Order Date: 4 July 2022

Facts:

• The appellant, Maheshwari Texturisers Limited are engaged in the manufacture of excisable goods namely Polyester Texturised Yarn falling under Chapter 5402 of Central Excise Tariff Act, 1985. For the manufacture of texturised yarn, the appellant procured polyester chips and they sent it to job workers for manufacture of intermediate goods namely Partially Oriented Yarn falling under Chapter 5402. After receipt from the job workers, the same is used captively for manufacture of their final product namely Polyester Texturised Yarn.
• The department contended that the appellant is required to pay National Calamity Contingent Duty (NCCD) in respect of POY falling under Chapter 5402 used captively, on the ground that Notification No. 67/95-CE dated 16.03.1995 does not exempt from payment of NCCD. Accordingly, duty demand of NCCD of Rs. 2, 22,741/- along with interest and equal amount of interest has been confirmed. 
• The same was upheld by the learned Commissioner (Appeals), therefore the present appeal is filed by the appellant.

Issue:

• Whether the appellant is required to pay National Calamity Contingent Duty (NCCD) in respect of Partially Oriented Yarn falling under Chapter 5402 consumed for the manufacture of Polyester Texturised Yarn?

Order:

• The Tribunal observed that the case can be decided on the ground of limitation itself. On the said issue, there are number of judgments as cited by the appellant and some of the judgments are in favour of the appellant. The issue involved is a neat question of law which involved interpretation of exemption provided in respect of NCCD. It is also a fact on record that appellant have declared their manufacturing process to the department and they were filing ER-1 returns regularly. 
• In the view of the same, activity of entire manufacturing i.e. right from the polyester chips stage to the final stage i.e. Polyester Texturised Yarn including the manufacture of intermediate goods on job work basis were in the knowledge of the department, it cannot be said that there is any suppression of fact on the part of the appellant. In respect of the entire demand which is for the period from 01.07.2003 to 31.07.2004, the show cause notice was issued on 31.07.2008. The entire period is beyond one year, hence the demand under proviso to Section 11AC is not sustainable.
• Accordingly, the demand is hit by limitation hence the impugned order is set-aside and the appeal is allowed only on limitation without going into merits of the case.