Exported sugar exempt from sugar cess; demand, interest and penalty could not be sustained.

Sugar cess was not payable on sugar actually exported out of India because the relevant notifications and circulars exempted export clearances. The Tribunal relied on the Ministry of Food notification, the CBIC circular, and its earlier decision on the same issue to hold that the levy did not survive for exported sugar. The demand, interest, and penalty could not be sustained.

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Issues: Whether sugar cess is payable on sugar exported out of India.

Analysis: The Tribunal noted that the relevant notifications and circulars exempted sugar cess on sugar exported out of India. It found that the statutory and tariff materials, including the notification issued by the Ministry of Food and the CBIC circular, supported exemption for export clearances. The Tribunal also followed its earlier decision on the same issue and held that the levy does not survive in respect of sugar actually exported out of India.

Conclusion: Sugar cess was not payable on the exported quantity of sugar, and the demand, interest, and penalty could not be sustained.

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