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2018 (1) TMI 438 - AT - CustomsWhether the appellant is entitled to the benefit of N/N. 29/2004 CE dated 7.4.2004 as amended from time to time for payment of additional duty of custom equivalent to excise duty under Section 3(1) of CTA, 1975 on the imported filament yarn falling under heading 5402.10 of CETA, 1985 and CTA 1975? Held that - Tribunal in the case of SRF Polymers Ltd. 2017 (10) TMI 159 - CESTAT CHENNAI had analysed the very same issue, has held that Additional duty of customs, also known as countervailing duty (CVD) is imposed to provide a level playing field for the indigenous goods who have to bear the brunt of local taxes, in particular central excise duty levied on manufacture of identical goods in India. Also, goods imported into India in most cases benefit from export incentives like duty drawback in the concerned country of export. The important factum, however, is that the additional duty of customs has to be equal to the excise duty for the time being leviable. The appellants are not eligible for benefit of N/N. 29/2004 dated 9.7.2004 - Appeal dismissed - decided against appellant.
Issues:
1. Entitlement to benefit of Notification No.29/2004 CE for payment of additional duty of custom equivalent to excise duty on imported filament yarn. Analysis: The appellant, engaged in the manufacture of narrow woven fabric braided cord, imported filament yarn and paid additional duty of custom at a concessional rate under Notification No.29/2005-CE. The central issue was whether the appellant is entitled to the benefit of Notification No.29/2004 CE for payment of additional duty of custom equivalent to excise duty on the imported filament yarn. The Tribunal referred to a previous case involving a similar issue and analyzed the scope of additional duty of customs, emphasizing that it is levied equal to the excise duty on like articles produced in India. The Tribunal highlighted that the additional duty of customs aims to provide a level playing field for indigenous goods against local taxes like central excise duty. The Tribunal examined the conditions for eligibility under the notification, including the requirement that the input filament yarn should be procured from outside and subjected to a process by a manufacturer lacking the facility for manufacturing filament yarns of Chapter 54. The Tribunal noted that the reduced rate of central excise duty under the notification only applies to yarns subjected to a process by a manufacturer without the facility for manufacturing filament yarns of Chapter 54. It clarified that the reduced duty is applicable to the resultant goods that fall under Chapter 54, not the imported filament yarn itself. The Tribunal interpreted the requirement of "procured from outside" and concluded that the imported goods satisfied this condition. It further explained that the benefit of reduced duty liability extends to the resultant product manufactured using the imported yarn after processing in the factory, provided the final goods also fall under Chapter 54. In its decision, the Tribunal relied on precedents and held that the appellant was not eligible for the benefit of Notification No.29/2004 CE. The Tribunal dismissed the appeal, emphasizing that the additional duty of customs on the imported filament yarn should be equal to the central excise duty leviable on a like article produced or manufactured in India. The Tribunal's decision was based on the principle that for additional duty calculation, the imported article should be imagined as manufactured or produced in India to determine the excise duty payable. The Tribunal's decision aligned with previous judgments emphasizing the importance of levying countervailing duty on goods as they are when imported, following statutory mandates and legal principles. Therefore, the Tribunal concluded that the appellant was not entitled to the benefit of the notification, and the appeal was dismissed based on established legal principles and precedents, ensuring parity in duty liabilities between imported and domestically produced goods.
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