TaxTMI 
TaxTMI 
2023 (11) TMI 305
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.... of National Calamity Fund. 2. On verification of records of the appellant, it was found that they have manufactured and cleared Dumper trucks and Dumper trucks without body (Chassis with Cabin) and classified the goods under CTEH 87041010 and 87060043 respectively. On further enquiry, it revealed that the Dumper Truck was manufactured by fixing the load body on the chassis with cabin. According to the department, the chassis is thus captively consumed in the production of final product, viz., Dumper Truck. However, no NCCD was paid by the appellant in respect of the Chassis captively consumed in the production of Dumper Trucks. While chassis are fully exempt from excise duty vide notification no. 67/95-CE dated 16/03/1995, there is no exemption in respect of NCCD. The department was of the view that as there is no exemption from payment of NCCD, as per notification 67/95, the appellant is liable to pay NCCD in respect of chassis, the intermediate product which is captively consumed. 3. The appellant was issued Show Cause Notice dated 28/10/2014 proposing to demand the short-paid amount being NCCD on the value of dumper chassis captively consumed in the manufacture of dumper ....
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....n to any other duties of excise chargeable on such goods under the Central Excise Act, 1944 or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty, shall, as far as may be, apply in relation to the levy and collection of the National Calamity duty leviable under this section in respect of the goods specified in the Seventh Schedule as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be. 5.2. The demands are confirmed alleging that during the manufacture of Dumper Trucks by the appellant, Dumper chassis are emerging as an intermediate product, which is classifiable under heading 8706 0043 on which NCCD is payable and the benefit of exemption available for Excise Duty under Notification 67/95 C.E. Dt. 16.03.1995 is not applicable to NCCD. 5.3. The Ld. counsel submitted that the benefit of exemption under Notification 67/95- CE is available for the whole duty of excise leviable thereon which is specified in the schedule to the....
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.... manufacture. In this connection, the Ld. counsel for appellant submitted that from the photographs furnished before the Court, it can be seen that, what is being treated as Chassis by department has all the essential character of the finished product, the Dumper. Only the body is absent. In this connection, the Ld. counsel invited our attention to Note 2 (a) of the General Rules of Interpretation to the Central Excise Tariff, which is reproduced below. 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. 6.2. Accordingly, since the dumper without body has all attributes and essential character of the finished product viz; Dumper, the same shall merit to be considered only as Dumper. The fact that the appellant had described the same as "Chassis" whenever such Dumpers wit....
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....03.2005 has been issued to rectify some anomalies in the excise duty rates, in exercise of the powers conferred under Section 3 (1) of the Central Excise Tariff Act. Vide the said notification, the above said Note 3 of Chapter 87 was substituted as 3. Heading 8706 shall include chassis, whether or not fitted with a cab. 8.2. From Section 3 it can be seen that under the emergency powers available to the Central Government, the only amendment that is possible is change in the rate of duty of excise as specified in the First Schedule and Second Schedule to the Act and an amendment by way of substitution of a new Chapter note is not at all contemplated in the said section. Hence the amendment carried out in Chapter Note 3 of Chapter 87, vide Notification 14/2005 C.E. Dt. 07.03.2005 is ultra vires of Section 3 (1) of the Central Excise Tariff Act and hence non est. As per the unamended Note 3 of chapter 87, the subject goods merit classification only under Chapter 8704. Hence, the demand of NCCD by classifying the subject goods under chapter 8706 is not at all sustainable. 8.3. In the impugned order, the Commissioner has held that the exemption under Notification 67/95 ibid is ....
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....other place in India; or (ii) by a hundred per cent export-oriented undertaking and brought to any other place in India. Explanation. --In this proviso, ["free trade zone" and hundred per cent export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of Section 3. (1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods. (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from the payment of duty of excise, under circumstances of an exceptional nature to be stated in such order, any excisable goods on which duty of excise is leviable. (2A) The Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert ....
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....he context otherwise requires, references to the expressions "duty"," duties", "duty of excise" and "duties of excise" shall be construed to include a reference to "Central Value Added Tax (CENVAT)" 9.3. It may be observed that contrary to the exhaustive definition of the term "duty" under Rule 2 (v) of the old Central Excise Rules (which was considered by the Hon'ble Supreme Court in Modi Rubber Case), the term "duty of excise" used in Section 5A of the Act has an inclusive definition, the scope of which is not limited to basic excise duty levied under Section 3 alone. Once NCCD is declared as a "duty of excise" under Section 136 (1) of the finance Act, 2001, the power to grant exemption from the levy of NCCD can be traced back to Section 5A of the Central Excise Act, 1944 and there is no necessity to draw such power from Section 136 (3) of the Act. Hence the ratio of the Hon'ble Supreme Court in the case of Modi Rubber Ltd., (supra) is not applicable to the case in hand, in view of the change in law. Further, in the case of Tatra Trucks India Ltd., (supra) the decision of the Hon'ble Supreme Court in Modi Rubber Ltd. has been considered by Tribunal and distinguished. For the s....
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....ch was levied as a duty of excise, in the case of CCE Vs Renuga Sugars Ltd. 2014 (302) ELT 33 (Kar.), it was held that even though such Sugar Cess is not specifically mentioned under Rule 3 of the CENVAT Credit Rules, 2004, since it is levied as a duty of excise, credit of the same is admissible. When the said decision was cited for a similar claim for CENVAT Credit of Clean Energy Cess paid on coal, the Hon'ble CESTAT, Hyderabad, in the case of Deccan Cements Ltd. Vs CCE - 2020 (371) ELT 795 (Tri-Hyd.) has distinguished the decision of the Karnataka High Court in the context of Sugar Cess, as below. 14. We have also considered the argument of the appellants that the ratio of judgment of Hon'ble High Court of Karnataka in the case of Shree Renuka Sugars (supra) not being overturned by any superior judicial forum, must apply. On going through the judgment of the Hon'ble High Court of Karnataka, we find that in that case the entire Central Excise Act and Rules were applicable to sugar cess but in the case of CEC, only some provisions of Central Excise Act have been made applicable. Section 37 of the Central Excise Act under which the CCR, 2004 as well as other Rules are framed are....
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.... cannot be said that NCCD is also not payable. The levy of NCCD is a surcharge to excise duty. When there is no express exemption from payment of NCCD, the appellants cannot claim any exemption from payment of NCCD by inferring that NCCD is the duty of excise and therefore is also exempted. 14. The very same issue was decided by the Tribunal in the case of Paras Petrofils Ltd. Vs. CCE, Surat- 2009 (237) ELT 367 (Tribunal) Ahmedabad and Superfine Syntex Pvt. Ltd. Vs CCE, Surat- 2009 (237) ELT 292 (Tribunal)Ahmedabad. In both the above cases the Tribunal has held that in the absence of inclusion of exemption of NCCD in the notification no.67/95 and in view of the similarity between Section 136 and Section 3 (3) of both the enactments, the assessee is liable to pay NCCD on captively consumed goods. The decision in the case of Union of India Vs. Modi Rubber Ltd. 1986 (25) ELT 849 (SC) was relied by the Ld. AR to argue that in the said case the Hon'ble Apex Court held that exemption of duty of excise did not mean exemption from Special excise duty, Additional excise duty or Ancillary duty also. In a later decision the Hon'ble Apex Court in the case of Unicorn Industries Vs. Union of ....
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....inuous assembly line of manufacture, only dumpers, emerge as final product and there is no identifiable and marketable intermediate product as chassis available for captive consumption. To support this argument, the Ld. Counsel has relied on the decision of the Tribunal in the case of CCE, Mysore Vs Bharat Earth Movers Ltd. 2010 (261) ELT 596 (Tri.-Bang). In the said case, after analyzing the entire process of manufacture of dumpers, the Tribunal upheld the findings of the adjudicating authority that at no stage, an intermediate product of Drive-away chassis emerges. The issue in the case is the very same issue as to the leviability of NCCD on the alleged chassis in the course of manufacture of dumpers. The relevant paras read as under: "8.2 It can be seen from the above reproduced findings, after the verification and considering the process of manufacture and flow chart, the Adjudicating Authority came to the conclusion that the items which come into existence at a particular stage, i.e. stage 4, cannot be called as Drive away Chassis. He also placed reliance on the clarification given by the Mysore Chamber of Commerce Industry i.e. on the basis of findings available at t....
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.... of Notification No. 67/95-C.E. and accordingly granted the benefit of exemption to the assessee. At present, the assessee is aggrieved by the concurrent view taken by the lower authorities to the effect that their product is dumper chassis and not dumper. The Revenue is challenging the grant of exemption under Notification No. 67/95-C.E. to the assessee in respect of NCCD. 2. After hearing both sides and considering the case law cited by them, we find that the question whether NCCD is a duty of excise for purposes of Exemption Notifications issued under Section 5A of the Central Excise Act has been considered and answered in the affirmative in Toyota Kirloskar Motor Pvt. Ltd. v. CCE, Bangalore [2007 (217) E.L.T. 403 (Tribunal) = 2001 (82) RLT 828 (CESTAT - Ban.)], wherein the benefit of Notification No. 108/95-C.E. dated 28-8-1995 was held to be admissible to NCCD leviable under Section 136 of the Finance Act, 2001. We agree with that decision, which was rendered after examining the relevant provisions of the Finance Act and considering a Circular of the CBEC. The contention raised by the Revenue that NCCD is only a surcharge and not a duty of excise cannot be accepted. T....
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....gations, the department ought to have verified and collected details from the factory of the appellant regarding the assembly line of manufacture and the stages at which intermediate product if any, emerges, and whether reliance placed by appellant on the facts of Bharat Earth Movers is different as contented by them in their reply to SCN. 16.6. The reason in the impugned order to hold that an intermediate marketable product emerges is not based on the process/ stages of manufacture. The reason is that the appellant while making some exports had described the product as "chassis with cabin assembly" in the export documents. The exigibility to duty of a product cannot merely be based on how the assessee described the product in a document. In case of dispute, the department has to clearly state in the SHOW CAUSE NOTICE the nature, classification and dutiability of the product. The Tribunal in the case of Bharat Earth Movers Ltd. (supra) has categorically held that the demand of NCCD cannot sustain as there is no intermediate, identifiable and marketable product viz. Dumper chassis emerging in the process of manufacture of dumpers. The issue as to whether NCCD is payable on dumper....
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.... the appellant would not be liable to pay the NCCD. The relevant paras read as under: "22. We may notice that this Court, in SRD Nutrients Pvt. Ltd. (supra)gave its imprimatur to the view expressed by the Rajasthan High Court in Banswara Syntex Ltd. (supra). The rationale is that while there may be surcharges under different financial enactments to provide the Government with revenue for specified purposes, the same have been notified as leviable in the nature of a particular kind of duty. In the case of NCCD, it is in the nature of an excise duty. It has to bear the same character as those respective taxes to which the surcharge is appended. NCCD will not cease to be an excise duty, but is the same as an excise duty, even if it is levied on the product. Thus, when NCCD, at the time of collection, takes the character of a duty on the product, whatever may be the rationale behind it, it is also subject to the provisions relating to excise duty, applicable to it in the manner of collection as well as the obligation of the taxpayer to discharge the duty. Once the excise duty is exempted, NCCD, levied as an excise duty cannot partake a different character and, thus, would be e....
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....m period of two months from the receipt of copy of this order. 6. The appeals are accordingly allowed." Against this order of Apex Court dated 30.04.2019, the Revenue had filed Review petition before Apex Court as M.A. No.1675/2021, and the same was dismissed as reported in Commissioner Vs Hero Motor Corporation Limited 2023 (383) ELT A 33 (S.C). 16.12 . Again, in the case of Unicorn Industries Vs UOI 2019 (370) ELT 3 (S.C) the issue under consideration was whether the exemption granted by notification no.71/2003-CE (which is an area-based exemption notification for North Eastern states) would also apply to Education Cess, Secondary and Higher Education Cess imposed by Finance Acts 2004 to 2007 in the nature of duty of excise and also to NCCD. The exemption granted vide the said notification is such that, the manufacturer has to first utilise the CENVAT Credit for discharging duty liability on final products and the remaining amount of duties had to be paid through Personal Ledger Account (PLA) or Current Account i.e., in Cash. Thus, the exemption scheme of this notification is in the nature, that the duty has to be first discharged on the final product, and then cla....
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....t of domestic taxes on goods, which are exported. Accordingly, it is clarified that noNCCD leviable under Section 129 of Finance Act, 2001 to be paid on the goods exported under bond. No doubt if export does not eventually take place the goods would be subject to all duties of excise including NCCD as applicable. 3. The field formations may suitably be informed. 4. Receipt of this Circular may please be acknowledged. 16.14. The Tribunal in the case of Modern Petrofills Ltd. Vs Commissioner - 2009-TIOL-515-CESTAT MUMBAI (date of decision 3.12.2008) had considered the issue whether the benefit of exemption under notification 108/95-CE dt. 28.8.95 is available to NCCD also. The Tribunal answered in the affirmative, and held that NCCD is not leviable in respect of clearances for captive consumption. The said decision was followed in J.B.F. Industries Ltd. Vs Commissioner, Vapi 2009 (246) ELT 286 (Tri.-Ahmd) as well as in the case of Nava Petrochemicals Ltd. Vs CCE, Ahmedabad - 2010 (254) ELT 165 (Tri.-Ahmd). From the above, it can be seen that the decision passed by the Tribunal in the case of Paras Petrofills Ltd. and Superfine Syntex relied by the adjudicating au....
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....ion in the case of M/s Chiripal Industries Ltd. (supra) held as under: "1. This appeal has been filed by the Appellant with respect to OIA No.78/2007(Ahd-I), dt.27.02.2007, under which the first Appellate Authority has confirmed the OIO dt.22.11.2006 passed by the Adjudicating authority. The issue involved in the present proceedings is whether National Calamity Contingency Duty (NCCD) is leviable on Partially Oriented Yarn (POY) and FDY when used captively in the manufacture of the goods falling under CETH 54.02 exempted under Notification No.46/2003-CE, dt.17.05.2003. 2. Shri P.P. Jadeja, learned Consultant appearing on behalf of the Appellant argued that POY and FDY does not attract NCCD when captively consumed. That when POY is sold as such by the Appellant, NCCD is paid by the Appellant at the time of clearance from the factory. It was his case that the issue of leviability of NCCD during captive consumption is no more res integra and is covered by the following case laws decided by this Tribunal: a) M/s Modern Petrofils Vs CCE Vadodara-II Order No.A/2094/WZB/AHD/2011, dt. 10.06.201 1 (in Appeal No.E/2748/2006) = 2012-TIOL-132-CESTAT-AHM b) M....
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....-AHM. 5. The facts are identical and the issue is no more res integra. The decision of this Bench is as follows: 1. The appellants have challenged the impugned order confirming the demand NCCD in respect of clearance of Partially Oriented Yarn (POY) to 100% EOU and for captive consumption with interest and penalties. 2. The learned Advocate on behalf of the appellants submits that the issue is po more res integra and submits that in respect of captive consumption, the following decisions of the Tribunal in support of his stand that NCCD is not leviable in respect of clearance for captive consumption: (i) Tatra Trucks India Ltd Vs CCE, Chennai reported in 2008 (227) ELT 269 (Tri-Chennai) = 2008-TIOL-1209-CESTAT-MUM (ii) CCE Trichy Vs Kulavi Tobacco Industry reported in 2008 (227) ELT 416 (Tri-Chennai) 3. As regards clearances to 100% EOUs, he submits that in the case of Toyota Kirloskar Motor Pvt.Ltd. Vs CCE, Bangalore reported in 2007 (217) ELT 403 (Tri Bang) = 2007-TIOL-1422-CESTAT-BANG, it was held that NCCD is not leviable in respect of goods cleared availing the benefit of Notification No. 108/95-CE, dt. 28.08.95. He submits....