NCCD not leviable on captive consumption or clearances to 100% export-oriented units, with demand and penalties set aside.

NCCD was held not leviable on clearances of partially oriented yarn for captive consumption, the Tribunal treating the issue as settled and accepting the existing legal position that the levy could not survive on such removals. The same principle was applied to clearances made to 100% export-oriented units, following the ratio relied on for analogous exempt clearances, and the levy was again negatived. As a result, the demand for NCCD, together with interest and penalties, did not survive and consequential relief followed.

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Issues: (i) Whether NCCD was leviable on clearance of partially oriented yarn for captive consumption. (ii) Whether NCCD was leviable on clearance of partially oriented yarn to 100% export-oriented units.

Issue (i): Whether NCCD was leviable on clearance of partially oriented yarn for captive consumption.

Analysis: The issue was treated as no longer res integra, and the Tribunal accepted the settled view relied upon for captive consumption clearances. The reasoning proceeded on the basis that the levy of NCCD did not survive on such clearances.

Conclusion: NCCD was not leviable on clearance for captive consumption.

Issue (ii): Whether NCCD was leviable on clearance of partially oriented yarn to 100% export-oriented units.

Analysis: The Tribunal applied the ratio of the decision relating to clearances under Notification No. 108/95-CE dated 28.8.95 and held that the same principle governed clearances to 100% export-oriented units. On that basis, the levy of NCCD on such clearances was negatived.

Conclusion: NCCD was not leviable on clearance to 100% export-oriented units.

Final Conclusion: The demand of NCCD, interest, and penalties did not survive and the appeal succeeded with consequential relief.

Ratio Decidendi: Where the settled legal position excludes NCCD on the relevant category of clearances, the levy cannot be sustained on either captive consumption clearances or analogous clearances to 100% export-oriented units.

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