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On 30th May 2019, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) pronounced an order favouring the appeal filed by the assessee to assail the order dated 7 September 2016 passed by the Commissioner of Customs and Central Excise, Dehradun, by which the demand to pay National Calamity Contingent duty (hereinafter referred to as „NCCD‟), Education Cess (hereinafter referred to as „EC‟) and Secondary and Higher Education Cess (hereinafter referred to as „SHEC‟) has been confirmed. The present article shall discuss the aspects of this case to provide a better understanding of the same.
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Apart from the demand for the payment of the above-mentioned duty and cess, the Appellant was also directed to pay interest and penalty.
The contention of the Appellant is that National Calamity Contingency is in the nature of duty and, therefore, entitled to the benefit of the Exemption Notification.
It wasn’t disputed that this issue was raised by the Appellant for earlier periods in the Supreme Court. It is also not in dispute that the Appellant had deposited certain amounts towards NCCD1, EC, and SHEC during the pendency of the appeal before the Supreme Court, but the penalty was not deposited by the Appellant.
The Supreme Court in the aforesaid Civil Appeals Nos. 1600-1605 of 2018 (M/s Hero Motocorp Limited vs Commissioner of Customs and Central Excise decided on 30 April 2019) filed by the Appellant for the earlier period passed the order for refunding back the amount owing to the judgment of the Apex Court in the case of Bajaj Auto Limited Vs. Union of India decided on 27.03.2019, opining that the NCCD is in the nature of excise duty and is, thus, entitled to the benefit of the exemption notification.
The tribunal finally held that the imposition of duty on National Calamity Contingent must be set aside. In such circumstances, the payment for EC and SHEC was required to be set aside.
This appeal, therefore, was allowed in the same terms as the aforesaid order dated 30 April 2019 of the Supreme Court. The order dated 7 September 2016 passed by the Commissioner was set aside. The amount paid by the Appellant to the Department pursuant to the impugned order was directed to be refunded to the Appellant within a maximum period of two months from the date a copy of this order is submitted by the Appellant before the authority concerned.
This judgment clarifies the nature of National Calamity Contingent duty wherein the court clarified that the same falls under the ambit of duty, thereby making the appellant entitled to the benefit as per the Exemption Notification.
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