2019 (10) TMI 490 - AT - Central Excise

Levy of NCCD - clearance of Polyster Filament Yarn to 100% EOU for captive consumption - rule 19 of the Central Excise Rules, 2002 - HELD THAT - The Hon ble Apex Court in case of BAJAJ AUTO LIMITED VERSUS UNION OF INDIA OTHERS 2019 (3) TMI 1427 - SUPREME COURT has held that exemption of excise duty would be applicable to NCCD also as the same is surcharge. The demand of NCCD on goods cleared for captive consumption and to 100% EOU is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Applicability of National Calamity Contingent Duty on Polyster Filament Yarn cleared to 100% EOU and for captive consumption.

Analysis:
The appeal revolved around the non-payment of National Calamity Contingent Duty (NCCD) on Polyster Filament Yarn cleared to 100% Export Oriented Unit (EOU) and for captive consumption during a specific period. The Appellant received a show cause notice for the recovery of the duty, leading to the confirmation of the demand against them through the impugned order dated 29.06.2009, prompting the appeal.

The counsel for the revenue argued that the supplies to 100% EOU were akin to exports under Bond as permitted by rule 19 of the Central Excise Rules, 2002. He cited various judgments to support his stance, including cases involving Filatex India Ltd., JBF Industries Ltd., Modern Petrofils, and Tata Trucks India Ltd. Furthermore, he contended that clearances to EOU were exempted under Notification No. 22/2003-CE dated 01.03.2003. Regarding clearance for captive consumption, he relied on Notification No. 67/95-CE dated 16.03.1995, asserting its applicability to NCCD as a surcharge, akin to excise duty. The counsel cited judgments like Bajaj Auto Ltd., SRD Nutrients Pvt. Ltd., and Banswara Syntex Ltd. to bolster his argument.

In contrast, the Special Counsel for the revenue contended that the exemption did not apply, supporting the impugned order's stance that the exemption notification did not extend to NCCD. The revenue's position was backed by previous tribunal decisions in cases involving Superfine Syntex Pvt. Ltd. and Paras Petrofils.

Upon hearing both sides and examining the records, the tribunal concluded that the issue had been settled by previous judgments referenced by the Appellant's counsel. Citing the Supreme Court's decision in the case of M/s Bajaj Auto Ltd., the tribunal held that the exemption from excise duty would also apply to NCCD, considering it a surcharge. Relying on the judgments presented by the Appellant's counsel, the tribunal deemed the demand for NCCD on goods cleared for captive consumption and to 100% EOU as unsustainable.

Consequently, the tribunal set aside the impugned order and allowed the appeal, granting consequential reliefs to the Appellant. The judgment was pronounced in open court on 26.06.2019.