2014 (11) TMI 72 - AT - Central Excise

Clearance to 100% EOU - exemption from NCCD - Exemption under Notification No. 22/2003-C.E., dated 31-3-2003 - clearance of POY to job worker for manufacture of grey fabrics - Held that - Circular No. 641/32/2002-CX, dated 26-6-2002 was followed by C.B.E. & C. Circulars 60/1/2006-CX, dated 13-1-2006 and 232/16/2004-CX, dated 30-1-2006, issued under Section 37B of the Central Excise Act, 1944 - With respect to chargeability of NCCD on captive consumption of goods, it has been held that NCCD is not leviable. In view of the latest view point held by this Bench NCCD is not payable by the appellant. Secondly, C.B.E. & C. circulars issued on an issue are binding on the departmental officers and cannot be challenged in appeal - Decided in favour of assessee.

Summary

Issues:
1. Whether NCCD is leviable on clearances to 100% EOU under Notification No. 22/2003-C.E.
2. Whether duty is payable on clearances of POY to job workers for manufacturing grey fabrics.

Analysis:
1. The main appellant, a manufacturer of POY, was availing exemption under Notification No. 22/2003-C.E. for clearances to 100% EOU. The Revenue contended that NCCD is leviable as the exemption does not cover NCCD. The appellant argued that NCCD cannot be demanded for goods ultimately exported, citing relevant legal provisions and Circular No. 641/32/2002-CX. The Tribunal referred to Circular No. 641/32/2002-CX and held that NCCD is not payable on goods exported under bond. The appellant's appeal was allowed based on the latest view held by the Tribunal and the binding nature of circulars on departmental officers.

2. Regarding clearances of POY to job workers for manufacturing grey fabrics, the appellant relied on Rule 4(5)(a) of the Cenvat Credit Rules to argue that no duty is payable. The Revenue defended the orders passed by the adjudicating authority and cited a judgment in a similar case. The Tribunal considered the arguments from both sides and referred to a previous judgment by the same Bench in a related case. The Tribunal held that NCCD is not leviable on captive consumption of goods, as per the precedent set by the Tribunal in a previous case. The appeals filed by the appellant were allowed based on the Tribunal's interpretation and the binding nature of circulars on departmental officers.

In conclusion, the Tribunal ruled in favor of the appellant on both issues, holding that NCCD is not leviable on clearances to 100% EOU under the relevant notification and that no duty is payable on clearances of POY to job workers for manufacturing grey fabrics based on the applicable legal provisions and precedents.