2023 (2) TMI 1029 - AT - Central Excise

CENVAT Credit of Sugar Cess and Education Cess paid on such Sugar Cess levied under Sugar Cess Act, 1982 - of Sugar Cess and Education Cess paid on such Sugar Cess levied under Sugar Cess Act, 1982 - HELD THAT - There is no specific mention of Sugar Cess And Education Cess paid on such Sugar Cess under Rule 3 of Cenvat Credit Rules, 2004. However, the Hon ble Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS M/S SHREE RENUKA SUGARS LTD 2014 (1) TMI 1469 - KARNATAKA HIGH COURT decided the matter in favour of the assesse. On perusal of the said judgment, it is observed that the Cenvat Credit was allowed on the ground that the sugar cess is nothing but duty of excise on the ground that levy of such cess is under levy and collection of sugar cess under Central Exicse Act, 1944. However, Hon ble Supreme Court in a recent judgment of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA OTHERS 2019 (12) TMI 286 - SUPREME COURT held that the education cess is not a duty of excise. As regard the Sugar Cess the same is not a levy of Central Excise duty, whereas cess is levied under the sugar cess Act, 1982 . Therefore, the issue is that whether such cess and education cess paid thereon is duty of Central Excise or otherwise needs to be re-considered in the light of the recent judgment of Hon ble Supreme Court in the case of Unicorn Industries Vs. Union of India. The impugned order is set aside - appeal disposed off by way of remand to the Adjudicating Authority for passing a fresh order.

Summary

Issues involved:
Whether the appellant, a sugar industry, is entitled to Cenvat Credit for Sugar Cess and Education Cess paid on imported raw sugar under the Sugar Cess Act, 1982.

Analysis:

The appellant, represented by Shri Rahul Patil, argued that the issue has been previously decided in their favor by the Tribunal at Banglore and the Karnataka High Court, citing relevant judgments. The appellant contended that they should be allowed the credit based on these precedents. The appellant relied on judgments such as M/s. Barnagore Jute Factory Co. Vs. Inspector of Ce.Ex.- 1992 (57) ELT 3 (S.C) and M/s Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. CCE, Jaipur- 2018 (7) TMI 325- CESTAT NEW DELHI.

The Revenue, represented by Shri Tara Prakash, supported the findings of the impugned order, maintaining their stance on the issue.

Upon review, the Tribunal noted that while there was no specific mention of Sugar Cess and Education Cess under Rule 3 of Cenvat Credit Rules, 2004, the Karnataka High Court had ruled in favor of the assessee in a similar case. However, the Tribunal highlighted a recent Supreme Court judgment in Unicorn Industries Vs. Union of India - 2019 (370) ELT 3 (S.C) which clarified that education cess is not a duty of excise. The Tribunal differentiated between Sugar Cess and Central Excise duty, emphasizing that Sugar Cess is levied under a different Act. Consequently, the Tribunal decided to remand the case back to the Adjudicating Authority for a fresh order, considering the recent Supreme Court judgment.

In conclusion, the Tribunal set aside the impugned order and directed a remand to the Adjudicating Authority for further consideration in light of the recent Supreme Court judgment.