2015 (11) TMI 498 - AT - Customs

Admissibility of CVD exemption on imported goods - Rate of duty application - CVD payable on the imported goods whether chargeable @ 6% under Notification No.19/2012-CE dt. 17.3.2012 or @ 1% in terms of Notfn 12/2012-CE d. 17.3.2012 - Held that - No such CENVAT credit is availed by the appellant. However the reason for denying the benefit of the aforesaid Notification is that in the case of the appellant no such credit is admissible under the CENVAT Rules. On this basis the CEGAT has come to the conclusion that when the credit under the CENVAT Rules is not admissible to the appellant question of fulfilling the aforesaid condition does not arise. In holding so it followed the judgment of the Bombay High Court in the case of Ashok Traders v. Union of India 1987 (10) TMI 53 - HIGH COURT OF JUDICATURE AT BOMBAY wherein the Bombay High Court had held that it is impossible to imagine a case where in respect of raw nephtha used in HDPE in the foreign country Central Excise duty leviable under the Indian Law can be levied or paid. Thus the CEGAT found that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied. No such CENVAT credit is availed by the appellant. However the reason for denying the benefit of the aforesaid Notification is that in the case of the appellant no such credit is admissible under the CENVAT Rules. On this basis the CEGAT has come to the conclusion that when the credit under the CENVAT Rules is not admissible to the appellant question of fulfilling the aforesaid condition does not arise. In holding so it followed the judgment of the Bombay High Court in the case of Ashok Traders v. Union of India 1987 (10) TMI 53 - HIGH COURT OF JUDICATURE AT BOMBAY wherein the Bombay High Court had held that it is impossible to imagine a case where in respect of raw nephtha used in HDPE in the foreign country Central Excise duty leviable under the Indian Law can be levied or paid. Thus the CEGAT found that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied. As there is no stay granted by the apex court against Supreme Court order 2015 (3) TMI 690 - SUPREME COURT the ratio of the Apex Court decision applicable to this case. The appellants have claimed CVD exemption under Notfn 12/12 before the Commissioner (Appeals) when there are two notifications are available on the rate of CVD it is open to the appellant to claim the exemption which is beneficial to them. If they have not claimed before assessing officer there is no bar in claiming before appellate authority. Accordingly they have rightly claimed before appellate authority as Bill of Entry itself is an assessment order. - By respectfully following the apex court decision and this Tribunal s decision (2015 (8) TMI 191 - CESTAT CHENNAI) we hold that appellants are eligible for CVD @ 1% under Notification No.12/2012-CE dt. 17.3.2012 as at Sl.No.199 of the Table. Accordingly the impugned order is set aside - Decided in favour of assessee.

Summary

Issues Involved:

1. Classification and applicable rate of Countervailing Duty (CVD) on imported jewellery.
2. Eligibility for exemption under Notification No. 12/2012-CE.
3. Compliance with conditions for availing exemptions.
4. Jurisdiction of appellate authority to grant relief not claimed before assessing officer.

Issue-wise Detailed Analysis:

1. Classification and Applicable Rate of CVD on Imported Jewellery:
The appellants imported unbranded jewellery classified under CTH 71131930 and initially claimed CVD at 6% under Notification No. 2/2011-CE, as amended by Notification No. 19/2012-CE. Subsequently, they sought a reduced CVD rate of 1% under Notification No. 12/2012-CE, claiming that they were eligible for this benefit. The Tribunal examined the relevant entries in both notifications to determine the applicable rate.

2. Eligibility for Exemption under Notification No. 12/2012-CE:
The appellants contended that as traders, not manufacturers, they did not avail CENVAT credit, thus fulfilling the condition under Notification No. 12/2012-CE, which allows a 1% CVD rate if no credit under Rule 3 or Rule 13 of the CENVAT Credit Rules, 2004, has been taken. The Tribunal considered the Supreme Court's judgment in SRF Ltd. Vs CC Chennai and a similar Tribunal order in CC Chennai Vs Enterprises International Ltd., which supported the appellant's position.

3. Compliance with Conditions for Availing Exemptions:
The Revenue argued that the appellants initially self-assessed and paid CVD at 6% without protest and did not meet the conditions of Notification No. 12/2012-CE at the time of import. The Tribunal, however, noted that the appellants could claim the more beneficial notification before the appellate authority, even if not claimed initially before the assessing officer. The Tribunal referenced the Supreme Court's decision in SRF Ltd., which allowed exemptions when conditions were not explicitly fulfilled but were inherently met due to the nature of the appellant's business.

4. Jurisdiction of Appellate Authority to Grant Relief Not Claimed Before Assessing Officer:
The Tribunal held that when two notifications are available, the appellant is entitled to claim the more beneficial one before the appellate authority. The Tribunal cited the Supreme Court's ruling that appellants could seek exemptions at the appellate stage if not initially claimed before the assessing officer, as the Bill of Entry itself constitutes an assessment order.

Conclusion:
The Tribunal concluded that the appellants were eligible for the 1% CVD rate under Notification No. 12/2012-CE and set aside the impugned order, allowing the appeal with consequential relief. The Tribunal's decision was guided by the Supreme Court's rulings and previous Tribunal decisions, emphasizing the principle that taxpayers can claim the most beneficial exemption available to them.