Incidence of National Calamity Contingent Duty (NCCD) for calculation of Brand Rate of duty drawback.

Circular No. ES/127/2020-21                                                         13th May, 2020         

To : Members of the Council

Sub: Incidence of National Calamity Contingent Duty (NCCD) for calculation of Brand Rate of duty drawback.

Dear Member,

CBIC has issued Instruction No. 5/2020- Customs dated 12th May, 2020 regarding incidence of National Calamity Contingent Duty (NCCD) for calculation of Brand Rate of duty drawback.

Kind attention is invited to Board’s Instruction No. 4/2019- Customs dated 11.10.2019 clarifying 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.

Subsequently, the Board has received representations from Trade and Industry regarding 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. 

Further, CBIC has examined the matter keeping in view the folllowing -

1. Relevant statutory provisions of Customs and Central Excise Duties Drawback Rules, 2017 and Board’s Instruction No. 4/2019- Customs dated 11.10.2019. 

2. 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. 

3. 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. 

4. 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. 

5. NCCD is also taken into account in the calculation of All Industry Rates of duty drawback by the Drawback Committee.