2018 (2) TMI 1333 - AT - Customs

Benefit of concessional rate of duty - imported Ethylene Vinyl Acetate - N/N. 21/2002 dated 01.03.2002 (Sl. No.494) amended by N/N. 11/2006 dated 01.03.2006 - denial of exemption on the ground that the concession is applicable to Ethyl Vinyl Acetate , falling under Chapter 39, whereas the goods imported were Ethylene Vinyl Acetate - whether the imported goods are eligible to the concessional rate of customs duty as per the N/N. 21/2002 dated 01.03.2002 (as amended)? Held that - The goods imported are Ethyl Vinyl Acetate , but during the relevant time, the notification granted the concession only to Ethylene Vinyl Acetate. It is not disputed that these two goods are different. Since the imported goods do not find mention in the notification, the concessional rate of duty cannot be extended to them. The Honorable Supreme Court in the case of Gammon India Limited 2011 (7) TMI 17 - SUPREME COURT OF INDIA has observed that Exemption Notification, being an exception, is to be strictly construed. Appeal dismissed - decided against appellant.

Summary

Issues:
Interpretation of Notification No.21/2002 regarding concessional rate of import duty for "Ethylene Vinyl Acetate"
Applicability of the concessional rate of duty to imported goods
Principle of strict construction of exemption notifications

Analysis:
The appeal challenged the denial of the benefit of concessional rate of import duty for the appellant's imported "Ethylene Vinyl Acetate" under Notification No.21/2002. The notification initially specified "Ethyl Vinyl Acetate" for the concessional rate, which was later amended to include "Ethylene Vinyl Acetate." The appellant contended that despite the discrepancy in the product names, both goods fall under Chapter 39 and should be eligible for the concession. The appellant relied on the Supreme Court's decision in Indian Tobacco Association, emphasizing that correcting obvious mistakes in notifications has a retrospective effect. However, the Revenue argued that since the imported goods did not match the exact description in the notification, the benefit could not be extended, citing the Gammon India Limited case.

Upon review, the Tribunal noted the distinction between "Ethyl Vinyl Acetate" and "Ethylene Vinyl Acetate" and acknowledged that the notification only granted the concession to the former during the relevant period. As the imported goods did not align with the notification's wording, the concessional rate of duty could not be applied. The Tribunal referenced the Supreme Court's stance in the Gammon India Limited case, emphasizing the strict construction of exemption notifications. The Court highlighted the need for clear establishment of eligibility for exemptions, with any doubt benefiting the State due to the tax implications on the community. Therefore, the Tribunal upheld the impugned order, dismissing the appeal based on the strict interpretation of the notification and the principle of exemption notifications construction.

In conclusion, the Tribunal's decision rested on the clear language of the notification and the principle of strict interpretation of exemption notifications, in line with the Supreme Court's guidance. The appeal was dismissed, affirming the denial of the concessional rate of duty for the imported "Ethylene Vinyl Acetate" due to the lack of alignment with the specific product mentioned in the notification.