Relief to Bengal Beverages: CESTAT allows refund of Cenvat Credit of Sugar Cess

The Customs, Excise, And Service Tax Appellate  (CESTAT) giving relief to Bengal Beverages Private Limited (the Appellant) held that the refund claim of Cenvat Credit of Sugar Cess aggregating Rs 4,66,70,821 needs to be allowed.

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)].

Shri Chattopadhyay, learned Authorized Representative for the Respondent/Revenue justifies the impugned order and as regards the departmental appeal for the amount allowed as refund by the First Appellate Authority, the learned Authorized Representative relies on the judgment of the Hon’ble Apex Court in the case of Unicorn Industries v. UOI, 2019 (12) TMI 286, which has held in cases of refund/exemption of excise duty for the units located in the northeast region, the same does not apply to education cess as the notification governing the exemption does not specifically exempts the same.

The Bench of Judges P.K.Choudhary Member (Judicial) and P.V. Subba Rao Member (Technical) relied on the order of Hon’ble Karnataka High Court in Renuka Sugar, wherein the court has allowed the Cenvat credit of sugar cess.