2020 (4) TMI 840 - AT - Customs

Refund of sugar cess paid on raw sugar imported - rejection on the ground that N/N. S.O. 102 (E) dt. 07.02.2009 exempting levy of CESS on sugar is not applicable to the refund claim of the appellant and also that since the respondents have not challenged the assessment they are not eligible for refund - Whether decision in the case of PRIYA BLUE INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) 2004 (9) TMI 105 - SUPREME COURT and ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT would apply to the facts of this case? - HELD THAT - It is not disputed that the respondents have paid the cess at the time of filing the Bill of Entry under protest. The marking of protest itself gives information to the department that there is requirement for re-assessment. Assessment under Section 17 of Customs Act, 1962 cannot be said to be finalized when respondent has marked the protest while paying duty. In case, respondents had paid the entire duty without any mark of protest, in order to claim refund they have to request for reassessment of Bill of Entry. The mark of protest is an information to the department that the respondent is not making payment of cess voluntarily and then department has to initiate proceedings to vacate protest and pass speaking order for reassessment. If the department fails to do so the respondents cannot be put to any disadvantage of rejecting the refund claim - refund cannot be denied on this ground. Whether cess paid by the respondent is eligible for refund? - HELD THAT - The Board has clarified in a letter dt.10.08.2004 that cess is not a duty of excise. Though there may be decisions in which it is held that sugar cess is also duty of excise, the circular issued by the Board is binding on the department - Therefore the decision placed before us by the Ld.A.R contending that sugar cess is also duty of excise and therefore payable by the respondent does not find favour. There are no grounds to interfere with the reasoned order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility for refund of sugar cess paid on imported raw sugar.
2. Applicability of Priya Blue Industries Ltd. VS CC (Preventive) and ITC Ltd. Vs CCE Kolkata judgments.
3. Whether the sugar cess paid by the respondent is eligible for refund.

Issue 1:
The case involved a dispute regarding the eligibility for a refund of sugar cess paid on imported raw sugar by the respondents, who are sugar manufacturers. The original authority rejected the refund claim, stating that the exemption notification does not apply to the appellant's claim and that since the assessment was not challenged, they were not eligible for a refund. The Commissioner (Appeals) later held that the appellants were indeed eligible for a refund, leading to this appeal.

Issue 2:
The department argued that sugar cess is collected on imported raw sugar as part of additional customs duty, equivalent to Central Excise duty. They contended that there were no statutory provisions exempting sugar cess on imported sugar during that period. The department further cited judgments related to reassessment requests and finalized assessments, asserting that the refund claim was not sustainable.

Issue 3:
The respondent argued that they paid sugar cess under protest on imported raw sugar, which was used to manufacture sugar and subjected to Central Excise duty. They highlighted that the department did not initiate proceedings despite the protest during payment. The respondent contended that sugar cess is not payable on imported sugar, citing relevant tribunal cases and a CBEC letter. The Commissioner (Appeals) agreed with this argument, emphasizing that the sugar cess is not a duty of excise, as clarified by the Board in a letter. The Tribunal upheld the Commissioner's decision, dismissing the department's appeal for lacking merit.

In conclusion, the judgment addressed the eligibility for a refund of sugar cess paid on imported raw sugar, considering arguments related to statutory provisions, reassessment requests, and the nature of sugar cess as a duty of excise. The Tribunal ultimately upheld the Commissioner (Appeals) decision, ruling in favor of the respondents and dismissing the department's appeal.