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2024 (6) TMI 756
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....the appellant was engaged in the manufacture of Boora, falling under chapter sub-heading 1701.99 and Batasha, Mishri& Makhana, falling under Chapter Sub-Heading 1704.90 of Central Excise Tariff Act, 1985. The department noted that the activity of manufacturing of Batasha, Mishri& Makhana amounted to 'manufacture' as defined under Section 2(f) of the Central Excise Act, 1944, and the appellant had cleared these goods, valued at Rs. 66,42,83,255/- during the period 01.08.2003 to 31.03.2008 under Rule 11 of Central Excise Rules, 2002 without payment of duty amounting to Rs. 2,35,91,7741-. It was also noted that the appellant was not registered under Central Excise. 2.1 A show cause notice dated 26.08.2008 was issued charging the appellant with manufacturing the excisable goods without having Central Excise registration and suppressing the production valued at Rs. 66,42,83,255/- during the year 2003-2004 to 2007-08 (upto August, 2007) and clearing the same without payment of appropriate duty amounting to Rs. 4.21,92,338/- (BED Rs. 3,51,20,425/- AED Rs. 34,01,915/+ Sugar Cess Rs. 27,53,304/- + Edu. Cess Rs. 7,82,211/- + SHE Cess Rs. 1,28,483/-). The said show cause notice was....
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....e denial of Cenvat credit in respect of sugar purchased during the relevant period 01.08.2007 to 30.06.2008 and used in the manufacture of final products held liable to levy of Central Excise duty, and denial of Cenvat credit amounting in respect of opening stock of sugar as on 01.08.2007, the date from which the duty liability has been determined, the present appeal is before this Tribunal. 3. The Revenue has also filed an appeal against the impugned Order-in-Original dated 20.09.2022 on the following grounds:- (a) Whether the Adjudicating Authority has erred in appreciating that the issue of eligibility of Sugar Cess as CENVAT credit in terms of CENVAT Credit Rules 2004, has yet to attain finality in view of pendency of Civil Appeal No. 1531/2016 filed by the Revenue in the case of Commissioner v. Shree Renuka Sugars Ltd. 2016 (335) ELT A77 (SC). (b) Whether the Adjudicating Authority had erred in allowing CENVAT Credit of Sugar Cess amounting to Rs. 8,94,760/- to determine net duty liability of the Noticee in spite of the legal position defined under Rule 3 (1) of the CENVAT Credit Rules 2004, in which Sugar Cess has not been specified as eligible duty/levy for availmen....
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....se receipts of duty paid sugar duly certified by a Chartered Accountant. In support of his submissions, the learned counsel relied upon the following circular and decisions:- (i) CBIC Instruction F. No. 390/Misc./116/2017-JC dated 22.08.2019 (ii) Commissioner of Central Excise, Customs & Service tax, Belgaum vs. Shree Renuka Sugars Ltd. 2014 (302) ELT 33 (Kar.) (iii) Tvs Motors Co. Ltd. Vs. Union of India 2015 (323) ELT 57 (Kar.) (iv) BanswaraSyntex Ltd. Vs. Union of India 2007 (216) ELT 16 (Kar.) (v) Bengal Beverages Private Limited vs. Commissioner of CGST, Central Excise, Howrah 2022 (381) ELT 84 (Tri.-Kolkata) (vi.) Union of India vs. Kamlakshi Finance Corporation Limited 1991 (55) ELT 433 (S.C.) Accordingly, the learned Counsel prayed for setting aside the impugned order and allowing the appeal. 5. Per contra, Learned Authorized Representative for the Revenue submitted that the adjudicating authority has allowed Cenvat credit of Rs. 45,43,667/- only in cases where original invoices had been submitted by the appellant. Rule 9 of Cenvat Credit Rules, 2004 specifies the documents and accounts for the purpose of availment....
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....xcise & Service Tax, Tirupati vide Final Order No. A/30684-30692/2019 dated 16.07.2019 (Tri.-Hyd.) (iv) M/s ACC Limited vs. Commissioner of CGST, Central Excise - Jabalpur Vide Final Order No. 50793/2019 dated 24.06.2019 Learned Authorized Representative for the Revenue prayed for dismissing the appeal of the assessee and allowing the appeal of the Revenue. 6. On the other hand, the Learned Counsel for the Respondent (in Appeal No. 54723 of 2023) has submitted that the departmental appeal is liable to be dismissed being not maintainable on the ground of revenue limit as the present appeal filed by the Department involves revenue of Rs. 8,94,760/ which is well below the threshold monetary limit of Rs. 50.00 lacs for filing appeal by the revenue before the CESTAT, as prescribed vide CBIC Instruction F. No. 390/Misc/116/2017-JC dated 22.08.2019. He submitted that the departmental appeal to deny Cenvat credit of sugar cess in the present case solely on the ground that the issue has not attained finality in view of the pendency of Civil Appeal No. 1531/2016 filed by the Revenue before the Supreme Court challenging the judgement of Hon'ble Karnataka High Court in the m....
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....s of the ld. counsel, we reproduce the table given by the ld. Counsel, hereinafter TABLE-A- Quantity (in quintals) of duty paid Input (sugar) received, and Cenvat credit admissible (In Rs.) As per submissions in adj proceedings for the period 29.08.2007 to 30.06.2008 As per the OIO-20.09.2022 for the period 01.08.2007 to 30.06.2008 BOORA MAKHANA MISHRI Total BOORA MAKHANA MISHRI Total 1 2 3 4 5 6 7 8 Aug/07 280 220 152 652 21916.67 19181.33 13594 54692 Sep/07 2910 2200 1665 6775 Oct/07 3075 2198 1590 6863 Nov/07 3010 2210 1700 6920 Dec/07 2320 2212 1550 6082 Jan/08 2050 2240 1490 5780 Feb/08 1825 2170 1550 5545 Mar/08 2525 2209 1776 6510 Sub- total-I 17995 15659 11473 45127 21916.67 19181.33 13594 54692 Apr/08 12115 6421 6718 252....
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....HE Cess@ 1% GRAND TOTAL DUTY 1. Boora 32875.00 21916.67 12115.00 34031.67 2416248 48325 24162 2488736 2. Makhana 28772.00 19181.33 6421.00 25602.33 1817766 36355 18178 1872299 3. Mishri 20391.00 13594.00 3718.00 20312.00 1442152 28843 14422 1485417 Total 82038.00 54692.00 25254.00 79946.00 5676166 113523 56762 5846451 We are unable to appreciate this methodology adopted by the adjudicating authority to calculate the clearances during this period when the actual data of clearances was available with the Commissioner. We have also examined CA Certificate wherein the monthly production & clearances figures for the period 01.08.2007 to 30.06.2008 has been certified by the Chartered Accountant. The department had not led any evidence to hold that this CA Certificate was incorrect or fraudulent. 7.2. In view of the above, we are of the opinion that the Commissioner has erred in determining the duty resulting of excess duty liability of Rs. 2,67,656/-. Accordingly, we hold that the total duty determined is liable to be reduced by this amoun....
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.... 61759 4516436 864626 5381062 49950 3648919 894760 4543679 As per actual/CA certificate for the period 01.08.2007 to 30.06.2008 Difference between figures as per the OIO and actual as per the appellant for the period 01.08.2007 to 30.06.2008 Qty (Qtl) BED+Cess Sugar Cess Total Credit Qty (Qtl) BED+Cess Sugar Cess Total Credit 9 10 11 12 13(9-5) 14(10-6) 15(11-7) 16(12-8) Op. Stock 8389 613488 117446 730934 8389 613488 117446 730934 Aug/07 57790 4250454 809060 5059514 7840 601535 -85700 523675 Sep/07 Oct/07 Nov/07 Dec/07 Jan/08 Feb/08 Mar/08 Apr/08 May/08 Jun/08 G. Total 61759 4863942 926506 5790448 16229 1215023 31746 1254609 8.1 We note that Rule 9 of Cenvat Credit Rules, 2004 specifies the documents and records for the purpose of availment of credit. In some cases, it is noted that the appellant only had photocopies of the purchase invo....
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....hich duty is held payable on clearances of excisable goods cannot be allowed." The reasoning given by the adjudicating authority cannot be accepted. It is on record that the appellant had opening stock of 8389 quintals of sugar as on 01.08.2007. Subsequently, 8389 quintals of sugar was used in the manufacture of the final products. The appellant has submitted a copy of the CA's certificate in this regard. We note that the said certificate clearly states that the verification is based on the books of accounts manufactured by the appellant. The Commissioner has not led any evidence to establish that the said certificate is incorrect. We also note that the appellant had submitted a Chartered Accountant's certificate to certify the production quantity of sugar for the relevant period, as well as the availability of Cenvat credit. The department has denied the credit by not giving any sound reasoning for the denial. There is nothing on record to establish that the CA certificate produced by the appellant is fraudulent or incorrect. We further find that the appellant has led sufficient and cogent evidences in the form of Chartered Accountant's certificate, copies of their balance shee....
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....ll be credited to the Consolidated Fund of India. Sub-section (2) of Section 3 of the Sugar Development Fund Act, 1982, provides that the amount so credited, shall after due appropriation made by Parliament by law be credited to the Sugar Development Fund. Thus the cess collected under the Act invariably goes to the Consolidated Fund, which ultimately is utilized for all public purposes. Therefore, there is no quid pro quo between the cess levied and collected and the services rendered for such payment. On the contrary, the proceeds are credited to the Consolidated Fund of India which is meant to be utilized for all public purposes, may be including the purpose contemplated under the Sugar Development Fund Act, 1982. In the light of the aforesaid statutory provisions, the cess imposed under the Act is a duty of excise or a tax. The contention that it is a fee and the assessee is not entitled to Cenvat credit has no substance. Therefore, the sugar cess paid under the Act is tax, and to be precise it is Duty of Excise and not Fee. 28. Insofar as the contention that, to be eligible for Cenvat credit, is it necessary that the Act should have been mentioned in Rule 3 of the Cen....
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....hall be construed to include a reference to Cenvat, i.e., Central Value Added Tax. 33. Rule 3 of the Cenvat Credit Rules provides that a manufacturer or producer of a final product shall be allowed to take credit of the duty of excise. Therefore, once a duty of excise is paid, the manufacturer or producer of the final product is entitled to take Cenvat credit. The reference to the Tariff Act is for the purpose of calculating the rate at which such a duty of excise is payable. But once it is established that what is paid is excise duty or in other words a tax and then under Rule 3, the assessee is entitled to the Cenvat credit. ............................................................................................................... 38. Section 3 of the Act provides for levy and collection as a cess for the purpose of Sugar Development Fund Act, 1 982, a duty of excise on all sugar produced by any sugar factory in India. Therefore, the cess leviable and collected is at the stage of production of sugar in the sugar factory. Because it is a tax on production, it is described as a duty of excise. 41. Therefore, in the light of the above....
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....lly a different subject matter in our view. 10. Also, in a similar matter, this Bench in the case of Diamond Beverages Private Limited vide Final Order No. 76356/2019, dated 7-8-2019 has allowed the Cenvat credit of sugar cess. 11. We find from the case records that the First Appellate Authority has rejected the part claim of Cenvat credit on the ground that a demand for recovery of such amount for the period August, 2014 to June, 2015 is pending adjudication by the Learned Commissioner. We find that the issue in the said demand notice also relates to eligibility of Cenvat credit on sugar cess and when the same has already been decided in favour of the appellant assessee, then the earlier demand notices become infructuous and cannot be sustained in the eyes of law. Further for the same period on the same issue, two demand notices cannot be sustained and hence we are of the view that the order of the Learned First Appellate Authority needs to be modified to the above extent. Also, Instruction F. No. 201/01/2014-CX.6, dated 26-6-2014 issued by the CBIC as regards "Instructions regarding need to follow Judicial discipline in adjudication proceedings" wherein it was s....