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2024 (5) TMI 785 - AT - Central ExciseExemption of sugar cess under Notification No. 42/2001-CE (NT) dated 26.06.2001 for export of sugar - Department has raised the demand of sugar cess on the ground that the appellant cannot be escaped from the payment of sugar cess on export of sugar as the same is not covered under the Notification No. 42/2001-CE (NT) on the ground that the sugar cess is not an excise duty. HELD THAT - As per the Sugar Cess Act, 1982 the sugar cess is payable as per the provisions of sugar cess act which mandates that cess will be levied and collected as duty of excise on all sugar produced by any sugar factory in India. Sub- section 4 of the act also provides that provisions of Central Excise Act, 1944 and rules made thereunder including relating to refund and exemption shall apply in relation to levy and collection of the duty of excise under that - In view of the said provision it is clear that even though the sugar cess is levy under the Sugar Cess Act, 1982 by virtue of the provisions under sugar cess act, the sugar cess is considered as excise duty for all the purposes, therefore, even the exemption granted to excise duty under Central Excise notification shall apply mutandis- mutandis in respect of sugar cess also. The identical issue has been considered by the Larger Bench of this Tribunal in TTK. -LIG LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI/NEW DELHI 2005 (12) TMI 300 - CESTAT, NEW DELHI-LB wherein the identical levy of rubber cess in terms of Rubber Act, 1947, the larger bench has held that the mode adopted for collection of excise either from owner or state or from the manufacturer by whom the rubber is used will not change nature of excise duty which is levied as a cess. The sugar cess remains as excise duty notwithstanding the fact that it is levied as cess for purpose of Section 12 of Rubber Act, 1947. Applying the ratio of these judgments in the present case also, the Sugar Cess Act, 1982 is nothing but the duty of excise. Accordingly, the same treatment to the sugar cess as to the excise duty should be given. Hence, under the facts of the present case in view of the judgment in the case of export of goods by virtue of Notification No. 42/2001- CE (NT) the appellant is not liable to pay sugar cess. Moreover, as per Notification issued vide Circular No. 10/93 CX.08 dated 01.09.1993 in case of export of sugar, the sugar cess is exempted. The demands raised in the impugned order are not sustainable - Accordingly, the impugned order is set aside - Appeals are allowed.
Issues Involved:
The issue involved in the present appeals is whether the appellant is entitled to exemption of sugar cess under Notification No. 42/2001-CE (NT) dated 26.06.2001 for export of sugar. Exemption of Sugar Cess: The department contended that the appellant is liable to pay the sugar cess as it is not considered excise duty. However, the appellant argued that sugar cess is collected as excise duty and should be exempted for export of goods, citing relevant case law. The Tribunal analyzed the provisions of the Sugar Cess Act, 1982, which mandates that sugar cess is considered excise duty for all purposes. Therefore, the exemption granted to excise duty under Central Excise notification should also apply to sugar cess. The Tribunal referred to a previous case involving diversion of sugar for home consumption and upheld the view that sugar cess is indeed a duty of excise. Moreover, the Tribunal highlighted that a circular from 1993 exempted sugar cess on exported sugar, further supporting the appellant's argument for exemption. Consequently, the demands raised in the impugned order were deemed unsustainable, and the appeals were allowed with consequential relief. Judgment by Larger Bench: The Larger Bench of the Tribunal considered the issue of rubber cess under the Rubber Act, 1947, and concluded that the mode of collection does not alter the nature of excise duty. It was established that sugar cess, akin to rubber cess, remains an excise duty despite being levied as a cess. The Tribunal emphasized that the Sugar Cess Act, 1982, is essentially a duty of excise, warranting the same treatment as excise duty. Applying the principles from previous judgments, the Tribunal determined that the appellant is not liable to pay sugar cess for export of goods, in alignment with Notification No. 42/2001-CE (NT) and the exemption provided in the 1993 circular. The impugned order was set aside, and the appeals were allowed based on the comprehensive analysis and legal interpretation presented.
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