TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 331
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....vat Credit in respect of "Cess on Sugar" in their Cenvat Credit account, and have utilized the same for payment of "Cess on Sugar" on their finished goods viz. Sugar cleared for domestic clearance. 2.1 The said availment of Cenvat Credit on Sugar Cess appeared to the department as irregular since it was not specified in Rule 3 of Cenvat Credit Rules, 2004. Thus, it was not a specified duty on which the Cenvat Credit can be availed. Sugar Cess Act, 1982 was enacted to provide for the imposition of 'Cess on Sugar' for the development of sugar industries. Sugar Cess is levied under Section 3 of the Sugar Cess Act, 1982. Section 3 and 4 of the said Act show that Sugar Cess is described as duty of Excise only for the sake of administrative convenience for the limited purpose of levy and collection of the Cess in the said Act. CBEC vide its letter dated 10th August, 2024 clarified that Education Cess is to be calculated on the aggregate duties of Excise / Customs (excluding certain duties of Customs like Anti-Dumping Duty, safeguard etc. levied and collected by the Department of Revenue) and only such duties which are levied and collected as duties of Excise / Customs and are both levie....
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....econdary and Higher Education Cess leviable thereon or otherwise? (b) If the noticee is not eligible for the Cenvat Credit, whether the said amount of wrongly availed Cenvat credit can be recovered along with interest? (c) Whether the penalty under Rule 15 (1) of Cenvat Credit Rules, 2004 read with section 11 AC of the Central Excise Act, 1944 can be imposed upon the noticee? 2.5 The learned adjudicating authority, the Commissioner concluded regarding the first issue that Rule 3 of Cenvat Credit Rules, 2004 clearly stipulates the duties of Excise, leviable under different statutory provisions which will be available to the manufacturer to take Cenvat Credit. The 'Sugar Cess' under reference has been levied under the provisions of Sugar Cess Act, 1982 and the same is not appearing in Rule 3 (1) of Cenvat Credit Rules, 2004 and therefore, Cenvat Credit of Sugar Cess is not admissible. 2.6 As far as, the second issue is concerned, the Adjudicating Authority, the Commissioner, concluded that in Sahkari Khand Udhyog Mandali Limited -2011 (263) ELT 34 (Guj.), Hon'ble High Court of Gujarat at Ahmedabad held that it cannot be inferred or stated that the 'Sugar Cess' imposed under the....
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....ight of recent judgment of Hon'ble Supreme Court in Unicorn Industries vs. Union of India - 2019 (370) ELT 3 (SC). Aggrieved by the final order of this Tribunal dated 07.02.2023, the appellant preferred Special Civil Application bearing No. 6897 of 2023 before Hon'ble Gujarat High Court. The Hon'ble Gujarat High Court, after hearing both the parties, remanded the matter back to this Tribunal for reconsideration. 4. Shri Rahul Patil, Constituent Attorney and Authorised Signatory representing the appellant submitted that in the order dated 07.02.2023, the Division Bench of this Tribunal has held in this appeal that there is no specific mention of Sugar Cess and Education Cess paid under Rule 3 of Cenvat Credit Rules, 2004. However, the Hon'ble Karnataka High Court decided the matter in favour of the assessee. On perusal of the said judgment, it is observed that the Cenvat credit was allowed on the ground that Sugar Cess is nothing but duty of excise on the ground that levy of such Cess is under Levy and Collection of Sugar Cess under Central Excise Act, 1944. However, the Hon'ble Supreme Court in the recent judgment of Unicorn Industries vs. Union of India - 2019....
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....5) ELT 17 (Raj.) (b) Hindustan Coca Cola Beverages Pvt. Limited (Tri. Del.) (c) Shivashakti Nutrifoods Pvt. Limited vs. CCE (Tr. Bang.) (in Appeal No. E/338/2020) (d) Bengal Beverages Pvt. Limited vs. CCE, Howrah - 2022 (381) ELT 84 (Tri. Kol.) 4.4 The learned AR for the appellant also submitted that availment of Cenvat credit on Sugar Cess portion is no more res-integra and has been settled in favour of the appellant. He cited following decided cases in which a similar view has been taken by Hon'ble Supreme Court, Hon'ble Karnataka High Court, Hon'ble Gujarat High Court, Hon'ble Rajasthan High Court, CESTAT Ahmedabad and CESTAT, Principal Bench, New Delhi :- (a) Barnagore Jute Factory Company - 1992 (57) ELT 3 (SC) (b) Commissioner vs. R.A. Shaikh Paper Mills Pvt. Limited - 2008 (228) ELT 59 (Tri. Ahmd.) (c) TVS Motor Company Limited - 2013 (295) ELT 42 (Kar.) & 2015 (323) ELT 57 (Kar.) (d) Commissioner vs. Shree Renuka Sugars Limited - 2014 (302) ELT 33 Kar.) (e) Vareli Textile Industries Limited vs. UOI - 1997 (91) ELT 279 (Guj.) (f) T.T.K-LIG Limited vs. Commissioner of Customs - 2006 (193) ELT 169 (Tri. LB) (g) UOI vs. Cairn Energy India Pv....
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....he Appellant. 4.7 Learned AR for the appellant prayed that the appeal may be allowed and the impugned order passed by learned Commissioner may be set-aside. 5. Shri Mihir G Rayka, learned Addl. Commissioner (AR) for the department reiterated the impugned order passed by learned Commissioner. He placed reliance on the decision in Commissioner vs. Sahakari Khand Udyog Mandli Limited - 2011 (263) ELT 34 (Guj.). 6. After hearing the learned Authorised Representative of the appellant and learned AR for the department, we are of the view that facts of this case are covered by the decision of Division Bench of this Tribunal pronounced in appellant's own case in Excise Appeal No. 13979 of 2014-DB Shree Renuka Sugars Limited vs. CCE & ST, Rajkot in which this Tribunal has held that in view of the Hon'ble Karnataka High Court judgment in favour of the appellant Shree Renuka Sugars Limited - 2014 (302) ELT 33 (Kar.), the issue is no longer res-integra. Accordingly, the appellant is legally entitled for the Cenvat credit on the Sugar Cess paid on import of raw sugar. Accordingly, the impugned order was set-aside and the appeal was allowed. 7. We have gone through the final order No. A/....
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....at 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, 1982, a duty of excise on all sugar produced by any sugar factory in India. Therefore, the Cess leviable and collected is 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. --------------------------------------------- 40. In the instant case, it is not in dispute that this duty of excise is not collected as a Cess at the time of production of the sugar in the assessee's sugar factory in India It is not also in dispu....