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TMI Blog2023 (8) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, ie (1) Section 3 of Central Excise Act of 1944, at the rate prescribed in the Central Excise Tariff Act, 1985 In addition, the assessee is also liable to pay cess as a duty of excise under the Sugar Cess Act of 1982 On such additional duty or CVD paid at the time of import by the assessee, apart from the Basic Customs Duty, he is entitled to the Cenvat credit in terms of clause (vii) of Rule 3 of Cenval Credit Rules, 2004. In view of the above Karnataka High Court judgment which is in favor of the appellant in their own matter, the issue is no longer res-Integra. Accordingly the appellant is legally entitled for the cenvat credit on the sugar cess paid on import of raw sugar. In view of the forgoing and also the fact that Section 11D can be invoked only if duty is collected, but not paid, whereas in the instant case, same was paid from accumulated CENVAT Credit, it is found that the case of department has no legs to stand. Further, when levy i.e. Sugar Cess in this case has not been done away with, but has only been exempted vide Notification No. S.O. 102 (E), dated, 07.01.2009 by Ministry of Consumer Affairs, party always has the right to avail or not to avail exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted levy of sugar cess when such sugar was manufactured from other sugar. Relevant text of the said Notification is as under: Sugar-Exemption from sugar cess In exercise of the powers conferred by sub-section (4) of Section 3 of the Sugar Cess Act, 1982 (3 of 1982), the Central Government, being satisfied that it is necessary in public interest so to do, hereby exempts the levy of cess on sugar, collected as a duty of excise, under sub-section (1) of Section 3 of the said Act, on any sugar manufactured from such other sugar on which cess, leviable under sub-section (1) of Section 3 of the said Act, has been paid. (emphasis Supplied) Board, vide Circular No. 883/3/2009-CX dated 26th February, 2009, inter alia, had clarified that the Ministry of Public Distribution and had since Consumer Affair dad since exempted the levy of cess on sugar, collected as a duty of excise, under subsection (1) of the Section 3 of Sugar Cess Act, 1982, on any sugar manufactured from such other sugar on which cess is leviable under sub section (1) of Section 3 of the said Act has been paid already. Relevant text of Board's Circular is as under: The Sugar Cess Act, 1982 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat credit of sugar cess amounting to Rs1,94,84,774/- of which they have filed rebate claim for Rs.1,20,44,820/- and the remaining moment as ten the of Rs 74,39,954/- was required to be recovered from them, as per the department. In fact, the Noticee were not allowed to avail and utilize the Cenvat credit of sugar cess and other levies as per Board's Circular (supra) and they were also not required to collect the same from the buyers/ customers. 7. Therefore as per the department, in the instant case, the Noticee availed the credit of said sugar cess and paid the sugar cess on clearance of refined sugar and collected the said sugar cess from their buyers/ customers which amounted to cascading of sugar cess. Thus, as per the department, the Noticee contravened the provisions of Notification No. S.O. 102(E), dated 7 - 1 - 2009 , and wrongly recovered from their customers/ buyers, and thereby, the Noticee has contravened the provisions of the Act. Therefore, it appeared to the department that wrongly collected sugar cess of Rs. Rs 1,94,84,774/- (of which they have claimed rebate for Bs, 1, 20 ,44,820/ - and the remaining amount of Rs 74,39,954/-, which has been not deposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees. The tax/duty is imposed for public purpose and is not/need not be supported by any consideration of service rendered in returns. Whereas the fee is levied for services rendered. There is quid pro quo between the person who pays the fees and public authority which impose it. The duty levied for public purpose invariable credited to consolidated fund of India which ultimately utilised for all public purposes. However, levy and collection of fees is not credited to consolidated fund. 12. The Sugar Cess is levied U/s 3 (1) of the Sugar Cess Act, 1982, being duty of Excise. As per the provision, there shall be levied and collected duty as Cess, for the purpose of the Sugar Development Fund, 1982, a duty of excise on all sugar produced by sugar factory in India. This Sugar Cess duty is in addition to the duty of Excise leviable on Sugar under the Central Excise Act, 1944. As per the provisions of section 3, sugar cess is levied under Sugar Cess Act as a duty of excise and has all the characteristics features of Central Excise Duty under the Central Excise Act, 1944. A copy of Sugar Cess Act, 1982 is enclosed herewith and marked as annexure I. 13. In the instant case, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable. Hence, Customer is not paying any additional amount over and above the price of the sugar. Considering this fact, the department's view is incorrect, illegal, and vexatious that the appellant has collected the duty separately and fails to discharge the liability of the same. 18. Another fact in the case is that the appellant has collected the agreed total sale price from the customers. However, due to procedural requirement, it had no option but to split its sale price to accommodate Sugar Cess duty on the Excise Invoice. Hence, the sale price working was done on reverse basis to match the requirement of the law i.e., basic price of product, freight, and the taxes/duties separately. Sample copies of sales invoices along with copies of sales confirmation/deal confirmations enclosed with appeal memo supports this. 19. It is also a fact that Appellant has not collected any excess price by way of sugar cess, over and above the sale price. Alternatively, considering the notification dated 07.01.2009, if the Appellant would have not avail sugar cess credit on raw sugar and decided not to discharge the sugar cess liability on final goods i.e. White sugar, In that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cess liability though Credit. The Notification doesn't specify that the Assessee should not discharge sugar cess duty on final goods once he pays the sugar cess on raw material i.e. raw sugar. The assessee can either enjoy the exemption benefits or can avail the Cenvat Credit and discharge sugar cess liability on final goods which even otherwise is not liable for payment. 23.1 In this context, the Appellant relied on following Judgments /orders: i. Hon'ble Supreme Court in the matter of Commissioner of Central Excise (Appeals) Ahmedabad V/s Narayan Polyplast, 2005 (179) ELT 20 it is held that Exemption Vis a vis Cenvat Option-whether assessee bound to avail the exemption or can forgo the same in order to avail the Cenvat Credit-Revenue Neutral transactions. ii. Hon'ble Supreme Court in the matter of Commissioner of Central Excise Cus Vadodara V/s Narmada Chematur Pharmaceuticals Limited, 2005 (179) ELT 276 iii. Hon'ble CESTAT Mumbai in the matter of Parakh Food Limited, V/s Commissioner of Central Excise, Pune, 2018 (360) ELT 1017. iv. Hon'ble CESTAT Mumbai in the matter of Orbit bearing (1) Private Limited, V/s Commissioner of Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod: The department has issued impugned SCN on 09.05.2014 and thereby invoked the extended period of limitations to cover the period July 2011 to June 2013 (Sugar cess credit last discharged through accumulated credit during February 2013) only on the ground that the appellant has not brought to the notice of department about the recovery of sugar cess from the customer. It is the department who acknowledged the said facts only when the appellant was asked to furnish the details of such sugar cess collected from the buyer/customers and unearthed the said facts. 28.1 The above said contention is totally wrong and incorrect. As the department was aware that Appellant was:- a. Having sugar refinery, b. Manufacturing of refined white sugar out of raw sugar, c. Procuring raw sugar from domestic market/import by payment of sugar cess. d. Not liable for discharge of sugar cess on its white refined sugar, as sugar is manufactured out of raw sugar on which sugar cess is already paid by its suppliers. e. Filling timely periodical return along with details of sugar cess. 29. In the instant case, since the department was aware the above facts, they sought the requisite in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een not deposited by the Noticee to the Government exchequer is liable to be recovered under section 11D of the Central Excise Act, 1944 read with Section 11 of the Central Excise Act, 1944, along with interest under Section 11DD. 34. The learned Advocate for the appellant submitted that this issue is no longer res-Integra as this issue has been considered and decided in favor of the assessee including in their own case of the appellant themselves. He placed reliance on the following: The High Court of Karnataka in the matter of Shree Renuka Sugars ltd 2014(302) ELT 33 (Kar) CESTAT South Zonal Bench Bangalore order in the matter of Shree Renuka Sugars Ltd 2007 (218) ELT 388 (Tri Bang) CESTAT South Zonal Bench Bangalore order in the matter of Shree Renuka Sugars Ltd E/26700/2013-SM Hon'ble Supreme Court Judgment in the matter of Barnagore Jute Factory Co. 1992 (57) ELT 3 (SC) CESTAT New Delhi in the matter of M/s Hindustan Coca-Cola Beverages Pvt Ltd 2018 (7) TMI 325- CESTAT New Delhi CESTAT Hyderbad in the matter of M/s Hindustan Coca-Cola Beverages Pvt Ltd 2019-VIL-236-CESTA HYD-CE The High Court of Gujarat in the matter of Sahakari Khand Udyog Mandl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from sub-section (2). The way sub-section (2) is worded makes it clear that what is levied and collected as a cess under sub-section (1) of Section 3 is characterized as a duty of excise levied under the Central Excise Act . Further, sub-section (4) makes it clear that the provisions of the Central Excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty shall, so far as may be, apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on sugar under that Act. In other words, the provisions of the Central Excise Act and the Rules made thereunder are read into the Act. Levy and collection of cess under the Act is treated as levy and collection of a duty of excise on sugar under the Central Excise Act. ------------------------------------------------------------------------------- 33. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision giving benefit based on decision of Hon ble Karnataka High Court is reproduced below: In view of the above Karnataka High Court judgment in favor of the appellant themselves, the issue is no longer res-Integra. Accordingly the appellant is legally entitled for the cenvat credit on the sugar cess paid on import of raw sugar . 37.1 In view of the forgoing and also the fact that Section 11D can be invoked only if duty is collected, but not paid, whereas in the instant case, same was paid from accumulated CENVAT Credit, we find the case of department has no legs to stand. Further, when levy i.e. Sugar Cess in this case has not been done away with, but has only been exempted vide Notification No. S.O. 102 (E), dated, 07.01.2009 by Ministry of Consumer Affairs, party always has the right to avail or not to avail exemption, as per the trite law relied upon by appellants. And all consequences regarding payment of duty as well as availing permissible credit will follow in such situation. Department cannot force availment of exemption as distinguished from withdrawal of levy in which case requirement of payment of tax becomes non-est. 38. Therefore, following above decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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