Bengal Beverages Private Limited Vs Commissioner of CGST & CX (CESTAT Kolkata)
Briefly stated, the facts of the case are that the Appellant is engaged in the manufacture and clearance of Aerated water and Fruit based drinks (in short ‘final products’) classifiable under Chapter- 22 of the Central Excise Tariff Act, 1985 on payment of applicable excise duty. The Appellant operates under the Cenvat Credit Scheme and Sugar is one of the principal ingredients in the manufacture of their dutiable final product.
roceedings were initiated against the Appellant by a Show-cause Notice dated 02nd January 2018 proposing denial of refund of Cenvat Credit of Sugar Cess aggregating Rs.4,66,70,821/- claimed by the Appellant vide their refund application dated 25/09/2017 and submitted on 03/10/2017 before the office of the learned Assistant Commissioner, CGST & CX, Dankuni Division, Howrah CGST & CX Commissionerate on the ground that Sugar Cess is not expressly stipulated as a levy on which credit can be taken under Rule 3 of the Cenvat Credit Rules, 2004. The refund claim was rejected by the Adjudicating Authority vide the impugned Order-in-Original dated 11th June 2018.
CESTAT finds from the case records that the First Appellate Authority has rejected the part claim of Cenvat credit on the ground that a demand for recovery of such amount for the period August 2014 to June 2015 is pending adjudication by the learned Commissioner. We find that the issue in the said demand notice also relates to eligibility of Cenvat credit on sugar cess and when the same has already been decided in favour of the Appellant assessee, then the earlier demand notices become infructuous and cannot be sustained in the eyes of law. Further for the same period on the same issue, two demand notices cannot be sustained and hence we are of the view that the order of the learned First Appellate Authority needs to be modified to the above extent.
Thus in the instant case, the refund claim of the Appellant needs to be allowed.
FULL TEXT OF THE CESTAT KOLKATA ORDER
P.K.CHOUDHARY :
The current proceedings are result of the Order-in-Appeal No.07/HWH/CE/2019-20 dated 02/04/2019 passed by the learned Commissioner of CGST & CX (Appeals-II), Kolkata by which the refund application of the Appellant was partly allowed to the extent of Rs.2,97,57,505/- while the balance amount of Rs.1,69,13,316/- has been rejected for the grounds contained in the impugned order. Thus, the Appellant is in appeal for the amount rejected while the Revenue is in appeal against the amount sanctioned as refund by the First Appellate Authority.
2. Briefly stated, the facts of the case are that the Appellant is engaged in the manufacture and clearance of Aerated water and Fruit based drinks (in short ‘final products’) classifiable under Chapter- 22 of the Central Excise Tariff Act, 1985 on payment of applicable excise duty. The Appellant operates under the Cenvat Credit Scheme and Sugar is one of the principal ingredients in the manufacture of their dutiable final product.
3. Proceedings were initiated against the Appellant by a Show-cause Notice dated 02nd January 2018 proposing denial of refund of Cenvat Credit of Sugar Cess aggregating Rs.4,66,70,821/- claimed by the Appellant vide their refund application dated 25/09/2017 and submitted on 03/10/2017 before the office of the learned Assistant Commissioner, CGST & CX, Dankuni Division, Howrah CGST & CX Commissionerate on the ground that Sugar Cess is not expressly stipulated as a levy on which credit can be taken under Rule 3 of the Cenvat Credit Rules, 2004. The refund claim was rejected by the Adjudicating Authority vide the impugned Order-in-Original dated 11th June 2018.
4. The Appellant filed an Appeal before the First Appellate Authority which by its order dated 02/04/2019 partly allowed the refund claim to the extent of Rs.2,97,57,505/- while the balance amount of Rs.1,69,13,316/- has been rejected on the ground that for the said amount covering the period August 2014 to June 2015, the Appellant has been served with a Show Cause Notice No.32/Commr./2015 dated 21/08/2015 which is pending adjudication and hence the said amount being under dispute cannot be refunded to the Appellant. Hence the present appeals.
5. Shri Ankit Kanodia, learned Advocate appearing for the Appellant assessee has assailed the order of the First Appellate Authority to the extent of denial of refund claim for a part period on the ground that such amount is pending adjudication on the ground that when the subject matter of refund itself is not in dispute and that the lower authority has sanctioned the refund for the period post June 2015 hence the proceedings vide notice dated 21/08/2015 becomes infructuous as in the current proceedings also the same amount for the same period is in dispute and when the eligibility of the Cenvat credit has been defined to be in favour of the Appellant, then the refund for the prior period cannot be withheld. The Learned Advocate refers to the decision of the Hon’ble Karnataka High Court rendered in the case of Shree Renuka Sugar [2014 (302) ELT 33] upholding the views of the Tribunal [2007 (218) ELT 388] wherein Cenvat Credit in respect of Sugar Cess has been specifically allowed and Civil Appeal filed by the Revenue against the said Order of the Hon’ble Karnataka High Court has also been dismissed by the Hon’ble Supreme Court [2016 (335) ELT A 77(SC)]. The Learned Advocate also invited our attention to the following decisions passed by different Benches of the Tribunal allowing credit of Sugar Cess by relying upon the judgement of the Hon’ble Karnataka High Court.
