2016 (10) TMI 1143 - AT - Central Excise

Tribunal rules principal manufacturer not solely liable for NCCD, considers excise duty provisions

Commissioner of Central Excise, Tiruchirapalli Versus Kasi Works And Sakthi Snuff Company

The Tribunal dismissed both Revenue appeals in a dispute over liability for National Calamity Contingent Duty (NCCD) between a job worker and a principal ... National Calamity Contingent Duty (NCCD) - who is liable to pay NCCD-Job worker or Principal manufacturer? - Held that: - Central Excise Law being a value addition law, there was an higher amount of NCCD collected by Revenue from the hands of the principal manufacturer with the value addition of job worked goods - also, When principal duty liability was not realisable from the job worker in terms of notification benefit, realizing NCCD alone from the job worker is inconceivable since the department opted postponement of realization of excise duty till payment thereof by the principal manufacturer. Principal manufacturer is liable to pay - appeal dismissed - decided against Revenue. Issues:Dispute over liability for National Calamity Contingent Duty (NCCD) between job worker and principal manufacturer.Analysis:The judgment revolves around a dispute concerning the liability for National Calamity Contingent Duty (NCCD) between a job worker and a principal manufacturer. The respondent, claiming to be a job worker exempt from duty payment, argued that the NCCD should be discharged by the principal manufacturer. On the contrary, the Revenue contended that the job worker should be responsible for the levy. The Revenue's stance was based on the assertion that the goods manufactured by the respondent as an intermediate were dutiable, implying that the NCCD should have been collected at that stage, even though the respondent postponed payment until the principal manufacturer discharged the duty liability.Upon hearing both sides and examining the records, the Tribunal acknowledged that tax realization would have been expedited if the NCCD had been collected from the job worker initially. However, the Tribunal noted that under Central Excise Law, which operates on a value addition principle, a higher amount of NCCD had been collected by the Revenue from the principal manufacturer due to the value addition of the job worked goods. The respondent, being a job worker, argued that the principal manufacturer was allowed to discharge the ultimate excise duty liability under the law, thereby exempting the job worker. Given that the principal duty liability was not recoverable from the job worker due to notification benefits, the Tribunal found it illogical to solely realize the NCCD from the job worker, especially when the department had chosen to postpone the excise duty realization until payment by the principal manufacturer.Consequently, the Tribunal concluded that there was no need to prolong the matter unnecessarily and dismissed both Revenue appeals. As a result of the appeal dismissal, the cross objection filed by the respondent was also deemed disposed of. The judgment highlights the application of excise duty provisions, the distinction between job worker and principal manufacturer liabilities, and the significance of notification benefits in determining duty payment responsibilities in such scenarios.