TMI Blog2017 (2) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... dits towards the liability for NCCD Education Cess and Secondary Higher Education Cess - appeal dismissed - decided against appellant. - Ex. Appeal No. 3575, 3983 of 2010, Ex. Appeal No. 1042 of 2012, Ex. Appeal No. 56758 of 2013 & 56585 of 2013 And Excise Appeal No.3890 of 2010 - A/50208-50213/2017-EX[DB] - Dated:- 11-1-2017 - Mr. (Dr.) Satish Chandra, President And Mr. V. Padmanabhan, Member (Technical) Sh. S. Ganesh, Sr. Advocate with Sh. Mukul Chandra, Advocate for the assessee. Sh. Yogesh Agarwal, AR for the Revenue. Per: (Dr.) Satish Chandra: The present appeals have been filed against the Orders-in-original dated 30.07.2010, 30.08.2010, 07.01.2013 dated 20.122012 passed by the Commissioner of Customs Central Excise, Meerut. 2. Brief facts of the case are that the appellants are engaged in the manufacture of two wheelers in their factory located at Haridwar (Uttarakhand). During the relevant period, they were enjoying the area based exemption under Notification No. 50/2003-CE dated 10.06.2003. The dispute relates to the demands raised on the appellant in respect of payment of National Calamity Contingent Duty (NCCD) for different periods. NCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of- (a) any duty of excise on any final product; or (b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or (c) an amount equal to the CENVAT credit taken on capital goods if such capital goods are removed as such; or (d) an amount under sub-rule (2) of rule 16 of Central Excise Rules, 2002; or (e) service tad on any output service: Provided that while payment duty of excise or service tax, as the case may be, the CENVAT credit shall be utilised only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty or tax relating to that month or the quarter, as the case may be: Provided further that the CENVAT credit of the duty, or service tax, paid on the inputs, or input services, used in the manufacture of final products cleared after availing of the exemption under the following notifications of Government of India in the Ministry of Finance (Department of Revenue),- (i) No.32/99-CE, dated the 8 th July, 1999 (G.S.R. 508(E), dated the 8 th July, 1999]; (ii) No. 33/99-CE, dated the 8 th July, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7). 17. Rule 3 (7) limits the utilisation 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 utilised 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 utilisation of CENVAT credit obtained to a particular statute and for utilisation for payment of duty under that statute only. The converse, however, does not follow. That is to say that merely because CENVAT credit in respect of NCC duty can be utilised only for payment of NCC duty, it does not follow that any other credit of duty cannot be utilised for payment of NCC duty . 5. Ld. Counsel also mentioned that the claim of the appellant was denied by the lower authorities by resorting to use of the Rule 6 of the Cenvat Credit Rules, 2004. He submits that the exempted goods have been defined in Section 2(d) as under: (d) exempted goods means excisable goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to Nil rate of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that Rule 6 of the Cenvat Credit Rules, does not permit taking of cenvat credit if the final products manufactured are exempted goods/ exempted services in the case of the appellant. Ld. DR submitted that the goods manufactured by the appellant are exempted goods inasmuch as no excise duty is payable in view of the area based exemption Notification No. 50/2003. He finally submitted that since the cenvat credit is not allowed to be taken under Rule 6 of the Cenvat Credit Rule, the appellant will not be entitled to utilise such credits to discharge the liability in respect of NCCD, Education Cess, Secondary Higher Education Cess. 8. Heard both sides, perused records. Notification No. 50/2003 dated 10.06.2003 in question grants exemption to goods other than specified goods. There is no dispute that the manufacturing unit of the appellants is situated in one such area and entitled to exemption. The dispute however, is with reference to whether the appellant is liable to pay NCCD, Education Cess and Secondary Higher Education Cess inspite of the exemption notification mentioned above. NCCD has been levied under Section 136 of the Finance Act, 2001. The Education Cess as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 above, it is quite clear that NCC duty is nothing but a duty of excise and on this, learned counsel for both parties are ad idem. 5. Notification No. 32/99-C.E. relates to exemption to North East States from excise duty and additional excise duty on goods cleared from certain units. This Notification has been issued in exercise of powers conferred by sub-section (1) of Section 5A of the Excise Act read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and subsection (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. By virtue of this notification the Central Government has exempted goods specified in the First and Second Schedules to the Central Excise Tariff Act from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently, the notification provides for refund of the excise duty paid on such finished products. What is of significance to note is that the finished products cleared under Notification No. 32/99 are not exempted goods but are liable to duty which, in terms of the notification, are refunded back to the manufacturer. The mechanism of Notification No. 50/2003 which has been availed by the appellant is entirely different. In the above notification, the manufacturer such as the appellant, is not required to pay any excise duty at the time of clearance of the goods. Consequently, the goods manufactured and cleared by the appellant satisfies the definition of exempted goods under Section 2(d). Once the final products manufactured are exempted goods, then there is a bar in availing cenvat credit on the inputs/ input services in terms of Rule 6 of the Cenvat Credit Rules, 2004. In view of the above discussion, the appellant will not be entitled to avail the cenvat credit of duties paid on the inputs. Consequently, there is no question of set-off of such credits towards the liability for NCCD Education Cess and Secondary Higher Education Cess. 12. By considering the totality of the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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