Order Date – 26 June 2023

Parties: M/s. Diamond Beverages Private Limited Vs Commissioner of CGST & CX, Kolkata South Commissionerate

Facts – 

• The Appellant, M/s. Diamond Beverages Private Limited, had filed a refund application under section 11B of the central Excise Act, 1944 read with section 142(9)(b) of the Central Goods and Services Tax Act, 2017 for refund of Cenvat credit of Sugar cess as availed by the Appellant in its revised ER 1 return for the month of June 2017.
• A show cause notice dated 01.05.2018 was issued on the ground that sugar cess is not a duty of excise and hence refund of the same cannot be accepted. The same was confirmed in Order-in-Original on the only ground that the matter is pending and has not attained finality. 
• It was upheld by the Ld. First Appellate Authority on new grounds which was never an allegation in the SCN issued for rejection.

Issue –

• Whether the ld. Appellate authority was correct in rejecting the refund by holding that the earlier order as the same has not attained finality?

Order – 

• The Tribunal observed that both the lower authorities were not correct in rejecting the refund claim of the appellant on the ground of pendency of proceedings when no stay has been given by any higher court in the earlier order regarding eligibility of Cenvat credit.
• Further having regard to the CBIC Circular CBIC Circular No. 572/9/2001-CX dated 22.02.2001 the Appellants are entitled to the refund of sugar cess and that there is no basis to deny the said refund at the present moment by the department.
• It may be noted that on the subject of consequential refund, where the department has gone in appeal, there already exists a Circular No. 695/11/2003-CX., dated 24-2-2003 [2003 (152) E.L.T. (T42)]. This circular of the Board is binding on all field officers. Had this circular been followed in the case, unnecessary litigation as well as adverse observation of the Hon’ble High Court could have been avoided. This circular is once again brought to the notice of field officers with direction that it is followed scrupulously.
• Further observed that the Ld. Commissioner (Appeals) had also passed orders on various other grounds which was never alleged while issuance of the show cause notice and thus the appellate order to that extent goes beyond the allegations raised in the SCN and cannot be sustained on this ground also.
• The appeal allowed.