2016 (10) TMI 223 - AT - Customs

Exemption from payment of CVD - Notification No. 30/2004-CE dated 09/7/2004 - import - PVC coated fabrics - Polyester Knitted Fabrics - non-textured Polyester cloth - condition of non-availment of cenvat credit - Held that - the issue is similar to the case M/s SRF Ltd., M/s ITC Ltd Versus Commissioner of Customs, Chennai, Commissioner of Customs (Import And General), New Delhi 2015 (4) TMI 561 - SUPREME COURT , and the decision is relied upon. - 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.
- Application of the condition of non-availment of Cenvat credit by the manufacturer to the importer.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved the interpretation of Notification No. 30/2004-CE dated 09/7/2004 regarding the exemption from payment of CVD. The appellants had imported PVC coated fabrics, Polyester Knitted Fabrics, and non-textured Polyester cloth, claiming exemption under this notification. The Deputy Commissioner of Customs denied the benefit of the notification based on the condition of non-availment of Cenvat credit by the manufacturer, which he believed was not satisfied by the importer. This decision was upheld by the Commissioner (Appeals), emphasizing strict adherence to the conditions specified in the notification and the exclusion of goods produced or manufactured outside India.

In the appeal, the Tribunal considered a recent decision by the Hon'ble Supreme Court in the case of SRF Ltd. vs. CC, Chennai, where a similar issue arose concerning Notification No. 6/2002-CE dated 01/3/2002, which also included a clause about the manufacturer not availing Cenvat credit. The Supreme Court held that the denial of exemption from CVD based on the non-fulfillment of the Cenvat credit condition was incorrect since the importer was not eligible for Cenvat credit in the first place. Therefore, the question of meeting this condition did not arise. Applying the precedent set by the Supreme Court, the Tribunal set aside the impugned orders and allowed all the appeals, providing consequential relief to the appellant.

In conclusion, the Tribunal's decision was based on the application of legal principles established by the Hon'ble Supreme Court, which clarified that the condition of non-availment of Cenvat credit by the manufacturer should not be a basis for denying the importer's entitlement to exemption from payment of CVD under Notification No. 30/2004-CE. The judgment emphasized the importance of interpreting tax statutes strictly while considering the actual wording of the notifications and ensuring that importers are not unfairly deprived of legitimate exemptions.