TMI Blog2018 (7) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule to the Central Excise Tariff Act, 1985. While importing sugar in India during the F.Y. 2009-10, the Appellant had paid Additional Duty of Customs equivalent to Basic Excise Duty (CVD) and besides that, the Appellant had also paid Sugar Cess . Sugar, being the basic input raw material for manufacture of beverage, was used by the Appellant in the manufacture of the excisable goods and at that time they took Cenvat Credit of CVD comprising of Basic Excise Duty. No Cenvat on Sugar Cess was available at that time. 3. The Hon ble High Court of Karnataka in the matter of CCE vs. Shree Renuka Sugar Ltd.; reported in 2014(302) ELT 33 (Kar.) vide order dated 6.8.2013 has held that Sugar Cess is duty of Excise and not fee and once the payment of duty is established, the assessee is entitled to take Cenvat Credit under Rule 3 of the Cenvat Credit Rules. Therefore in terms of the decision of the Hon ble High Court in Shree Renuka Sugar Ltd. (supra) the Appellant availed the Cenvat Credit of Sugar Cess amounting to ₹ 1,79,610/- in the month of July, 2014 and informed the same to the department on 21.11.2014. 4. According to the department, the Appellant had wrongly availed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charging section 3(1) of the Sugar Cess Act, 1982 provides that there shall be levied and collected a cess, for the purpose of Sugar Development Fund Act, 1982, a duty of excise on all sugar produced by any sugar factory in India. Thus, the charging section clarifies that sugar cess levied on all sugar produced by any sugar factory in India is a duty of excise . He further submitted that Section 2A of the Central Excise Act expressly provides that unless the context otherwise requires, reference to expression duty , duties , duty of excise and duties of excise shall be construed to include reference to Central Value Added Tax (CENVAT) and thus the duty of excise paid under Sugar Cess Act is also CENVAT. He has also submitted that the department has erred in relying upon the decision of Hon ble Gujarat High Court in Commissioner Vs. Sahakari Khand Udyog Mandli Limited 2010 (263) ELT 34 (Guj.) in as much as decision of Karnataka High Court in Shree Renuka Sugars Ltd. has come later in point of time and it is settled law that the later the better principle. Appellant relied upon the following: (i) Commissioner of Central Excise, Kol-IV Vs. Kusum Products Ltd. 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in such manner as may be prescribed - (a) a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured in special economic zones, which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff. 4. Crediting proceeds of duty to Consolidated Fund of India. The proceeds of the duty of excise levied under Section 3 shall be credited to the Consolidated Fund of India. xxx xxx xxx CENVAT Credit Rules, 2004 Rule 3. (1) A manufacturer or producer of final products shall be allowed to take (1) credit (hereinafter referred to as the CENVAT credit) of, - (i) the duty of excise specified in the First Schedule to the Tariff Act, leviable under the Act; (ii) the duty of excise specified in the Second Schedule to the Tariff Act, leviable under the Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Therefore, although Sugar Cess has been levied under the provisions of Sugar Cess Act, the same has to be treated at par with the duty levied under Section 3(1) of the Customs Tariff Act, 1975. 8. There is no dispute that the appellant had imported sugar and had paid Additional Duty of Customs equivalent to Basic Excise Duty. Besides, CVD paid on importation of sugar, the appellant had also paid Sugar Cess and although the appellant had availed Cenvat credit of CVD but not on Sugar Cess. The issue involved in the matter is whether the appellant is entitled for Cenvat credit of Sugar Cess or not. According to me, the question whether sugar cess is a tax or fee, was specifically dealt with the Hon ble High Court of Karnataka in the matter of Shree Renuka Sugar Ltd. (supra) in which it was held by the Hon ble High Court that the sugar cess paid under the Sugar Cess Act is tax and to be precise it is duty of excise and not fee and therefore in view of it, the appellant is entitled for Cenvat credit of Sugar Cess. I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e levy. Section 9 speaks of levy on all goods manufactured or produced in a scheduled industry. Jute yarn is goods known to market. Therefore, they are goods manufactured in a scheduled industry. The fact that such yarn is captively consumed in the manufacture of jute textile is of no relevance. In fact, this question is concluded by the decision of this Court in J.K. Cotton Spinning Weaving Mills v. Union of India, 1988 (1) SCR 700, a decision rendered under the Central Excises and Salt Act .. . 18. But the language of Rule 3 of Jute Cess Rules is altogether different. It indicates a continuing applicability of the provisions of the Central Excise Act and the Rules. What was levied was a duty of excise and it was to be levied and collected in accordance with the provisions of the Central Excise Act and the Rules. The effect is as if the words for the time being in force were thereafter the words the provisions of Central Excises and Salt Act, 1944 (1 of 1944) and the Rules made thereunder in Rule 3. We are, therefore, of the opinion that the amendment of Rules 9 and 49 made in 1982 (with retrospective effect from 1944) is equally applicable in the matter of levy and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
