9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 1420 - AT - CustomsSeeking benefit of rectification under Section 149 of the Customs Act - Entitlement to the benefit of Notification No. 12/2012-CE - non-availment of CENVAT credit - exemption from Countervailing Duty (CVD) - HELD THAT - We find that the issue regarding admissibility of Notifications has prescribed conditions relating to non-availment of cenvat credit has been decided by Hon ble Apex Court in the case of SRF Limited 2015 (4) TMI 561 - SUPREME COURT Thus we find that the order of Commissioner(Appeals) which disallows the benefit of Notification 12/2012-CE for the purpose of availing CVD Exemption cannot be sustained. The said order is therefore set aside. Appeals are allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Entitlement of Importers to Benefit under Notification No. 12/2012-CE Despite Non-Applicability of CENVAT Credit Conditions Relevant Legal Framework and Precedents: The principal legal framework involves Notification No. 12/2012-CE, which grants exemption from CVD subject to certain conditions, including that the importer or manufacturer should not have availed CENVAT credit under the CENVAT Credit Rules, 2002. Section 149 of the Customs Act, 1962, concerning rectification of errors, is also relevant. The judgment heavily relies on the Supreme Court decision in SRF Limited (2015) (14) SCC 596, which addressed the identical issue of whether the condition of non-availment of CENVAT credit can bar an importer from exemption when such credit is inherently not available to importers. Court's Interpretation and Reasoning: The Court examined the facts and legal reasoning in SRF Limited, where it was held that conditions like non-availment of CENVAT credit, which cannot possibly be fulfilled by importers, should not prevent them from availing exemption notifications. The Court noted that the condition was intended for manufacturers availing CENVAT credit and could not logically apply to importers who do not have the facility to claim such credit. The Court further discussed the reasoning in the SRF Limited case, which analyzed the scope of Section 3(1) of the Tariff Act and the Explanation thereto, as interpreted in Thermax (P) Ltd. and Hyderabad Industries Ltd. The Explanation clarifies that for levy or exemption of additional duty (CVD), it must be presumed that the article could be manufactured in India, even if it is not actually manufactured there. This presumption supports the principle that conditions framed for domestic manufacturers cannot be rigidly applied to importers when such conditions are impossible to fulfill. Key Evidence and Findings: The appellant in the present case is an importer who could not have availed CENVAT credit under the CENVAT Credit Rules. The impugned order denied exemption on the ground that the appellant did not fulfill the non-availment condition, ignoring the fact that the condition is inapplicable to importers. Application of Law to Facts: Applying the Supreme Court's reasoning, the Tribunal found that denying the benefit of Notification 12/2012-CE to importers on the basis of a condition that cannot be fulfilled by them is unsustainable. The Court emphasized that the condition of non-availment of CENVAT credit is not a bar for importers to claim exemption under the Notification. Treatment of Competing Arguments: The Respondent relied on the impugned order denying benefit, presumably arguing strict adherence to the Notification's conditions. The Tribunal rejected this approach, holding that the interpretation must be consistent with the principle that conditions impossible to satisfy by importers should not be applied to deny exemption. Conclusion: The Tribunal allowed the appeals, setting aside the order of the Commissioner (Appeals) and holding that the appellants are entitled to the benefit of Notification No. 12/2012-CE for exemption from CVD. Issue 2: Denial of Rectification under Section 149 of the Customs Act, 1962 Relevant Legal Framework and Precedents: Section 149 of the Customs Act, 1962, permits rectification of errors apparent from the record. The denial of rectification was challenged as unjustified. Court's Interpretation and Reasoning: The Tribunal observed that since the denial of exemption was based on a misinterpretation of the conditions in the Notification, the denial of rectification under Section 149 was also unsustainable. The rectification was necessary to correct the error apparent on the face of the record. Application of Law to Facts: The Tribunal found that the Commissioner (Appeals) erred in refusing rectification and denying exemption, given the binding precedent from the Supreme Court and the nature of the appellant as an importer. Conclusion: The denial of rectification was set aside, allowing the appellants to avail the benefit of exemption under the Notification. 3. SIGNIFICANT HOLDINGS The Tribunal, relying on the Supreme Court's authoritative decision, established the following core principles and final determinations:
|
