TaxTMI 
TaxTMI 
2026 (2) TMI 1333
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...., there were certain differences and they demanded CED or CEC, as the case may be, on the said differential quantity. The SCNs issued from time to time were adjudicated by the adjudicating authority, wherein, inter alia, it was held that the explanation given by the appellant explaining the difference in quantity in ER1 returns and CEC returns has not been satisfactory and hence, the explanation is not tenable. The demands for the period March, 2011 to June, 2015 were confirmed by way of different adjudication orders and the appellants are in appeal against the said orders except for SCN OR No.07/2013-Adjn (C.Ex)(Commr) dt.03.04.2013 for the period February, 2012 to November, 2012. 2. Similarly, the department has also come in appeal against the order of the Commissioner (Appeals) dt.31.07.2017, whereby, the order passed by the adjudicating authority dt.27.03.2017 confirming the demand was set aside by Commissioner (Appeals). 3. Learned Advocate for the appellant submitted that they are paying both Central CED and CEC on coal produced in their mines. He, however, submitted that while the levy of CEC, introduced vide Finance Act, 2010, inter alia, provides for levy and collect....
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....le the CEC is paid on the quantity of raw coal sent to the washery, the CED is paid on the quantity of washed coal, rejects and slurry, when cleared from the washery and sold to customers. Accordingly, because of this varied mode of clearances of coal and different statutory provisions governing the manner and time of payment of duty/cess, as also, due to certain exemptions available under statutory provisions or in terms of notifications for captive consumption, there could be difference in quantity reflected in the returns filed for a particular month for CEC and Central Excise. The differences are on account of the following reasons. a) CEC is paid on the quantity of raw coal sent to the washery, whereas, CED is paid on the quantity of washed coal removed. b) After washing, no further CEC is paid on the washed coal, however, CED is discharged and sometimes the rejects and slurry generated in a particular month may not always be sold in the same month and therefore, there will be differences in the quantity mentioned in these two returns. 6. Insofar as the appeal filed by the department, the appellants (respondents in this appeal) has submitted that the groun....
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....s been paid on the entire quantity of coal extracted from the mines at the time of removal, except to the extent sent to their captive power plant, whereas, the CED has not been paid at the time of their clearance from the mine to washeries and in fact, the same has been paid subsequently on washed coal as well as rejected and slurry in a staggered manner. Because of the manner of payment of CEC and CED, which is regulated in terms of different statutory provisions under which these two levy/duties of excise has been imposed, the time of payment of CED and quantity on which it is paid, varies. 11. Before we proceed further, we intend to examine the statutory provisions covering payment of CEC as well as CED on coal produced by the appellant. The authority to levy CEC is under section 83(3) of the Finance Act, 2010. This provision also makes it clear that the said cess is in addition to any other cess or duty leviable on good specified in tenth schedule under any other law. Therefore, the charging section for levy of CEC is section 83(3) and the payment of CEC is at the time of removal of coal from the mine. Further, Rule 2(g) of CEC Rules defines removal as 'dispatch of specifie....
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....reported in ER1 and CEC returns in line with their submission with regard to mode and manner as well as stage of payment of CEC and CED. We find that as far as reliance placed by the learned AR on the Tribunal's Final Order dt.24.06.2025, it is relevant only to the extent where admittedly the appellants have not contested the payment of cess, per se, on the captive consumption. This is apparent from para 9 of the said order. We find that the appellants have claimed the benefit of exemption notification No.67/95-CE dt.16.03.1995 for not paying CED for captive consumption. We find that this notification exempts excisable goods from whole of the duty of excise manufactured within factory and used within the factory for production in or in relation to manufacture of final product. We do not find this notification would be applicable for non-payment of CED on coal cleared for captive consumption to their power plant for various reasons including the fact that this notification is applicable to a factory and not to mines, as also the fact that coal is used for generation of power, which is not a dutiable good. Thus, the claim for the benefit of exemption under notification 67/95-CE is no....
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....ble at the time of removal from the mines. We also note that this definition is also consistent with the provision for payment of CEC, where also, the CEC is required to be paid at the time of removal from the mines. Thus, the CED and CEC, which are levied under different statutory provisions, are required to be discharged at the time of removal from the mines in the manner provided under respective statutory provisions. This would also require factual verification as to whether washeries are within mining area from where coal has been excavated or otherwise or there being any other exemption or provision to clear raw coal to washeries without payment of CED. There is no dispute that CEC is not being paid on raw coal cleared to washeries. However, in this case, we find that department has not made any adverse observation that they had not discharged any CED on the raw coal cleared for washing apparently because the washery could be within the mines and therefore, the clearance of coal is in the washed form as well as rejects and slurry has been taken as clearance from the mines, on which, admittedly, CED has been paid, though not at the time of moving the coal from the mines to the....