2018 (8) TMI 544 - AT - Central Excise

Benefit of exemption from payment of National Contingent Calamity Duty (NCCD) on the POY - Captive consumption of POY - Whether the NCCD is payable on POY captively consumed or exempted from payment of duty by virtue of N/N. 67/1995-CE dated 16.03.1995, as amended? Held that - In the present N/N. 67/95 CE, NCCD has not been mentioned allowing exemption from duty. Therefore, following the principle, in the context of N/N. 50/2003 CE, which is in pari materia with N/N. 67/95CE, it can be safely inferred that exemption from NCCD cannot be extended to POY captively consumed - the decision in the case of M/S. BAJAJ AUTO LIMITED VERSUS UNION OF INDIA AND THREE OTHERS 2014 (11) TMI 616 - UTTARAKHAND HIGH COURT , followed, where it was held that Exemption granted by a notification must be read limited to the duty of excise as mentioned in the notification, and by simple interpretation it cannot be extended to cover any other kind of excise duty. The Respondent are not eligible to the benefit of exemption N/N. 67/1995-CE dt.16.3.1995 from NCCD, on captive consumption of POY. Appeal allowed - decided in favor of Revenue.

Summary

Issues:
1. Whether NCCD is payable on POY captively consumed or exempted from payment of duty by virtue of Notification No. 67/1995-CE dated 16.03.1995, as amended.

Analysis:
1. The case involves an appeal against an order passed by the Commissioner (Appeals-I), Central Excise - Ahmedabad, regarding the non-payment of National Contingent Calamity Duty (NCCD) on POY captively consumed during a specific period. A demand notice was issued to the Respondent for recovery of the duty, and after adjudication, the demand was confirmed with interest and penalty imposed. The issue revolves around whether the Respondent is eligible for exemption from payment of NCCD on the POY consumed captively, as per Notification No. 67/1995-CE dated 16.03.1995.

2. The Ld. AR for the Revenue argued that NCCD is not exempted for captively consumed POY under Notification No. 67/1995-CE, as it is levied separately and not specifically mentioned in the exemption notification. He cited relevant case laws and judgments to support his contention. On the other hand, the Respondent's consultant argued that NCCD is not chargeable on POY consumed captively based on previous Tribunal judgments and the principle that when basic excise duty is exempted, surcharges like NCCD should also be exempted.

3. The Tribunal analyzed the provisions of Notification No. 67/1995-CE and the arguments presented by both sides. It considered the nature of NCCD as a surcharge separately levied and not included in the exemption notification. The Tribunal also referred to judgments by the Hon'ble Supreme Court and High Courts regarding the interpretation of exemption notifications and the applicability of surcharges when basic duties are exempted.

4. Ultimately, the Tribunal held that the Respondent is not eligible for exemption from NCCD on the captive consumption of POY under Notification No. 67/1995-CE. It relied on the principle laid down by the Hon'ble Uttarakhand High Court and the Delhi Bench in similar cases, emphasizing that exemptions granted under specific notifications cannot be extended to cover other types of excise duties. The conflicting decisions of the Tribunal in previous cases were also considered, leading to the conclusion that the Revenue's appeal is allowed, setting aside the impugned order.

In conclusion, the judgment clarifies the applicability of NCCD on captively consumed POY and highlights the importance of specific exemptions under relevant notifications in determining the liability for additional duties like NCCD.