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2015 (8) TMI 191 - CESTAT CHENNAI

2015 (8) TMI 191 - CESTAT CHENNAI - TMI - Admissibility of CVD exemption on imported goods - import of silk yarn, silk fabrics - Benefit of Notification No.30/2004-CE dt. 9.7.2004 - Held that:- Supreme Court has clearly considered all the previous decisions of Apex Court including the decision in the case of Motoram Tolaram Vs UOI (1999 (8) TMI 68 - SUPREME COURT OF INDIA). Therefore, the revenue relying on the above case law and also the LB decision in the case of M/s.Priyesh Chemicals & Metals .....

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pectfully following the ratio of the Apex Court decisions, we hold that the respondents are eligible for CVD exemption under Notification 30/2004-CE dt. 9.7.2004. There is no infirmity in the orders of LAA - Decided against Revenue. - C/151-154/2012, C/211-235/2012, C/237-242/2012, C/247-255/2012, C/279-290/2012, C/297/2012, C/299/2012, C/302/2012, C/305/2012, C/306/2012, C/320/2012, C/321/2012, C/40475/2014, C/40476/2014, C/40477/2014 - FINAL ORDER No.40781-40846/2015 - Dated:- 10-7-2015 - Shri .....

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f Entries were assessed without extending the exemption of CVD vide Notification No.30/2004-CE dt. 9.7.2004 as amended. The appellants preferred appeals before Commissioner (Appeals) against the assessment order passed on the Bill of Entry claiming benefit of CVD exemption under said Notification. The Commissioner (Appeals) allowed the CVD exemption under the said notification and set aside the assessment order and allowed the appeals with consequential relief. LAA in his order relied various Tr .....

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/s.Enterprises International Ltd. and Shri Selvakumar, Advocate appeared for appellants as at Sl.No.64 to 66. 4. Ld. A.R. Shri M. Rammohan Rao, Jt. Commissioner appeared for the Revenue and reiterated the grounds of appeal which is reproduced as under :- (a) The Commissioner (Appeals)'s order is contrary to the Board's circular No.37/2001 dt. 18.6.2001 clarifying that the imported goods will not be eligible for the benefit of conditional Central Excise Notification, when it is not possib .....

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locally manufactured goods and not for the imported goods. (c) The Commissioner (Appeals) has relied on the judgement of Tribunal in the case of M/s.Prashrary Overseas Pvt. Ltd. Vs CC Chennai which is appealed by the department in Hon'ble High Court, Madras and is pending. As the order of the Tribunal has not attained finality, the same cannot be relied upon by the Commissioner (Appeals). (d) A similar order of Commissioner (Appeals), Kolkata Custom House allowing the benefit of Notificatio .....

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Thermax Pvt.Ltd. case, extended the benefit of notification to import of car to be put to use as a Taxi. Whereas the present appeal is dealing with a condition precedent of not availing the Cenvat credit to claim the exemption. He further submits that SRF case of Supreme Court relied upon by respondent is distinguishable. The scope of Supreme Court decision in the case of Thermax is relevant to the extent of treating an importer on par with a manufacturer for the purposes of CVD exemption. The s .....

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ith the Supreme Court decision in the case of Motiram Tolaram - 1999 (12) ELT 749 (SC). In the case of Motiram Tolaram the apex court has laid down the law relating to complying with a condition precedent to an excise notification in case of an import. That was not brought to the notice of the Hon'ble Supreme Court in SRF case. He further submits that Motiram Toleram case was again approved by the constitutional Bench in the case of Dhiren Chemical Industries - 2002 (139) ELT 3 (SC). He reli .....

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o the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of CCR 2002. This condition is not applicable in the case of imports. As per Section 3 of the Customs Tariff Act, the levy of additional duty is imposed equivalent to the excise duty. He drew our attention to the Chapter 50 of CETA, the Chapter headings 50.01 to 50.03 attracts Nil rate of duty on the raw material i.e. cocoon & raw silk and no excise duty is leviable on these inputs. .....

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the case of Nhava Sheva Vs Ashima Dyecot Ltd. - 2011 (267) ELT 122 (Tri.-Mumbai) and Mapsa Tapes Pvt.Ltd. Vs CC & CCE Delhi - 2009 (247) ELT 188 (Tri.-Del.) and has rightly relied this Tribunal's decision in the case of Prashrary Overseas Pvt. Ltd. Vs CC Chennai and allowed the notification benefit. He submits that this Tribunal's above orders has not been set aside by High Court and binding on the LAA and he has rightly followed the Tribunal's decisions. 8. He relied on the rec .....

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d. and Texworth International reiterated the arguments advanced by Shri Krishnanandh, Advocate for their appeals also. The counsels relied on the following case law :- (i) Elegant Fabric Vs CC Chennai -2011 (263) ELT 603 (Tri.-Chennai) (ii) Prashray Overseas Pvt Ltd Vs CC Chennai 2009 (235) ELT 300 (Tri.-Chennai) (iii) Prashray Overseas Pvt. Ltd. Vs CC Chennai 2008 (232) ELT 63 (Tri.-Chennai) (iv) Mapsa Tapes Pvt. Ltd. Vs CC Delhi 2009 (247) ELT 188 (Tri.-Del.) (v) CC Nhava Sheva Vs Ashima Dyeco .....

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n in SRF case only lays down the principal whereas in the case of Motiram Tolaram the Supreme Court has discussed all the conditions of the notification. 10. Ld. Advocate in his rejoinder, relied on para-13 of the Supreme Court in AIDEK Tourism case wherein the Hon'ble Supreme Court has clearly discussed the Explanation to Section 3 of the Customs Tariff Act. He also referred to para 15 & 16 of the order wherein the apex court has considered the decision of Motiram Tolaram Vs UOI (supra) .....

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it of the notification. The LAA in the impugned orders while allowing the appeal has discussed the issue in detail and also relied on this Tribunal's Division Bench decisions in the case of Prashray Overseas Pvt. Ltd. (supra) and also relied Tribunal's decision in Nhava Sheva Vs Ashima Dyecot Ltd. (supra) and Mapsa Tapes Pvt. Ltd. case (supra). 12. On perusal of the grounds of appeal already reproduced above, the Revenue's contention that LAA has not considered the Tribunal's Lar .....

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the notification is only for local manufacturer of goods and not for importer. We find that this very ground advanced by the Revenue has already been dealt with in detail and decided by this Tribunal Bench in the case of M/s.Prashray Overseas Pvt. Ltd. in the orders reported in 2008 (232) ELT 63 (Tri.-Chenn.) and 2009 (235) ELT 300 (Tri.-Chennai) where the issue of grant of CVD exemption under Notification 30/2004-CE dt. 9.7.2004 has been discussed and allowed appeals. The LAA has rightly relied .....

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relying in the case of Union of India Vs Kamlakshi Finance Corporation Ltd. - 1991 (55) ELT 433 (SC), this Bench decision is binding on the jurisdictional lower authorities and they are bound to follow the said decision. On this account alone, the Revenue's appeals are liable to be rejected. 13. On the question of admissibility of CVD exemption, we find the notification No.30/2004-CE dt. 9.7.2004 at Sl.No.5 of table exempts excise duty on silk yarn and silk fabrics falling under Chapter 54.0 .....

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ilk produced in India. Yarn manufactured from such silk is also exempt under Notification No.30/2004 as no credit availed input is used to manufacture silk yarn. Therefore indigenous silk fabrics manufactured from indigenous silk yarn are exempt from Central Excise duty. Another stream in which silk fabrics get manufactured in India is using imported silk yarn. Neither party disputes that imported silk yarn was exempt from CVD during the material period in terms of Notification No. 20/06-Cus dat .....

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ntage 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. CVD is therefore payable on imported silk fabrics at the rate central excise duty is leviable for the time being on such silk fabrics produced or manufactured in India. Additional duty is imposed on imported goods to counter balance the central excise duty leviable on like articles made indigenously, this being a measure intended to .....

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2008 dated 28-8-2008 [2008 (232) E.L.T. 63 (Tribunal)] in respect of the same appellants for 44 consignments imported earlier. The appeal is allowed." 14. We find that Revenue relied on the Supreme Court's decision in the case of Motiram Tolaram Vs UOI (supra) and the Tribunal's Larger Bench decision in Priyesh Chemicals & Metals (supra). In this regard the Hon'ble Supreme Court in their recent order in the case of SRF Ltd. Vs CC Chennai (supra) held that the appellants are .....

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th tolerance of 6 per cent. Nil - 20 5402.41 5402.49 5402.51 5402.59 5402.61 or 5402.69 4. As per the aforesaid entry, the rate of duty is nil. Condition No. 20 of this Notification, which was relied upon by the authorities below in denying the exemption from payment of CVD, is to the following effect: "20. If no credit under rule 3 or rule 11 of the CENVAT Credit Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods." 5. The afore .....

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AT has come to the conclusion that when the credit under the CENVAT Rules is not admissible to the appellant, question of fulfilling the aforesaid condition does not arise. In holding so, it followed the judgment of the Bombay High Court in the case of Ashok Traders v. Union of India [1987 (32) ELT 262], wherein the Bombay High Court had held that "it is impossible to imagine a case where in respect of raw nephtha used in HDPE in the foreign country, Central Excise duty leviable under the I .....

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itution Bench in the case of Hyderabad Industries Limited v. Union of India [1999 (5) SCC 15] = 2002-TIOL-369-SC-CUS-CB. In a recent judgment pronounced by this very Bench in the case of AIDEK Tourism Services Private Limited v. Commissioner of Customs, New Delhi (Civil Appeal No. 2616 of 2001) = 2015-TIOL-23-SC-CUS, the principle which was laid down in Thermax Private Limited and Hyderabad Industries Limited was summarised in the following manner: - "15. The ratio of the aforesaid judgment .....

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the Customs Act read with Section 2 of the Tariff Act. The explanation to Section 3 has two limbs. The first limb clarifies that the duty chargeable under Section 3(1) would be the excise duty for the time being leviable on a like article if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation deals with the situation where 'a like article is not so produced or manufactured'. The use of the word 'so' implies t .....

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h an article can likewise be manufactured or produced in India. For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary. For quantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon." (Emphasis supplied) 8. W .....

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e notification stipulated the condition that the exemption is not applicable if credit of duty on inputs or capital goods has been taken under CCR. 15. Further, we find the Hon'ble apex court in the case of AIDEX Tourism Services Pvt. Ltd. Vs CC (supra) has not only considered the cases of Thermax Private Ltd. and Hyderabad Industries Ltd. but also discussed the Apex Court's decision in the case of Motiram Tolaram Vs UOI (supra). The relevant para is extracted herein under :- "..... .....

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ing exemption notifications envisaging use of certain material within a factory and still held that an importer would be entitled to the benefit of the exemption notifications in view of Section 3 of the Tariff Act and the decisions in Hyderabad Industries and Thermal cases. As such, it is now settled that the rate of duty would be only that which an Indian manufacturer would pay under the Excise Act on a like Article. Therefore, the importer would be entitled to payment of concessional/reduced .....

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(supra) and referred the matter to a larger Bench. Reference order is reported as (2005) 8 SCC 164 = 2005 (188) E.L.T. 353 (S.C.). The Constitution Bench decided the said case, which is reported as (2011) 1 SCC 236. From the reading of para 39 to 41 of the said judgment it becomes clear that though these cases were held not applicable to the fact situation and were distinguished, the Court did not say that the aforesaid judgments were incorrectly decided. In fact, by distinguishing the ratio of .....

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