2015 (10) TMI 1214 - AT - Central Excise

Levy of NCCD - whether the duty of NCCD is leviable on removal of POY for captive Consumption, and on sale to other 100% EOUs as deemed exports, during 2003-2004 - Held that - issue is no more res-integra and this Hon ble Tribunal has held in the case of Filatex India Ltd. vs Commissioner of Central Excise & Service Tax, Vapi 2014 (11) TMI 72 - CESTAT AHMEDABAD that NCCD is not leviable, where the goods are cleared for export or for captive Consumption. - issue is identical in the present appeal and the above decision of this Hon ble Bench is squarely applicable. In view of the same, the impugned orders in appeal are set-aside - Decided in favour of assessee.

Summary

Issues Involved:
Levying of National Calamity Contingent Duty (NCCD) on removal of POY for captive consumption and sale to other 100% EOUs as deemed exports during 2003-2004.

Analysis:
The issue in this case revolves around the levy of NCCD on the removal of Partially Oriented Yarn (POY) for captive consumption and sale to other 100% Export Oriented Units (EOUs) as deemed exports during the fiscal year 2003-2004. The Tribunal notes that the appellants did not appear for the hearing, and the arguments were presented by the Learned Authorised Representative on behalf of the Respondent. The representative contended that NCCD is not exempted specifically and is leviable even when Central Excise Duty is wholly exempted. However, the Tribunal refers to a precedent set in the case of Filatex India Ltd. vs Commissioner of Central Excise & Service Tax, Vapi 2014, where it was established that NCCD is not leviable when goods are cleared for export or captive consumption.

The Tribunal cites Circular No. 641/32/2002-CX issued by the Central Board of Excise and Customs (CBEC) which clarifies that NCCD, although levied under the Finance Act, 2001, is a duty of excise. The Circular further states that no NCCD is leviable on goods exported under bond, in line with the policy to grant relief from domestic taxes on exported goods. This position is reinforced by subsequent CBEC Circulars issued under the Central Excise Act, 1944. Additionally, in the case of M/s. Modern Petrofils v. CCE Vadodara, it was held that NCCD is not leviable on goods consumed within the country.

Based on the established legal precedents and circulars, the Tribunal concludes that NCCD is not applicable in the present case. Referring to its previous decision, the Tribunal sets aside the impugned orders and allows both appeals. The judgment emphasizes the binding nature of CBEC circulars on departmental officers and affirms that such circulars cannot be challenged in appeal. As a result, the appellants are granted relief from the levy of NCCD on the grounds of export and captive consumption, in accordance with the legal principles and precedents cited.

In conclusion, the Tribunal's decision clarifies the non-leviability of NCCD on the removal of POY for captive consumption and sale to other 100% EOUs as deemed exports during the relevant period. The judgment underscores the significance of established legal interpretations, circulars, and precedents in determining the applicability of duties such as NCCD in excise matters.