2017 (11) TMI 332 - AT - Central Excise

CENVAT credit on Sugar Cess - sugar cess paid on imported raw sugar - denial on the ground that sugar cess paid under the Sugar Cess Act was not admissible under Rule 3(i) of CCR, 2004 - Held that - issue is no longer res integra in the light of the decision in the case of Commissioner of Central Excise, Customs and Service Tax, Belgaum Versus Venkateshwara Power Projects Ltd. 2017 (7) TMI 836 - CESTAT, BANGALORE , where placing reliance in the case of Shree Renuka Sugars Ltd. 2014 (1) TMI 1469 - KARNATAKA HIGH COURT it was held that Rule 3 of the Cenvat Credit Rules provides that a manufacturer or producer of a final product shall be allowed to take credit of the duty of excise. Therefore, once a duty of excise is paid, the manufacturer or producer of the final product is entitled to take CENVAT credit - the Cenvat credit in respect of sugar cess paid as CVD on imported sugar is admissible - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Admissibility of Cenvat credit on sugar cess paid under the Sugar Cess Act.
2. Interpretation of Rule 3(i) of Cenvat Credit Rules, 2004.
3. Applicability of previous judgments on similar cases.

Analysis:
Issue 1: The case involved the admissibility of Cenvat credit on sugar cess paid under the Sugar Cess Act. The respondent imported raw sugar, paid sugar cess as CVD, used it in manufacturing white sugar, and cleared it by paying Central Excise duty. The adjudicating authority denied the credit, stating that sugar cess was not admissible under Rule 3(i) of Cenvat Credit Rules, 2004. The Commissioner(Appeals) allowed the appeal, relying on previous judgments, leading to the Revenue's appeal.

Issue 2: The Revenue argued that sugar cess was not prescribed as duty for availing Cenvat credit under Rule 3(i) of Cenvat Credit Rules. On the other hand, the Respondent contended that previous judgments, including the decision of the Karnataka High Court, supported their claim for Cenvat credit on sugar cess paid as CVD on imported sugar.

Issue 3: The Tribunal considered the judgments cited by the Respondent, including the case of CCE Vs. Shree Renuka Suygar Ltd, where it was held that the assessee was entitled to claim Cenvat credit on the cess paid as additional duty (CVD) on imported raw sugar under the Sugar Cess Act of 1982. The Tribunal found that the issue was settled by previous decisions, and the Respondent was entitled to the Cenvat credit on sugar cess paid as CVD on imported sugar.

In conclusion, the Tribunal upheld the impugned order, dismissing the Revenue's appeal and affirming the admissibility of Cenvat credit on sugar cess paid as CVD on imported sugar based on the precedents cited by the Respondent. The Tribunal emphasized that the Revenue could proceed as per law after the Supreme Court's decision on the pending Special Leave Petition.