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2022 (7) TMI 139 - AT - Central ExciseExtended period of Limitation - Levy of National Calamity Contingent Duty (NCCD) - POY falling under Chapter 5402 - demand on the ground that Notification No. 67/95-CE dated 16.03.1995 does not exempt from payment of NCCD - demand alongwith Interest and penalty - HELD THAT - The case can be decided on the ground of limitation itself. The issue involved is of levy of NCCD in respect of Partially Oriented Yarn falling under Chapter 5402 consumed captively for the manufacture of Polyester Texturised Yarn. On the said issue, there are number of judgments as cited by the appellant and some of the judgments are in favour of the appellant. The issue involved is a neat question of law which involved interpretation of exemption provided in respect of NCCD. It is also a fact on record that appellant have declared their manufacturing process to the department and they were filing ER-1 returns regularly. Since the activity of entire manufacturing i.e. right from the polyester chips stage to the final stage i.e. Polyester Texturised Yarn including the manufacture of intermediate goods on job work basis were in the knowledge of the department, it cannot be said that there is any suppression of fact on the part of the appellant. In respect of the entire demand which is for the period from 01.07.2003 to 31.07.2004, the show cause notice was issued on 31.07.2008. The entire period is beyond one year, hence the demand under proviso to Section 11AC is not sustainable. The demand is hit by limitation hence the impugned order is set-aside - the appeal is allowed only on limitation without going into merits of the case.
Issues:
Levy of National Calamity Contingent Duty (NCCD) on Partially Oriented Yarn (POY) falling under Chapter 5402 used captively for the manufacture of Polyester Texturised Yarn. Analysis: The case involved the appellant engaged in manufacturing Polyester Texturised Yarn using POY procured from job workers. The department demanded NCCD on the POY used captively, which was upheld by the Commissioner (Appeals), leading to the appellant's appeal. The appellant argued that NCCD was not payable on goods under Chapter 5402, citing relevant judgments. They contended that the demand was time-barred, as the show cause notice was issued beyond one year for the period in question. The appellant highlighted their regular filing of ER-1 returns and the department's awareness of their manufacturing process. They also mentioned paying NCCD through excise duty credit, referencing settled cases. The issue was primarily one of interpretation of the exemption provided for NCCD. The Revenue reiterated the impugned order's findings. The Tribunal examined the case, focusing on the limitation aspect. They noted the issue of levying NCCD on POY used for manufacturing Polyester Texturised Yarn and the relevant judgments favoring the appellant. Considering the appellant's disclosure of their manufacturing process and regular ER-1 filings, the Tribunal found no suppression of facts. As the show cause notice for the demand period exceeded one year, the demand under Section 11AC's proviso was deemed unsustainable due to limitation. Consequently, the impugned order was set aside, and the appeal allowed solely on limitation grounds, without delving into the case's merits. The judgment, pronounced on 04.07.2022 by the Appellate Tribunal CESTAT Ahmedabad, highlighted the importance of the limitation aspect in deciding the case. The Tribunal's analysis focused on the interpretation of the NCCD exemption and the appellant's compliance with disclosure requirements and regular filings. By emphasizing the lack of suppression of facts and the time-barred nature of the demand, the Tribunal concluded in favor of the appellant solely on limitation grounds, setting aside the impugned order.
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