Custom, Excise & Service Tax Tribunal
Nsl Sugars Ltd vs Mysore on 12 March, 2025
E/20169/2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 1
Central Excise Appeal No. 20169 of 2016
(Arising out of Order-in-Original No. MYS-EXCUS-000-COM-SB-
05/15-16 dated 30.11.2015 passed by the Commissioner of Central
Excise, Customs and Service Tax, Mysore Commissionerate, Mysore.)
M/s. NSL Sugars Ltd.,
Koppa, Maddur Taluk, Appellant(s)
Mandya District,
Karnataka - 571 425.
VERSUS
The Commissioner of Customs,
Central Excise and Service Tax,
Mysore Commissionerate, Respondent(s)
S1/S2 Vinaya Marga, Siddharthanagar, Mysore - 570 011.
APPEARANCE:
Mr. B. Venugopal, Advocate for the Appellant Mr. Sanjay Venkat, Superintendent (AR) for the Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MR PULLELA NAGESWARA RAO, MEMBER (TECHNICAL) Final Order No. 20349 /2025 DATE OF HEARING: 12.03.2025 DATE OF DECISION: 12.03.2025 PER : DR. D.M. MISRA This is an appeal filed against Order-in-Original No. MYS- EXCUS-000-COM-SB-05/15-16 dated 30.11.2015 passed by the Page 1 of 4 E/20169/2016 Commissioner of Central Excise, Customs and Service Tax, Mysore Commissionerate, Mysore.
2. Briefly stated the facts of the case are that the appellant are engaged in the manufacture of Sugar falling under Chapter sub-heading 17011190 of the Central Excise Tariff Act, 1985. They are also having a co-generation plant, where they use coal and bagasse as inputs for manufacture of power/steam. On scrutiny of their monthly ER-1 Returns for the month of August 2014, it was noticed by the Department that during August 2014, the appellant had availed cenvat credit of Rs.70,28,300/- relating to Clean Energy Cess paid on imported coal, which were used as input for manufacture of Power/Steam for the period from 2010-11 to 2014-15. Alleging that Clean Energy Cess is inadmissible to cenvat credit, show-cause notice was issued to the appellant on 21.01.2015 for recovery of the said credit with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal.
3. At the outset, the learned advocate for the appellant submits that the appellant admitting the fact that cenvat credit on Clean Energy Cess availed for the month of August 2014 not admissible they have reversed the entire credit and the same has been appropriated in the impugned order. In the present appeal they do not dispute the inadmissibility of cenvat credit on Clear Energy Cess paid on imported coal during the relevant period, however, they are challenging confirmation of interest on the cenvat credit reversed and penalty imposed for availing the said credit. It is his contention that during the period in question i.e. between August 2014 to December 2014, the appellant though availed the cenvat credit has not utilized the same, since, they had sufficient cenvat credit balance in their cenvat credit register. Hence, demanding of interest on the said unutilized credit amount was incorrect. In support they referred to the Page 2 of 4 E/20169/2016 judgment of the Hon'ble Karnataka High Court in the case of CCE & ST, Bangalore vs. Bill Forge Pvt. Ltd. [2012 (279) ELT 209 (Kar.)], JK Tyre & Industries Ltd. v. Asst. Commissioner of Central Excise, Mysore [2016 (340) ELT 193 (Tri.-LB)] and Deccan Cements Ltd. Vs. Commissioner of Central Excise, Rangareddy [2020 (371) ELT 795 (Tri. - Hyd.)]. Further, he has submitted that the cenvat credit was availed by them on a bona fide belief that the same was admissible on the basis of the judgment of the Hon'ble Karnataka High Court in the case of the Commissioner of Central Excise, Customs & ST, Belgaum Vs. Shree Renuka Sugars Ltd. [2014 (302) ELT 33 (Kar.)]. Therefore, imposition of penalty, when the entire credit was reversed before adjudication, is untenable in law.
4. The Learned AR for the Revenue has reiterated the findings of the learned Commissioner.
5. Heard both sides and perused the records.
6. As far as the demand of cenvat credit of Rs. 70,28,300/- availed on Clean Energy Cess is concerned, the appellant accepting their liability and reversed the credit which has been appropriated in the impugned order. The learned advocate for the appellant does not dispute the said liability. However, the appellant vehemently contested imposition of penalty on them and also direction for recovery of interest on the inadmissible credit availed. We find that the appellant, after being pointed out, immediately reversed an amount of Rs.48,14,588/- before issuance of the notice and balance amount of Rs.22,13,712/- was reversed on 28.02.2015 after issuance of the show-cause notice before the adjudication order was passed. In this circumstance, we do not find justification for imposition of penalty, when the issue of admissibility of Clean Energy Cess is Page 3 of 4 E/20169/2016 debatable and the appellant availed the credit on bona fide belief about its admissibility. This Tribunal in the case of Deccan Cements Ltd. (supra) though confirmed the demand of cenvat credit on Clean Energy Cess but set aside the penalty holding that the issue is an interpretation of law, hence penalty is not imposable. Following the said precedent, we also hold that imposition of penalty cannot be justified. On the issue of levy of interest, the appellant claimed that they have not utilized the credit during the relevant period hence interest is not applicable. For verification of this fact, we remand the matter to the adjudicating authority to ascertain whether the appellant had utilized the credit during the said period or otherwise. Thus, for the limited purpose of applicability of interest on the said credit amount, the matter is remanded to the adjudicating authority.
7. In the result, the impugned order is modified; the demand for Clean Energy Cess is confirmed; penalty is set aside and for the levy of interest, the matter is remanded to the adjudicating authority. Appeal is partly allowed to the above extent.
(Operative part of this Order was pronounced in Open Court on conclusion of the hearing.) (D.M. MISRA) MEMBER (JUDICIAL) (PULLELA NAGESWARA RAO) MEMBER (TECHNICAL) GB Page 4 of 4