TaxTMI 
TaxTMI 
2018 (7) TMI 325
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....input raw material for manufacture of beverage, was used by the Appellant in the manufacture of the excisable goods and at that time they took Cenvat Credit of CVD comprising of Basic Excise Duty. No Cenvat on Sugar Cess was available at that time. 3. The Hon'ble High Court of Karnataka in the matter of CCE vs. Shree Renuka Sugar Ltd.; reported in 2014(302) ELT 33 (Kar.) vide order dated 6.8.2013 has held that Sugar Cess is duty of Excise and not fee and once the payment of duty is established, the assessee is entitled to take Cenvat Credit under Rule 3 of the Cenvat Credit Rules. Therefore in terms of the decision of the Hon'ble High Court in Shree Renuka Sugar Ltd. (supra) the Appellant availed the Cenvat Credit of Sugar Cess amounting to Rs. 1,79,610/- in the month of July, 2014 and informed the same to the department on 21.11.2014. 4. According to the department, the Appellant had wrongly availed and utilized Cenvat Credit of Sugar Cess which was not covered under Rule 3(1) of CCR, 2004 and therefore a show cause notice dated 23.1.2015 as to why:- "(i) Cenvat credit amounting to Rs. 179610/- as Sugar Cess wrongly availed by them should not be recovered from them ....
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....s that sugar cess levied on all sugar produced by any sugar factory in India is a "duty of excise". He further submitted that Section 2A of the Central Excise Act expressly provides that unless the context otherwise requires, reference to expression "duty", "duties", "duty of excise" and "duties of excise" shall be construed to include reference to 'Central Value Added Tax (CENVAT)' and thus the duty of excise paid under Sugar Cess Act is also CENVAT. He has also submitted that the department has erred in relying upon the decision of Hon'ble Gujarat High Court in Commissioner Vs. Sahakari Khand Udyog Mandli Limited - 2010 (263) ELT 34 (Guj.) in as much as decision of Karnataka High Court in Shree Renuka Sugars Ltd. has come later in point of time and it is settled law that the later the better principle. Appellant relied upon the following: (i) Commissioner of Central Excise, Kol-IV Vs. Kusum Products Ltd. - 2012 (283) ELT 433 (Tri.-Kolkata); (ii) Commissioner of C. Ex., Ahmedabad-III Vs. Gujarat Ambuja Exports Ltd. - 2013 (297) ELT 577 (Tri.-Ahmd.); (iii) Pee Jay International Vs. Commissioner of Customs, Amritsar - 2014 (312) ELT 464 (Tri.-Del.); ....
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....c zones, which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff. 4. Crediting proceeds of duty to Consolidated Fund of India. The proceeds of the duty of excise levied under Section 3 shall be credited to the Consolidated Fund of India." xxx xxx xxx CENVAT Credit Rules, 2004 Rule 3. - (1) A manufacturer or producer of final products shall be allowed to take (1) credit (hereinafter referred to as the CENVAT credit) of, - (i) the duty of excise specified in the First Schedule to the Tariff Act, leviable under the Act; (ii) the duty of excise specified in the Second Schedule to the Tariff Act, leviable under the Act; (iii) the additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), (iv) ....
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....ugar under that Act. Therefore, although Sugar Cess has been levied under the provisions of Sugar Cess Act, the same has to be treated at par with the duty levied under Section 3(1) of the Customs Tariff Act, 1975. 8. There is no dispute that the appellant had imported sugar and had paid Additional Duty of Customs equivalent to Basic Excise Duty. Besides, CVD paid on importation of sugar, the appellant had also paid Sugar Cess and although the appellant had availed Cenvat credit of CVD but not on Sugar Cess. The issue involved in the matter is whether the appellant is entitled for Cenvat credit of Sugar Cess or not. According to me, the question whether sugar cess is a tax or fee, was specifically dealt with the Hon'ble High Court of Karnataka in the matter of Shree Renuka Sugar Ltd. (supra) in which it was held by the Hon'ble High Court that the sugar cess paid under the Sugar Cess Act is tax and to be precise it is duty of excise and not fee and therefore in view of it, the appellant is entitled for Cenvat credit of Sugar Cess. I have been informed by the Appellant that the Appeal filed by the department in the Hon'ble Supreme Court against the said order of the Hon'ble Karnat....
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...., they are goods manufactured in a scheduled industry. The fact that such yarn is captively consumed in the manufacture of jute textile is of no relevance. In fact, this question is concluded by the decision of this Court in J.K. Cotton Spinning & Weaving Mills v. Union of India, 1988 (1) SCR 700, a decision rendered under the Central Excises and Salt Act ........". 18. But the language of Rule 3 of Jute Cess Rules is altogether different. It indicates a continuing applicability of the provisions of the Central Excise Act and the Rules. What was levied was a 'duty of excise' and it was to be levied and collected in accordance with the provisions of the Central Excise Act and the Rules. The effect is as if the words "for the time being in force" were thereafter the words "the provisions of Central Excises and Salt Act, 1944 (1 of 1944) and the Rules made thereunder" in Rule 3. We are, therefore, of the opinion that the amendment of Rules 9 and 49 made in 1982 (with retrospective effect from 1944) is equally applicable in the matter of levy and collection of cess under the Act. The contentions urged by Sri Ganesan are accordingly rejected. In this view of the matter, it is n....