2016 (11) TMI 1456 - AT - Customs

Exemption from payment of CVD - N/N. 30/2004-CE dated 09/7/2004 - denial on the ground that condition of non-availment of Cenvat credit by the manufacturer does not stand satisfied - Held that - the ratio of law as declared by the Hon ble Supreme Court in the case of SRF Ltd. vs. CC Chennai 2015 (4) TMI 561 - SUPREME COURT is fully applicable to the facts where Its stand held by the Hon ble Supreme Court that CESTAT denied the exemption from CVD only on the ground that condition of non-availment of Cenvat credit was not fulfilled in as much as Cenvat credit was not admissible to the importer and the question of fulfilling of the said condition does not arise - exemption allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Notification No. 30/2004-CE dated 09/7/2004 regarding exemption from payment of CVD.
- Admissibility of Cenvat credit by the importer as a condition for exemption.
- Comparison with a previous Supreme Court decision on a similar notification.

Interpretation of Notification No. 30/2004-CE:
The case involved the importation of PVC coated fabrics, Polyester Knitted Fabrics, and non-textured Polyester cloth, with the appellants claiming exemption from payment of CVD under Notification No. 30/2004-CE dated 09/7/2004. The Deputy Commissioner of Customs denied the exemption, citing the condition of non-availment of Cenvat credit by the manufacturer, which he deemed unsatisfied by the importer. The Commissioner (Appeals) upheld this decision, emphasizing strict adherence to the notification's conditions, particularly that it covers only goods produced or manufactured in India.

Admissibility of Cenvat credit for exemption:
The Tribunal considered a recent Supreme Court decision in SRF Ltd. vs. CC, Chennai, which dealt with a similar clause in Notification No. 6/2002-CE. The Supreme Court held that denial of exemption based on non-fulfillment of the Cenvat credit condition was incorrect when the credit was not admissible to the importer. Applying this precedent to the present case concerning Notification No. 30/2004-CE, the Tribunal concluded that the importers were entitled to exemption from CVD. The Tribunal emphasized that since the conditions were identical, the Supreme Court's ruling was fully applicable, leading to the setting aside of the impugned orders and granting relief to the appellants.

Comparison with previous Supreme Court decision:
By aligning the interpretation of the current case with the Supreme Court's decision on a similar notification, the Tribunal clarified that the condition of non-availment of Cenvat credit should not prevent importers from claiming exemption from CVD. The Tribunal's decision to allow the appeals and provide consequential relief to the appellants was based on this consistent legal principle established by the Supreme Court, ensuring uniformity in the application of tax laws and exemptions.