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TMI Blog2013 (11) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... cise or additional duty of excise - The general exemption has absolutely no reference to NCC duty which is levied as a surcharge under the provisions of the Finance Act, 2001 - National Calamity Contingency duty, even though it is a duty of excise, is not exempted under Notification No. 32/99 - The operation of thie notification is limited. - Decided in favor of revenue. Utilization of cenvat credit - Duty not Exempted under the Notification - Whether CENVAT credit can be utilized towards payment of National Calamity Contingency duty under the CENVAT Credit Rules – Held that:- In terms of Rule 3(1) a manufacturer or producer of a final product is allowed to take CENVAT credit of National Calamity Contingency duty – National Calamity Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is in the negative and our answer to the second part of the question is in the affirmative. 3. NCC duty is leviable under Section 136 of the Finance Act, 2001. Sub-section (1) of Section 136 of the Finance Act makes it clear that NCC duty is by way of a surcharge and is a duty of excise. NCC duty is chargeable on goods specified in Seventh Schedule of the Finance Act and is in addition to any other duties of excise chargeable on such goods under the Central Excise Act, 1944 (for short the Excise Act ). In terms of Section 136(3) of the Finance Act the provisions of the Excise Act and the Rules made thereunder relating to refunds and exemptions from duties, etc., apply in relation to the levy and collection of NCC duty. 4. From the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s levied as a surcharge under the provisions of the Finance Act, 2001. 7. Consequently, insofar as the first part of the substantial question of law framed above is concerned, it must be answered in the negative which is to say that NCC duty, even though it is a duty of excise, is not exempted under Notification No. 32/99-C.E. The operation of this notification is limited. 8. The second part of the substantial question of law would now arise, namely, whether CENVAT credit can be utilized towards payment of NCC duty under the CENVAT Credit Rules. 9. In this regard it is necessary to go through the CENVAT Credit Rules, particularly Rule 3(4) and Rule 3(7) thereof. 10. Rule 3(1) provides that a manufacturer or producer of a final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 8th July, 1999 [G.S.R. 509(E), dated 8th July, 1999]; (iii) No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001]; (iv) No. 56/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 764(E), dated the 14th November, 2002]; (v) No. 57/2002-Central Excise, dated 14th November, 2002 [G.S.R. 765(E), dated the 14th November, 2002]; (vi) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003]; and (vii) No. 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R. 717(E), dated the 9th September, 2003], shall, respectively, be utilized only for payment of duty on final products, in respect of which exemption under the said respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding anything contained in sub-rule (1) and sub-rule (4), CENVAT credit in respect of NCC duty shall be utilized only towards payment of the NCC duty under Section 136 of the Finance Act, 2001 on any final product manufactured by the manufacturer. 13. Insofar as the assessee is concerned the contention urged was that CENVAT credit in respect of NCC duty can be utilized only for payment of NCC duty. But this does not mean that CENVAT credit on basic excise duty cannot be utilized for payment of NCC duty on the final product. Simply put, the contention is that payment of NCC duty through utilization of CENVAT credit on basic excise duty is not prohibited. The question is whether this is permissible or not. According to the Revenue, CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take CENVAT credit of NCC duty. Since NCC duty is admittedly a duty of excise, Rule 3(4) provides that CENVAT credit may be utilized for payment of any duty of excise on any final product. Therefore, CENVAT credit of NCC duty may also be utilized for payment of any duty of excise on any final product in terms of Rule 3(4) subject to Rule 3(7). 17. Rule 3(7) limits the utilization of CENVAT credit in respect of NCC duty as also other duties mentioned in Rule 3(7)(b). It provides that CENVAT credit in respect of NCC duty and other duties shall be utilized towards payment of duty of excise leviable under various statutes respectively. The use of the word respectively in this regard is important inasmuch as it confines the utilization of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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