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2020 (4) TMI 357 - HC - CustomsComputation of Brand rate of Drawback - Nature of NCCD - section 129A(1)(b) of the Customs Act, 1962 - Whether NCCD levied under section 134 of the Finance Act, 2003, is a customs duty and whether NCCD can be considered for computing brand rate eligibility? HELD THAT - Section 75 of the Act provides for allowing of a drawback of duties of customs chargeable under that Act on any imported materials of a class or description used in manufacture or processing of such goods or carrying out any operation on such goods. Sub-section (15) of section 2 of the Customs Act defines duty to mean a duty of customs leviable under that Act. Section 12 of the Customs Act provides that except as otherwise provided in that Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from, India - we are not concerned with an exemption notification but as to whether NCCD can be considered for computing brand rate eligibility. Applicability of the Drawback Rules to NCCD - N/N. 4/2019-Cus. (Instruction) dated 11.10.2019 - HELD THAT - There are similar provisions relating to NCCD as in the case of Secondary and Higher Education Cess. Vide Circular No.4/2019 Cus. (Instruction) dated 11th October, 2019, the CBEC has issued certain clarifications, whereby it has been clarified that section 136 of the Finance Act, 2007 which levies Secondary and Higher Education Cess (SHE), and section 110 of the Finance Act, 2018 which levies Social Welfare Surcharge (SWS), as a duty of Customs provide that the rules and regulations made thereunder including those relating to refunds, exemptions etc. shall apply to these levies. Further, these cesses are factored in the calculation of all industry rates of duty drawback by the Drawback Committee. Reference can be made to a Circular No. 106/95-Cus. dated 11.10.1995, wherein, the CBEC has clarified that anti-dumping duty which is leviable under section 9A of the Customs Tariff Act, read with section 12 of the Customs Act, is rebatable as drawback in terms of section 75 of the Customs Act. Since, anti-dumping duty is not taken into consideration while fixing all-industry rate of drawback, the drawback of such anti-dumping duty can only be claimed under an application for brand rate under rule 6 or rule 7 of the Customs and Central Excise Duties Drawback Rules, 1995 - in the case of anti-dumping duty, the Board has clarified that it is rebatable as drawback in terms of section 75 of the Customs Act. Section 75 provides for allowing a drawback of the duties of customs chargeable under that Act. Since the NCCD has not been taken into consideration while fixing all-industry rate of drawback, like in the case of anti-dumping duty as provided in Circular No.106/95-Cus dated 11th October, 1995, the drawback of such NCCD can only be claimed under an application for brand rate under rule 6 or rule 7 of the Drawback Rules. In this case the respondent has made an application for fixing the brand rate of duty drawback under rule 6 of the Drawback Rules. Therefore, in the light of the stand taken by the CBEC in the clarificatory circulars referred to hereinabove, the application made by the respondent under rule 6 of the Drawback Rules, ought to have been taken into consideration - this court is in agreement with the view adopted by the Commissioner (Appeals) in holding that since NCCD is a duty of customs, drawback thereof is admissible. Answered in affirmative, that is, in favour of the respondent and against the revenue - Appeal dismissed.
Issues Involved:
1. Whether National Calamity Contingent Duty (NCCD) is a duty of Customs. 2. Whether the Tribunal was correct in holding that an appeal on the inclusion of NCCD for computation of Brand rate of Drawback is not maintainable. 3. Whether inclusion of NCCD for computation of Brand rate of Drawback relates to "payment of drawback" under the exception clause of the Customs Act. 4. Whether an appeal relating to the inclusion of NCCD for computation of Brand rate of Drawback lies before the Tribunal under section 129A of the Customs Act. 5. Whether NCCD can be considered for computing brand rate eligibility under the Drawback Rules. Detailed Analysis: 1. Whether National Calamity Contingent Duty (NCCD) is a duty of Customs: The court examined Section 134 of the Finance Act, 2003, which describes NCCD as a duty of customs. Section 12 of the Customs Act, 1962, includes duties levied under any other law for the time being in force, thus encompassing NCCD as a duty of customs. The court referred to various provisions and circulars, including the CBEC Circular No.4/2019, which clarified that levies like NCCD are subject to the provisions of the Customs Act and should be factored into the brand rate of duty drawback. Therefore, NCCD is considered a duty of customs. 2. Whether the Tribunal was correct in holding that an appeal on the inclusion of NCCD for computation of Brand rate of Drawback is not maintainable: The court did not delve into this issue as no submissions were made regarding the maintainability of the appeal under section 129A of the Customs Act. The court left this question open for future consideration in other matters. 3. Whether inclusion of NCCD for computation of Brand rate of Drawback relates to "payment of drawback" under the exception clause of the Customs Act: The court did not address this issue directly due to the lack of submissions on this point. It focused on the primary question of whether NCCD is a duty of customs and its inclusion in the computation of the brand rate of drawback. 4. Whether an appeal relating to the inclusion of NCCD for computation of Brand rate of Drawback lies before the Tribunal under section 129A of the Customs Act: Similar to the second issue, the court did not provide a detailed analysis on this point due to the absence of submissions. This question remains open for future adjudication. 5. Whether NCCD can be considered for computing brand rate eligibility under the Drawback Rules: The court analyzed the provisions of Section 75 of the Customs Act, which allows for a drawback of duties of customs chargeable under the Act on imported materials used in the manufacture of exported goods. The court noted that NCCD, being a duty of customs, is eligible for drawback. The CBEC Circular No.4/2019 and earlier circulars clarified that levies like NCCD, which are subject to the provisions of the Customs Act, should be included in the calculation of the brand rate of duty drawback. The court concluded that the Additional Commissioner of Central Excise was not justified in excluding NCCD from the computation of the brand rate eligibility. The Commissioner (Appeals) correctly held that NCCD, being a duty of customs, is eligible for drawback. Conclusion: The court affirmed that NCCD is a duty of customs and should be considered for computing brand rate eligibility under the Drawback Rules. The appeal was dismissed, and the civil application for stay was disposed of accordingly.
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