the present case on hand as the facts of this case are the same as that of the order passed by the Hon'ble Karnataka High Court. Thus, by following the above cited decision of the Hon'ble Karnataka High Court, the Appellant are eligible for availing and utilizing the credit of Sugar Cess (and Ed.Cess and SHE Cess) paid on raw sugar imported by them. Since, the credit is admissible, there is no question of demanding interest or imposing penalty on the Appellant. The impugned order set aside - appeal allowed. Issues involved: Availability of Cenvat credit of Sugar Cess, Ed.Cess, and SHE Cess paid on raw sugar imported by the Appellant.Summary:Issue 1: Disallowance of Cenvat credit and imposition of penaltyThe Appellant filed an appeal against the order disallowing Cenvat credit of Rs.22,38,85,048/- availed by them, along with a demand for interest and penalty under Rule 15(2) of Cenvat Credit Rules 2004. The department contended that Sugar Cess is not covered under Rule 3(1) of the Cenvat Credit Rules, 2004. The Appellant argued that a similar issue was decided in their favor by the CESTAT Chennai and upheld by the Karnataka High Court. The Tribunal held that the Appellant is eligible for availing and utilizing the credit of Sugar Cess paid on raw sugar, following the decision of the Karnataka High Court, and set aside the demand for interest and penalty.Issue 2: Challenge to the validity of the decisionThe department had filed an appeal against the decision of the Karnataka High Court before the Supreme Court, which was pending. However, there was no stay available against the Karnataka High Court's decision. The Tribunal found that the facts of the present case were similar to the Karnataka High Court's decision, and hence, the Appellant was entitled to avail the credit of Sugar Cess paid on raw sugar. The Tribunal allowed the appeal filed by the Appellant and set aside the impugned order.