2023 (7) TMI 297 - AT - Central Excise

Recovery of excess collection of Clean Energy Cess against sale of Clean Coal as per presumptive calculation - Section 11D of the Central Excise Act 1994 - HELD THAT - The basis of calculation of differential Clean Energy Cess Rate @ Rs. 73.27 per MT on Clean Coal in the impugned order is only on the basis of a presumption that this amount collected separately was on account of Clean Energy Cess. The Appellant has clearly established that the amount collected was on account of differential rate arrived at due to late signing of MOUs. In the impugned order the demand has been confirmed under Section 11D of the Central Excise Act 1994. As per Section 11D any amount collected as duty is to be deposited in the Government Account. In the present case the Appellant has already paid Clean Energy Cess amounting to Rs. 14, 76, 04, 018 on the gross extracted quantity of raw coal of 29, 50, 080 MT during the period July 2010 to March 2013 at the time of removal of the same from the mines. They are entitled to collect this amount from the customers. Provisions of Section 11D would be attracted only when it is established that the Appellant has collected more than Rs 14, 76, 04, 018/- as Clean Energy Cess from the customers - the investigation has not established any such excess collection by the Appellant over and above the amount of Rs 14, 76, 04, 018/- of Clean Energy Cess already paid by the Appellant. The Appellant has paid Clean Energy Cess @ Rs 50 per MT on the quantity of raw coal of 29, 50, 080 MT amounting to Rs.14, 76, 04, 018. After processing in the Washery the Clean Energy Cess is chargeable only on the Clean Coal as there is no Clean Energy Cess on the other products emerge in the Washery. Thus the Appellant has to collect the amount of Rs 14, 76, 04, 018/- paid on 29, 50, 080 MT of raw coal from 16, 78, 729 MT of Clean Coal cleared from the Washery - it is observed that the Clean Energy Cess collected by the Appellant from their customers was much less than the amount of Clean Energy Cess actually paid by them on the raw coal. The demands confirmed in the impugned order under Section 11D of the Central Excise Act 1994 is not sustainable. Accordingly the demand of interest under Section 11DD is also not sustainable - Appeal allowed.

Summary

Issues:
The issues involved in this case are the payment of Clean Energy Cess by the Appellant on the extraction of Raw Coal, the alleged excess collection of Clean Energy Cess from customers, and the demand made under Section 11D of the Central Excise Act 1994.

Payment of Clean Energy Cess:
The Appellant, a subsidiary of Coal India Ltd, paid Clean Energy Cess at the rate of Rs. 50 per MT on the gross extracted quantity of 29,50,080 MT of Raw Coal from July 2010 to March 2013, as required by Rule 6(1) of Clean Energy Cess Rules 2010. They submitted monthly returns and Form I for clearance of goods liable for Clean Energy Cess.

Alleged Excess Collection of Clean Energy Cess:
A Show Cause Notice was issued to the Appellant, alleging excess collection of Rs. 12,30,00,478 as Clean Energy Cess from customers. The demand was made under Section 11D of the Central Excise Act 1994, and interest was also demanded. The Appellant contended that they had already paid the required Clean Energy Cess on the raw coal extracted and dispatched to the Washery plant, and the Clean Coal cleared from the Washery was exempt from Clean Energy Cess as per Notification 4/2010.

Judgment:
The Appellate Tribunal observed that the Appellant had paid the Clean Energy Cess on the raw coal extracted from the mines, as required by Rule 6(1) of Clean Energy Cess Rules 2010. They also noted that Notification 4/2010 exempts Clean Energy Cess on Clean Coal if paid at the stage of raw coal extraction. The Appellant had cleared the Clean Coal to Public Sector Undertakings, and the final selling rate was determined after ministerial level discussions. The Tribunal found that the demand made under Section 11D was not sustainable as the Appellant had not collected excess Clean Energy Cess from customers. Therefore, the impugned order was set aside, and the appeal filed by the Appellant was allowed.