Background:-
As per Instruction No. 4/2019- Customs dated 11.10.2019 which clarified the position regarding Education Cess, Secondary and Higher Education Cess, Social Welfare Surcharge, Clean Environment Cess (erstwhile Clean Energy Cess) and Stowage Excise Duty levied on inputs used in the manufacture of export goods with regard to their incidence for the purpose of calculation of Brand Rate of duty drawback.
Representations have been received in the Board seeking inclusion of the incidence of National Calamity Contingent Duty (NCCD) levied on the inputs used in the manufacture of export goods in calculation of Brand Rate of duty drawback. The matter has been examined keeping in view the relevant statutory provisions, Customs and Central Excise Duties Drawback Rules, 2017 and Board’s Instruction No. 4/2019- Customs dated 11.10.2019, NCCD is levied under Section 136 of Finance Act, 2001 as a duty of excise and under Section 134 of Finance Act, 2003 as a duty of customs. These legislations respectively inter-alia provide that provisions of Central Excise Act, 1944, Customs Act, 1962 and rules and regulations made thereunder including those relating to refunds, exemptions etc. shall apply to this levy. Section 75 of the Customs Act, 1962 allows drawback of duties of customs chargeable under the Act. Section 12 of the said Act provides for levy of duties of customs at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force. NCCD is also taken into account in the calculation of All Industry Rates of duty drawback by the Drawback Committee.
Clarification:-
The CBIC vide Instruction No. 05/2020 dated May 12, 2020, it was clarified that the incidence of National Calamity Contingent Duty (“NCCD”) where applicable, is required to be factored in calculation of Brand Rate of duty drawback. Further, the Field formations are requested to deal with applications for fixation of Brand Rate of duty drawback accordingly.
The Instruction can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-instructions/cs-instructions-2020/cs-ins-05-2020.pdf