2017 (2) TMI 749 - AT - Customs

Benefit of concessional rate of CVD @ 2% under N/N. 1/2011 as amended by N/N. 8/2014-C.E - import of polyester staple fibre made from 100% recycled PET bottles - denial on the ground that the importer has not satisfied the condition of not availing credit - Held that - reliance placed in the case of SRF Limited v. CC, Chennai 2015 (4) TMI 561 - SUPREME COURT , where it stands held by the Hon ble Supreme Court that CESTAT denied the exemption from CVD only on the ground that condition of non-availment of Cenvat credit was not fulfilled inasmuch as Cenvat credit was not admissible to the importer and the question of fulfilling of the said condition does not arise - exemption available - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Benefit of concessional rate of CVD under Notification No. 1/2011
- Condition of no Cenvat credit availed by the manufacturer
- Interpretation of notifications prescribing beneficial rate of duty
- Applicability of Cenvat Credit Rules to foreign manufacturers
- Precedent decisions of the Hon'ble Supreme Court

Benefit of Concessional Rate of CVD under Notification No. 1/2011:
The appellant imported polyester staple fibre and claimed the benefit of a concessional rate of CVD at 2% under Notification No. 1/2011. However, the authorities denied this benefit stating that the importer did not satisfy the condition of not availing Cenvat credit. The appellant challenged this denial, arguing that the notification should be interpreted in a manner favorable to the assessee.

Condition of No Cenvat Credit Availed by the Manufacturer:
The appellant contended that the manufacturer abroad cannot be subjected to the condition of not availing Cenvat credit, as the Cenvat Credit Rules apply only to manufacturers in India. They relied on decisions of the Hon'ble Supreme Court to support their argument, emphasizing that the condition of non-availment of Cenvat credit should not apply to importers.

Interpretation of Notifications Prescribing Beneficial Rate of Duty:
The Tribunal referred to a recent decision of the Hon'ble Supreme Court in a similar case involving Notification No. 6/2002, where the Court held that denial of exemption from CVD based on non-fulfillment of the condition of non-availment of Cenvat credit was incorrect. The Tribunal applied this precedent to the present case involving Notification No. 1/2011 and ruled in favor of the appellant, setting aside the impugned order and granting relief.

Applicability of Cenvat Credit Rules to Foreign Manufacturers:
The Tribunal, guided by the Supreme Court's decision, concluded that the condition of non-availment of Cenvat credit should not be a determining factor for importers, especially in cases involving foreign manufacturers. The Tribunal emphasized that importers should be entitled to exemptions from payment of CVD as per the relevant notifications, irrespective of the manufacturer's location.

Precedent Decisions of the Hon'ble Supreme Court:
The Tribunal extensively relied on precedent decisions of the Hon'ble Supreme Court, particularly the case of SRF Limited v. CC, Chennai, to support its interpretation of the notifications and the applicability of conditions related to Cenvat credit. By following the Supreme Court's rulings, the Tribunal granted relief to the appellant and allowed the appeal, highlighting the consistent legal principles applied in similar cases.