TMI Blog2014 (6) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... travenous 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. - C/333-368/2012 - Final Order Nos. A/262-297/2013-WZB/C-I(CSTB) - Dated:- 8-2-2013 - Shri P.R. Chandrasekharan, Member (T) and Anil Choudhary, Member (J) Shri Prakash Shah and Vinay Ansurkar, Advocates, for the Appellant. Shri Rakesh Goyal, Additional Commissioner (AR), for the Respondent. ORDER There are 36 appeals directed against Order-in-Appeal Nos. 22 to 57 (Gr.II B)/2012 (JNCH) IMP 17-52, dated 30-1-2012 passed by the Commissioner of Customs (Appeals), Mumbai-II, JNCH, Nhava Sheva. 2. As all these appeals deal with a common issue, they are being taken up together for consideration and disposal. 3. The appellant, M/s. Fresenius Kabi India Pvt. Ltd., Pune, imported Intravenous fluid falling under Chapter 30 of the Customs Tariff. They claimed concessional rate of CVD of 1% adv. under Notification No. 1/11-C.E., dated 1-3-2011, which prescribes the said rate, inter alia, in respect of the said goods subject to certain conditions. The depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment 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 same factory would not arise and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification No. 19/88-C.E. exemption was provided on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT 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. Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition, it is necessary that a manufacturer seeking exemption should show that the Zinc Ash was produced from duty paid inputs. Imported goods are incapable of fulfilling this condition and therefore, could not claim the exemption under notification 19/88. This Larger Bench decision 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 conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. If we fellow this principle, we cannot disregard the condition stipulated in Notification 1/2011-C.E. for the purposes of levy of CVD on imported goods. 6.5 It will also be relevant to peruse the provisions of Section 3 of the Customs Tariff Act, 1975, which are reproduced 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in the Explanation cannot be overlooked and has to be strictly followed. In the present case, the highest rate of duty leviable on intravenous fluids domestically manufactured is 5% ad valorem under Notification No. 2/2011, dated 1-3-2011. Therefore, identical or 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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