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2008 (8) TMI 619 - AT - CustomsSilk yarn and fabric - Exemption from CVD on imports - N/N. 30/04-C.E - Held that - Additional duty is imposed on imported goods to counter balance the central excise duty leviable on like articles made indigenously this being a measure intended to safeguard the interests of the manufacturers in India - As no duty was payable on silk yarn either indigenous or imported indigenous silk fabrics were not subject to central excise duty during the material period in terms of N/N. 30/04-C.E. - imported silk fabrics imported during the material period need not beat any CVD - appeal allowed - decided in favor of appellant.
Issues: Claim of benefit under Notification No. 30/2004-C.E. for Additional Duty of Customs (CVD) on imported silk yarn and fabric.
Analysis: 1. Classification of Imported Items: The imported silk yarn and fabric were classified under specific headings in the Central Excise Tariff Act with a duty rate of 8%. The appellants claimed exemption from duty under Notification No. 30/2004-C.E. The crucial condition for the exemption was that no credit of duty on inputs should have been taken under the Cenvat Credit Rules, 2002. The dispute revolved around whether the appellants complied with this condition to claim the exemption. 2. Interpretation of Notification Condition: The appellants argued that the condition regarding the credit of duty on inputs did not apply to them as the input for yarn was not dutiable in India, and thus, the condition was irrelevant. They contended that no CVD was required to be paid on silk yarn during the relevant period. The appellants emphasized that since no manufacturer in India would have availed Cenvat credit on the input due to the non-dutiable nature of the input, the demand for CVD on the imported yarn and fabric was legally unsustainable. 3. Exemption Eligibility: The Tribunal analyzed the specific terms of Notification No. 30/2004-C.E. and concluded that during the disputed period, Indian manufacturers would not have claimed Cenvat credit on the input due to its non-dutiable status. Therefore, the demand for CVD on the imported yarn and fabric was deemed unjustifiable in law. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellants. In summary, the judgment addressed the issue of claiming exemption under a specific notification for CVD on imported silk yarn and fabric. It emphasized the importance of complying with the conditions of the notification and interpreted the applicability of such conditions based on the dutiable status of inputs in India. The decision highlighted that when inputs were non-dutiable, the demand for CVD on imported goods was unsustainable, leading to the allowance of the appeal.
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