Cenvat Credit on Sugar Cess Order Quashed; Case Remanded for Fresh Tribunal Consideration Under Sugar Cess Act

The Gujarat High Court, exercising jurisdiction under Articles 226 and 227 of the Constitution, entertained a petition challenging the Appellate Tribunal's final order No. A/10223/2023 dated 7.2.2023. The petitioner sought issuance of a writ of certiorari to quash the impugned order, a writ of mandamus declaring entitlement to Cenvat credit on sugar cess under the Sugar Cess Act, 1982, and interim relief staying the order's execution. Counsel for the petitioner submitted that the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) had issued contradictory orders regarding the petitioner's entitlement to Cenvat credit on sugar cess. The impugned order remanded the matter to the adjudicating authority to determine whether sugar cess falls within the Central Excise Act, relying on the Supreme Court's decision in Unicorn Industries vs. Union of India (2019 (370) E.L.T. 3 (S.C)). However, an earlier CESTAT order dated 28.06.2023, following the Karnataka High Court's ruling, had allowed the petitioner Cenvat credit treating sugar cess as excise duty. The High Court noted the contradictory nature of the Tribunal's orders and, without delving into the merits, quashed and set aside the impugned order. The matter was remanded to the Tribunal for reconsideration. The petition was disposed of, and notice was discharged.