2025 (10) TMI 259

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.... the CENVAT Credit and ordered for recovery of the same along with interest and also imposed penalty of equivalent amount. Hence, the appellant has filed the present appeal. 2. Heard Shri Devashish K Trivedi, learned Counsel for the appellant and Shri P. Ganesan, learned Superintendent (AR) for the Revenue. 3. The issue for consideration is whether the credit of sugar cess is available to the appellant who manufactures final product and pays duty of central excise thereon. 4. The learned Counsel for the appellant submits that the issue is no longer res-integra and has been decided by the Karnataka High Court in Commissioner of C Ex, Cus. & ST, Belgaum vs. Shree Renuka Sugars Limited - 2014 (302) ELT 33 (Kar.) which has been subsequ....

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....rt in Hingir Rampur Coal Company Limited vs. State of Orissa, State of West Bengal versus Kesoram Industries Limited & Ors - 1961 (2) SCR 537, the High Court, held that tax recovered by public authority invariably goes into the Consolidated Fund, which is ultimately utilized for all public purposes, whereas a Cess is levied by way of fee and is not intended to be and does not become a part of the Consolidated Fund. It is earmarked and set apart for the purpose of services for which it is levied. The High Court then considered the provisions of Article 266 of the Constitution of India, providing for the Consolidated Funds and Public Accounts of India and of the States. Referring to the various provisions of the CENVAT Credit Rules, the discu....

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....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." "38. Section 3 of the Act provides for levy and collection as a cess for the purpose of Sugar Development Fund Act, 1982, ....