The Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad ruled that the section 11D of Central Excise Act, 1944 can be invoked only if duty is collected, but not paid.
Facts
M/s. Shree Renuka Sugar Limited, At and Post, Bharapar, Gandhidham (Kutch), was industrial unit engaged in manufacture of excisable goods, viz., Sugar falling under Chapter No. 17 of the Central Excise Tariff Act, 1985, availing the Cenvat credit of duty paid on inputs, capital goods and input services under Cenvat Credit Rules, 2004, and holding Central Excise Registration under rule 9 of the Central Excise Rules, 2002.
The Noticee was not required to pay Sugar cess 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 and other cesses on further clearance when they have already paid the Cess.
The Noticee had availed and utilized 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 and they were also not required to collect the same from the buyers/ customers.
Submissions
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.
Decision
The two member bench of Raju Member (Technical) And Somesh Arora Member (Judicial) observed that the appellant is legally entitled for the cenvat credit on the sugar cess paid on import of raw sugar.
The Tribunal said 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, the case of the department has no legs to stand.
It was observed that when levy i.e. Sugar Cess in this case has not been done away with, but has only been exempted vide Notification 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 a situation. Department cannot force availment of exemption as distinguished from withdrawal of levy in which case requirement of payment of tax becomes non-est.
Case title: Shree Renuka Sugars Limited v/s C.C.E. & S.T.-Rajkot
Citation: Excise Appeal No. 10161 of 2015
