Custom, Excise & Service Tax Tribunal
Shree Mahuva Pradesh Sahakari Khand ... vs Surat-I on 22 July, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST ZONAL BENCH : AHMEDABAD
REGIONAL BENCH - COURT NO. 3
EXCISE Appeal No. 10391 of 2018-DB
[Arising out of Order-in-Original/Appeal No CCESA-SRT-APPEAL-PS-127-2017-18 dated
30.10.2017 passed by Commissioner ( Appeals ) Commissioner of Central Excise, Customs
and Service Tax-SURAT-I]
Shree Mahuva Pradesh SahakariKhandUdyog .... Appellant
MandliLimited
At & Post. Factory Site, Bamania, Tal. Mahuva,
SURAT,GUJARAT
VERSUS
Commissioner of Central Excise & ST,Surat-I .... Respondent
New Building, Opp. Gandhi Baug, Chowk Bazar, Surat, Gujarat -395001 AND EXCISE Appeal No. 10392 of 2018-DB [Arising out of Order-in-Original/Appeal No CCESA-SRT-APPEAL-PS-125-2017-18 dated 30.10.2017 passed by Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-SURAT-I] Shree Mahuva Pradesh SahakariKhandUdyog .... Appellant MandliLimited At & Post. Factory Site, Bamania, Tal. Mahuva, SURAT,GUJARAT VERSUS Commissioner of Central Excise & ST, Surat-I .... Respondent New Building, Opp. Gandhi Baug, Chowk Bazar, Surat, Gujarat -395001 APPEARANCE :
Shri D.K. Trivedi, Advocate for the Appellant Shri Himanshu P Shrimali, Superintendent (AR) for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) DATE OF HEARING:09.07.2024 DATE OF DECISION: 22.07.2024 FINAL ORDER NO. 11591-11592/2024 RAMESH NAIR:
The issue involved in the present appeals is that whether the appellant is entitled for exemption of sugar cess under Notification No. 42/2001-CE 2 Appeal No. E/10391-10392/2018-ST (NT) dated 26.06.2001 for export of sugar. The case of the department is that the goods under Notification No. 42/2001 - CE (NT) can be cleared for export under bond without payment of excise duty. However, the cess is not the excise duty, therefore, the appellant are liable to pay the sugar cess which is being other than excise duty.
2. Shri Devashish K. Trivedi, learned Counsel appearing on behalf of the appellant submits that the issue is no longer res-integra as the same issue in the appellant's own case has been decided in favour of the appellant vide Final Order No. 11047-11049/2024 dated 14.05.2024. He requests that this appeal may also be disposed of considering this Tribunal decision dated 14.05.2024.
3. Shri Himanshu P Shrimali, learned Superintendent (AR) appearing for the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides and perused the record. We find that the only issue to be decided is whether by virtue of exemption notification No. 42/2001-CE(NT) dated 26.06.2001, the appellant is liable for payment of sugar cesson export of sugar. We find that the very same issue in the appellant's own case has been decided by this Tribunal vide Final Order No. 11047-11049/2024 dated 14.05.2024, wherein the following order has been passed:-
"4. We have carefully considered the submission made by both sides and perused the records. We find that the department has raised the demand of sugar cess on the ground that the appellant cannot be escaped from the payment of sugar cess on export of sugar as the same is not covered under the Notification No. 42/2001-CE (NT) on the ground that the sugar cess is not an excise duty. We find that as per the Sugar Cess Act, 1982 the sugar cess is payable as per the provisions of sugar cess act which mandates that cess will be levied and collected as duty of excise on all sugar produced by any sugar factory in India. Sub- section 4 of the act also provides that provisions of Central Excise Act, 1944 and rules made thereunder including relating to refund and exemption shall apply in relation to levy and collection of the duty of excise under that. 4.1 In view of the said provision it is clear that even though the sugar cess is levy under the Sugar Cess Act, 1982 by virtue of the provisions under sugar cess act, the sugar cess is considered as excise duty for all the purposes, therefore, even the exemption granted to excise duty under Central Excise notification shall apply mutandis- mutandis in respect of sugar cess also.
4.2 The decision in the case of Indian Sugar Exim Corporation Ltd directly applies on the issue in hand wherein the Tribunal has passed the following order:-
"This appeal is directed against the Order-in-Appeal No. SDK(1964)288/MI/2002 dated 31-12-2002.3
Appeal No. E/10391-10392/2018-ST
2. Relevant facts that arise for consideration is that respondent had executed a bond of Rs. 20 crores for clearance of sugar without payment of duty, for export. Out of quantity of sugar cleared for export under bond, 14,906 quintals of sugar was diverted to home consumption after obtaining necessary permission. Respondent was directed to pay the differential central excise duty, Sugar Cess and interest thereof. Respondent discharged the central excise duty and Sugar Cess, but challenged the imposition of interest on such duty and Cess. Commissioner (Appeals), rejected the claim of assessee as regards the interest liability on central excise duty but allowed the appeal in respect of interest on Cess. Revenue is in appeal against the setting aside of interest on cess.
3. Ld. SDR would submit that duty liability on respondent arose due to diversion of export sugar for home consumption. It is the submission that interest liability also arose as Notification No. 42/2001-C.E. (N.T.) dated 26- 6-2001 clearly stipulates that interest is payable. He would rely upon the larger bench decision of tribunal in the case of TTK-LIG Ltd. - 2006 (193) E.L.T. 169 to submit that Cess is also a duty of excise as per Sugar Cess Act. He submits that impugned order is erroneous to that extent.
4. None appeared for respondent nor there is any request for adjournment. Respondent has also not filed any cross-objections. Since the matter is of 2003, we take up the appeal for disposal in the absence of any representation from respondent.
5. We considered the submissions made by ld. SDR and perused records. It is seen that learned Commissioner (Appeals) while setting aside the interest liability on the Sugar Cess (paid by respondent on diversion to local consumption) held as under:-
"However, the position in law governing interest on cess payments, and interest thereon, would be different. While Sugar Cess Act recognized this cess to be para material with duties of excise, inter alia in application of the procedural provisions of Central Excise law in its collection and for other purposes, the specific law contained in Notification No. 41/2001 does not cover the liability for payment of cess, and interest charges, arising from diversion for home consumption. Therefore, while the liability to pay the cess on diversion for home consumption arise from the Sugar Cess Act, read with the Central Excise Act and Rules, the interest charges on cess would be governed only with reference to the provisions of Central Excise Act and Rules. Section 11AA of Central Excise Act provides that interest shall be paid on Central Excise duties after 90 days from the date of determination made by the competent authority. In this case, the initial determination also including the requirement to pay interest on cess, was communicated to the appellant on 7-8-2001. Only the computation was made in application of the provision of Notification No. 41/2001 instead of Section 11AA of Central Excise Act. Therefore, the period excluded for charge of interest prior to the date of determination and 90 days thereafter contained in Section 11AA of Central Excise Act, needs to be reconsidered for the collection of interest charges payable on cess.
Except for this change in the quantum of interest on cess liable to be paid by the appellant, the findings on other charges contained in the impugned order are correct in law and maintained. Appellant shall be served with another 4 Appeal No. E/10391-10392/2018-ST demand separately for the interest on cess based on the findings contained in this order in appeal, which shall be payable by the appellant immediately, otherwise they shall be additionally liable for additional charge of interest for each month of delay, in excess of the amount determined in the revised demand order of the concerned Maritime Commissioner, till the date of payment".
6. We notice that the Sugar Cess is payable as per the provisions of Sugar Cess Act, 1982. Section 3(1) of Sugar Cess Act, 1982, mandates that Cess will be levies and collected as a duty of excise on all sugar produced by any sugar factory in India. Further, sub-section (4) provides that provisions of the Central Excise Act, 1944 and rules made thereunder, including relating to refunds and exemptions from shall apply in relation to the levy and collection of the duty of excise under that Act. ]
7. Notification No. 42/2001-C.E. (N.T.) dated 26th June, 2001 at clause V(b) specifically mandates payment of excise duty and interest thereof on any goods cleared for export is diverted to local use. As Sugar Cess is collected as a duty of excise, interest at applicable rate and from the period as is mentioned in notification No. 42/2001-C.E. (N.T.) will be payable by the respondent for diversion of the sugar to home consumption.
8. In view of the above reasoning, we are of the considered view that the impugned order to the extent it sets aside the interest payable on the amount of Sugar Cess is unsustainable and is liable to be set aside and we do so. Appeal is allowed as indicated hereinabove."
4.3 The identical issue has been considered by the Larger Bench of this Tribunal wherein the identical levy of rubber cess in terms of Rubber Act, 1947, the larger bench has held that the mode adopted for collection of excise either from owner or state or from the manufacturer by whom the rubber is used will not change nature of excise duty which is levied as a cess. The sugar cess remains as excise duty notwithstanding the fact that it is levied as cess for purpose of Section 12 of Rubber Act, 1947.
4.4 It was further held that subsequent allocation of an amount by appropriation made by law by parliament will not take away duty of excise leviable under cess under Rubber Act from sweep provisions of Section 3 (1)of Customs Tariff Act, for imposing additional duty of customs equal to excise duty leviable under Section 12 A. Similar duty i.e. rubber cess was considered as duty of excise.
4.5 Applying the ratio of these judgments in the present case also, the Sugar Cess Act, 1982 is nothing but the duty of excise. Accordingly, the same treatment to the sugar cess as to the excise duty should be given. Hence, under the facts of the present case in view of the judgment in the case of export of goods by virtue of Notification No. 42/2001- CE (NT) the appellant is not liable to pay sugar cess. Moreover, as per Notification issued vide Circular No. 10/93 CX.08 dated 01.09.1993 in case of export of sugar, the sugar cess is exempted. The notification is reproduced below:-
Circular No. 10/93-CX.8, dated 1-9-1993 [From F.No.261/12/42/92-CX.8] Government of India Central Board of Excise & Customs New Delhi 5 Appeal No. E/10391-10392/2018-ST Subject: Sugar Cess Act, 1982-Exemption of Cess on Sugar to be exported.
NOTIFICATION 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 duty of excise, leviable under sub-section (1) of Section 3 of the said Act, on sugar exported out of India, with immediate effect.
5. As per our above discussion and finding, the demands raised in the impugned order are not sustainable. Accordingly, the impugned order is set aside. Appeals are allowed with consequential relief."
It can be seen from the above decision passed in the appellant's own case, the facts involved are absolutely identical. Accordingly the demand of sugar cess raised as per the impugned order is not sustainable. Hence, the impugned orders are set-aside and the appeals are allowed.
(Pronounced in the open court on 22.07.2024) (Ramesh Nair) Member (Judicial) (C L Mahar) Member (Technical) KL