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TMI Blog2014 (6) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the imported goods will not be eligible for the benefit of duty exemption under this Notification. CVD is leviable on Intravenous fluid @ 5% ad valorem under Notification No. 2/2011-C.E., dated 1-3-2011 and not @ 1% ad valorem under Notification No. 1/2011-C.E., dated 1-3-2011 as claimed by the appellant - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ication which was denied and the department allowed the benefit under Sr. No. 4. It was contested by the revenue before the Hon'ble Apex Court that when two rates of duty are specified for the purpose of levy of CVD, as per the Explanation to Section 3(1) of the Customs Tariff Act, the highest rate should be taken. This contention was negatived by the Hon'ble Supreme Court holding that once the goods satisfied the description given in respect of a particular product, the said rate should be applied for the purposes of levy of CVD and not the highest rate. 4.1 The ld. Counsel also relies on the decision of the Hon'ble Apex Court in the case of Malwa Industries Ltd. reported in 2009 (235) E.L.T. 214 (S.C.) wherein a question arose as to whether the 'Nil' rate of duty in respect of certain goods falling under Tariff Headings 3204 or 3809 would apply to imported goods when the Excise Notification prescribed the said rate subject to the condition that the product should be used within the factory for manufacture of textile and textile articles. The CVD claim of the appellant was rejected on the ground that in respect of imported goods, the question of using the products in the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... par with the excise duty leviable on like goods manufactured in India, as has been held by the Constitution Bench of the Hon'ble Apex Court in the case of Hyderabad Industries Ltd. v. UOI [1999 (108) E.L.T. 321 (S.C.)]. 5.1 In the present case, there are two rates prescribed for the purpose of levy of excise duty. One rate is 1% ad valorem which is subject to the condition that no CENVAT credit is taken on the duty paid on inputs or taxes paid on input services vide Notification No. 1/2011-C.E. Another rate is 5% ad valorem prescribed under Notification No. 2/2011-C.E. without any condition. In other words, the manufacturer who avails CENVAT credit is liable to pay tax @ 5% adv. As per Explanation to Section 6(1) of the Customs Tariff Act, when the like goods produced in India are subjected to different rate of duty. For the purposes of levy of CVD, the highest rate should be taken. 5.2 The learned AR further relies on the decision of the Larger Bench of this Tribunal in the case of Priyesh Chemicals & Metals v. Commissioner of Central Excise, Bangalore - 2000 (120) E.L.T. 259 (Tri.-LB), where an identical issue arose for consideration. In the facts of that case, vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t services has been taken under the provisions of the CENVAT Credit Rules, 2004. TABLE S. No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of the excisable goods (1) (2) (3) 38. 30 Intravenous fluids, which are used for sugar, electrolyte or fluid replenishment Notification No. 2/2011 "G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table below and falling under Chapter, heading, sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 ( 5 of 1986), specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise leviable thereon under the said Central Excise Act, as is in excess of the amount calculated at the rate of 5% ad valorem : TABLE S. No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of the excisable goods (1) (2) (3) 20 30 Intravenous fluids, which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n prevails over other decisions of this Tribunal relied upon by the appellant and also takes into account the decision of the Hon'ble Apex Court in the case of Thermax Pvt. Ltd. (supra). 6.3 Coming to the reliance placed by the appellant in the case of Thermax Pvt. Ltd. (supra), in that particular case, the imported goods satisfied the description given in the entry as well as the condition of use. Therefore, the Apex Court held that the benefit of excise duty exemption for the levy of CVD cannot be denied in a case where the imported goods satisfied not only the description but also the condition of use. It was in that context, the Apex Court held that explanation to Section 3(1) of the Customs Tariff Act will not be relevant. Similarly in the case of Malwa Industries Ltd. (supra) relied upon by the appellant, there also the imported goods satisfied not only the description but also the condition of use i.e. "imported goods namely, finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste, and other products and preparations of any kind falling under Heading No. 3204 or 3809 used in the same factory for the manufacture of textiles and te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under :- "3. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article : Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the Official Gazette, specify the rate of additional duty having regard to the Excise duty for the time being leviable on a like alcoholic liquor produced or manufactured in different States or, if a like alcoholic liquor is not produced or manufactured in any State, then, having regard to the Excise duty which would be leviable for the time being in different States on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs. Explanation.-- In this sub-section, the expression "the excise duty for the time be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r similar goods imported will attract CVD @ 5% ad valorem. 6.7 This issue relating to levy of CVD was also considered by the C.B.E. & C. at the time of introduction of 1% levy on 130 items including Intravenous fluids in the Budget 2011-12 and the C.B.E. & C. clarified as follows vide Circular B-1/3/2011-TRU, dated 25-3-2011 :- "…. Doubts have been raised about the applicable CVD rate on the 130 items, on which Excise Duty @ 1% has been levied vide Notification 1/2011-C.E., dated 1-3-2011, when imported. It is further learnt that manual bills of entry have been permitted at certain customs locations as 1% CVD rate was not available in the system. This concessional rate of 1%, however, is available only if the Cenvat credit on inputs and input services is not availed of; otherwise all these items attract 5% Excise duty as prescribed vide notification 2/2011-C.E., dated 1-3-2011 and Tenth Schedule to the Finance Bill. At the time of updating of ICES, the Directorate of Systems had been advised not to feed Notification 1/2011-C.E., dated 1-3-2011 in the system as 1% rate will not be applicable for CVD purposes. There should have been no confusion on the subject. Since th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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