2016 (12) TMI 572 - AT - Customs

Import of undyed and unprinted silk fabrics - Exemption from CVD subject to not availing Cenvat Credit on inputs - Benefit under Notification No.30/2004 dated 09.07.2004 - Held that - I find that the issue is no more res-integra in view of the decision of the case of 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 , where it was held that when the credit under the CENVAT Rules is not admissible to the appellant, question of fulfilling the aforesaid condition does not arise - 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. Appeal dismissed - decided against Revenue.

Summary

Issues:
Import of undyed and unprinted silk fabrics, exemption benefit under Notification No.30/2004 for determining additional customs duty (CVD), denial of exemption benefit by appellate authority, appeals allowed by Commissioner (Appeals), revenue's appeal against the decision.

Analysis:
The case involved the import of undyed and unprinted silk fabrics by the respondents who claimed exemption benefit under Notification No.30/2004 for determining the additional customs duty (CVD). The appellate authority initially denied the benefit of the exemption notification, but the Commissioner (Appeals) allowed the appeals of the respondents, leading to the revenue filing appeals against this decision.

The main contention of the revenue was that if the importer did not fulfill the conditions stipulated in the excise notification, they could not claim the benefit of the same for CVD purposes. However, the issue was already settled through various decisions, including the case of Prashray Overseas Pvt. Ltd. Vs. Commr. Of Customs, Chennai, where it was established that during the disputed period, an Indian manufacturer of yarn or fabric would not have been required to claim Cenvat credit on their input. This led to the conclusion that the demand of CVD on the imported yarn and fabric was not sustainable in law.

Furthermore, the judgment of the Hon'ble Supreme Court in the case of SRF Ltd. Vs. Commr. Of Customs, Chennai supported the decision by emphasizing the interpretation of Section 3(1) of the Tariff Act. The Supreme Court's ruling reinforced the principle that for the purpose of attracting additional duty on the import of a manufactured or produced article, the actual manufacture or production of a like article in India was not necessary. This legal interpretation further supported the decision to allow the appeals and set aside the demand of CVD raised by the revenue authorities.

In conclusion, the Order of the Ld. Commissioner (Appeals) was upheld, and the appeals filed by the Revenue were dismissed based on the established legal principles and precedents cited in the case, ensuring that the respondents were entitled to the exemption from payment of CVD as per Notification No. 6/2002.