2011 (2) TMI 625 - AT - Customs

Exemption - Whether Vat Indigo Blue imported by the appellant are entitled to the benefit of exemption in respect of CVD, in terms of Sr. No. 67 of Notification No. 4/2006-C.E., dated 1-3-2006 - It is seen that the Revenue, had no point of time, either before the Tribunal or before the Hon ble Supreme Court disputed the coverage of Vat Indigo Blue Dye under the description of the excisable goods appearing in Sr. No. 67 of Notification No. 4/2006. The only objection of the Revenue was that the imported goods are not being used in the same factory for the manufacture of textile and textile articles - The said plea of the Revenue was of course, rejected by the Tribunal in the case of Malwa Industries Ltd., which stands confirmed by the Hon ble Supreme Court 2009 -TMI - 32788 - SUPREME COURT - Decided in favour of assessee.

Summary

Issues:
- Interpretation of Notification No. 4/2006-C.E., dated 1-3-2006 regarding exemption for Vat Indigo Blue dye under Customs Tariff Heading 3204 15 59.

Detailed Analysis:

Issue 1: Interpretation of Notification No. 4/2006-C.E.
The appeals revolved around the entitlement of Vat Indigo Blue imported by the appellant to the exemption under Sr. No. 67 of Notification No. 4/2006-C.E., dated 1-3-2006. The appellant imported the dye and used it in their factory for manufacturing textiles, specifically for dyeing denim clothes. The crux of the matter was whether the Vat Indigo Blue dye fell within the description of excisable goods specified in Sr. No. 67 of the notification.

Analysis: The appellant argued that the dye should be considered under the category of "other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles," as mentioned in the notification. However, the appellate authority rejected this argument, stating that the exemption was only for specific items like finishing agents and dye carriers, not for Vat dye itself. The authority emphasized that interpreting the notification to cover all products of Chapter Heading 3204 would render it ineffective and redundant.

Issue 2: Tribunal and Supreme Court Precedents
The appellant cited a Tribunal decision in a similar case involving Vat Indigo Blue dye, which was upheld by the Supreme Court. They argued that the Revenue had not disputed the coverage of the dye under the notification's description of excisable goods. The primary contention was regarding the use of imported goods in the manufacturing factory, which was rejected by the Tribunal and the Supreme Court.

Analysis: The Tribunal referred to the earlier decision and highlighted that the Revenue's challenge was solely based on the use of imported goods in the factory, not on the coverage of Vat Indigo Blue dye under the notification. As the Revenue had not contested the dye's inclusion under the description of excisable goods, they were deemed to have accepted this fact. Therefore, the impugned order of the Commissioner (Appeals) was set aside, and all appeals were allowed in favor of the appellant with consequential relief.

In conclusion, the judgment clarified the interpretation of the notification regarding the exemption for Vat Indigo Blue dye and emphasized the importance of considering the specific language and intent of such notifications in determining eligibility for exemptions.