CESTAT allows Cenvat Credit on Sugar Cess paid as CVD on Import of Raw Sugar [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed cenvat credit on sugar cess paid as Countervailing Duty (CVD) on import of raw sugar.

The issue involved in the present case is that whether the appellant, Shree Renuka Sugars Limited is entitled for cenvat credit. In respect of sugar cess paid as CVD in respect of import of raw sugar.

Rahul Patel, Senior General Manager Taxation of the appellant company submitted that this issue is no longer res-Integra as this issue has been considered and decided in favour of the assessee including in their own case of the appellant themselves.

R.K Agarwal, Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order and placed reliance on the decision of the Guajrat High Court in the case of commissioner Vs. Sahakari Khand Udyog limited.

Section 3 of the Sugar Cess Act provides for levy and collection as 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. Therefore, the cess leviable and collected is the stage of production of sugar in the sugar factory. Because it is a tax on production, it is described as a duty of excise.

In the matter of Shree Renuka Sugars ltd, the Karnataka High Court observed that “At the time of importing raw sugar the assessee has paid the additional Customs duty or CVD (countervailing duty) as prescribed under Section 3 of the Customs Tariff Act of 1975 If the Article imported is a like article produced or manufactured in India and if excise duty on such like article is leviable, the assessee is liable to pay the additional duty.”

A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “In view of the above Karnataka High Court judgment In favour 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.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates