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TMI Blog2011 (6) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ice R.M.S. Khandeparkar, President (Oral)]. Heard at length the learned Advocate for the appellants and DR for the respondent. 2. This appeal arises from order dated 30-7-2010 passed by the Commissioner, Meerut. By the impugned order, the Commissioner has confirmed the demand of National Calamity Contingent Duty (hereinafter called as NCCD) amounting to Rs. 14,42,99,366/- and education and higher education cess of Rs. 43,28,981/- along with interest and equal amount of penalty while dropping the demand of education cess and secondary and higher education cess on account of automobile cess. 3. The appellants are engaged in manufacture of motorcycle availing exemption from payment of central excise duty in terms of Notification No. 50/2003-C.E., dated 10-6-2003 issued under Section 5A of the Central Excise Act, 1944 and are clearing the manufactured finished excisable goods under the exemption without payment of central excise duty including NCCD which is levied under Section 136 of the Finance Act, 2001 (as amended). Consequently, a show cause notice dated 24-4-2009 relating to the period from April 2008 to January 2009 came to be issued to the appellants for contravention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise under the Central Excise Act. In any case, it is the contention of the learned Advocate that the notification has to be construed liberally besides that the Finance Act, 2001 clearly identifies NCCD as surcharge and the same being a surcharge over the duty of excise clearly partake the character to excise duty. Hence, the Commissioner erred in denying the benefit of the said exemption notification in relation to NCCD. It was also submitted that the exemption notification is essentially from the point of view of incentives for promoting growth and development and therefore, narrow interpretation thereof is not permissible. The education cess and secondary education cess are levied on the aggregate of the duties of excise and as such NCCD is exempt, there can be no question of levy of education cess or secondary or higher education cess on the amount of NCCD. It is also sought to be contended that even assuming that the appellants are liable to pay NCCD and education cess, the appellants would equally be eligible to avail cenvat credit and hence it is a matter of revenue neutral and, therefore, there cannot be any liability to pay the duty. In any case, question of dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y following the prescribed procedure. Besides, there is question of revenue neutrality which cannot arise on the occasion to claim. Revenue neutrality can arise only in case of discharge of liability in one manner or other within the prescribed period within which the duty was payable. In case of delay in payment of duty, obviously, there is interest liability and, therefore, question of revenue neutrality cannot arise without ascertaining the exact amount of duty liability with reference to the time factor and also taking into consideration the interest liability thereon, on account of delay in payment. 8. The matter essentially relates to the claim of exemption benefit in terms of Notification No. 50/2003-C.E., dated 10-6-2003 in relation to NCCD and education cess payable on such NCCD. 9. The notification in question is on the subject of exemption to goods other than specified goods cleared from units located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area of Uttarakhand and Himachal Pradesh . There is no dispute that the production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention that in terms of Section 136(3) of the Finance Act, 2001, the NCCD is to be construed as duty of excise leviable under Central Excise Act is totally devoid of substance. Section 136(3) provides that the provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder including those relating to rules and exemption from duties and imposition of penalty, shall, as far as may be, apply in relation to levy and collection of the National Calamity duty leviable under this section in respect of goods specified in the seventh schedule as they apply in relation to levy and collection of the duty of excise on such goods under that Act or those rules as the case may be . Obviously, the provision is an enabling provision. The provision by itself nowhere provides that if by a notification, in the excise duty leviable under Central Excise Act is exempted, it would result in exemption of NCCD leviable under the Finance Act. 14. The contention that the NCCD being surcharge it would partake the character of excise duty and, therefore, would be entitled for exemption under notification is also devoid of substance. Merely because the NCCD partakes the character o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 (260) E.L.T. 308. 18. The order of the Tribunal in Nava Petrochemicals was in the stay proceedings and, therefore, it cannot be said to lay down any the law as such and, therefore,, need not be referred to. 19. In Tatra Truck India case, the question before the Tribunal was whether the product manufactured by the assessee was a dumper or dumper chassis. The Tribunal held that the product which does not have box like body has the essential character of a fully built dumper and hence goods were classifiable under sub-heading 8706.49 as dumper chassis and not under sub-heading 8704.30 as dumper. Apparently, the case related to the dispute on the point of classification of the product which is of no relevancy in the matter in hand. 20. The order in Toyota Kirloskar Motors case was undoubtedly in relation to the point whether the assessees were entitled for benefit of exemption from NCCD under the Notification No. 108/95-C.E., dated 28-8-1995. The Tribunal referring to Section 129 of the Finance Act, 2001 observed that a close reading of the above reveals that NCCD is indeed a duty of excise. Further it is seen that the provision of Central Excise Act 1944 with regard to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect thereof does not arise. However, it has been ruled that in view of the peculiar facts of the case wherein there need not appear any intention to evade the payment of duty, there was no case for imposition of penalty. Apparently, the decision was in the peculiar facts of the case. 23. In Superfine Syntex case also, the issue was relating to the applicability of Notification No. 67/95 dated 16-3-1995 to NCCD and question of imposition of penalty. In the absence of inclusion of NCCD under the notification, the benefit of exemption in respect thereof was denied while in the particular facts of the case penalty was reduced. 24. The decision in Indo Farm Tractors Motors case was relating to the dispute about the liability to pay cess leviable under Industries (Development and Regulation) Act, 1951 and education cess under Finance Act, 2004 and it was held that cess can certainly be recovered except under Automobile Cess Rules. Therein, the contention of the assessee was that the tractors manufactured by them were exempt from payment of excise duty and, therefore, no cess could be levied. While rejecting the said contention, the High Court held that the exemption notific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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