2008 (7) TMI 758 - AT - Central Excise

Summary

Issues:
1. Whether credit of NCCD taken has to be reversed due to exemption from payment of NCCD extended to PTY w.e.f. 17-5-2003.

Analysis:
The central issue in this case before the Appellate Tribunal CESTAT, Ahmedabad was whether the credit of National Calamity Contingent Duty (NCCD) had to be reversed following the exemption from payment of NCCD extended to a specific product (PTY) from a certain date. The Commissioner (Appeals) allowed the appeal by the respondents based on the grounds that the rules/notification did not mandate the reversal of credit and that a previous decision of the Tribunal supported this position.

The Tribunal considered the arguments presented by the Department's Representative (DR) and the respondents who submitted cross-objections. The DR contended that as per Section 136 of the Finance Act read with Notification No. 46/2003 dated 17-5-2003, the assessee could not avail credit of NCCD paid on inputs used in manufacturing finished goods exempted from NCCD payment from the specified date. However, the Tribunal found that the decision cited by the Commissioner (Appeals) was directly applicable to the case. The Tribunal noted that the previous decision highlighted that PTY could not be classified as exempted goods since other duties were applicable. Additionally, if PTY was exported, the appellants would be entitled to use NCCD credit or claim a refund. The Tribunal emphasized that NCCD credit could also be utilized on the product itself.

Consequently, the Tribunal rejected the appeal filed by the Department, affirming the position that the credit of NCCD did not have to be reversed in this scenario. The judgment was dictated and pronounced in court by the presiding judge, Shri B.S.V. Murthy, J.