2008 (9) TMI 666 - AT - Customs

Silk fabrics - Exemption from CVD - 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.

Summary

Issues:
1. Exemption from CVD under Notification No. 30/2004-C.E. for imported silk fabrics.
2. Interpretation of conditions for exemption under Notification No. 30/2004-C.E.
3. Application of CVD on imported silk fabrics.
4. Comparison of duty on indigenous and imported silk fabrics.

Analysis:
1. The case involved the import of silk fabrics seeking exemption from CVD under Notification No. 30/2004-C.E. The original authority granted the exemption, but the Commissioner (A) denied it due to the alleged failure to meet the condition of not availing credit of duty paid on inputs for the imported goods.

2. The Tribunal analyzed the exemption condition, which required the goods to be manufactured without availing input duty credit. It was established that no Central Excise duty was payable on raw silk produced in India, and yarn manufactured from such silk was exempt under the notification as no credit availed input was used. Therefore, indigenous silk fabrics made from indigenous silk yarn were exempt from Central Excise duty.

3. The Tribunal also discussed the levy of CVD on imported silk fabrics, citing the Customs Tariff Act, 1975. It explained that CVD is imposed on imported goods to counterbalance the central excise duty leviable on similar articles made domestically, aiming to protect Indian manufacturers. As no duty was payable on silk yarn, whether indigenous or imported, indigenous silk fabrics were not subject to central excise duty during the relevant period, and therefore, imported silk fabrics did not attract CVD.

4. The judgment highlighted that imported silk fabrics during the material period did not need to bear any CVD, making them eligible for the exemption under Notification No. 30/2004-C.E. This decision was consistent with the Tribunal's previous orders for the same appellants concerning earlier imports. The appeal was allowed, emphasizing the exemption eligibility of the impugned imports under the notification.

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed, the legal interpretations made, and the ultimate decision rendered by the Appellate Tribunal CESTAT, CHENNAI.