Clean Energy Cess on closing stock of coal on 30 June 2017 denied after retrospective amendment clarified cess applicability on post July removals.

A retrospective amendment to Notification No. 12/2017-CE treated goods manufactured on or before 30 June 2017 but cleared on or after 1 July 2017 as subject to applicable central, State and GST compensation cess, making GST compensation cess at Rs.400 per tonne payable on removals after 1 July 2017. Revenue accepted the amendment and the appellant conceded payment of compensation cess on post 1 July removals; consequently the demand for Clean Energy Cess on closing coal stock held on 30 June 2017 was set aside and the appellant relieved of that liability.

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Issues: Whether the appellant was liable to pay Clean Energy Cess at Rs. 400 per tonne on the closing stock of coal held on 30th June, 2017 in view of Notification No. 12/2017-CE dated 30th June, 2017 as amended with retrospective effect.

Analysis: Notification No. 12/2017-CE dated 30th June, 2017 was amended with retrospective effect to add clauses specifying goods manufactured on or before 30th June, 2017 but not cleared before 1st July, 2017, and to provide that applicable central, State, Union Territory taxes and goods and services tax compensation cess shall be payable if cleared on or after 1st July, 2017 under the relevant GST enactments. The amendment was accepted by the Revenue and the appellant admitted that, from 1st July, 2017, GST compensation cess at Rs. 400 per tonne was being paid on removals, satisfying the conditions of the amended notification.

Conclusion: The demand for Clean Energy Cess on the closing stock of coal held on 30th June, 2017 is set aside and the appeal is allowed; the appellant is not required to pay the Clean Energy Cess on that closing stock.

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