TMI Blog2017 (11) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... said conditions are to be satisfied by the manufacturers of such goods and not the buyer/importer of such goods. From the contents of the circular and also amended entry of the proviso in Notification No.30/2004, we note that the legal position laid down by the Hon’ble Supreme Court on more than one occasions is continued to be relevant and applicable to the present case also. Admittedly, there is no Cenvat credit availed by the manufacturer of the imported goods, neither the buyer/importer availed any such credit. As such, we find the amendment will not act as a bar for extending benefit to the present impugned goods from payment of CV duty. The legal position with reference to levy of additional duty of customs was examined at length by the Hon’ble Supreme Court in M/s Aidek Tourism Services Pvt Ltd [2015 (3) TMI 690 - SUPREME COURT] and it was held that for the purpose of saying what amount, if any, of additional duty is leviable under Section 3(1) of the Customs Tariff Act, it has to be imagined that the articles imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon. The exemption of additional duty of custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable to them. Reliance was placed by the Revenue on the decision of Hon ble Madras High Court in Prashray Overseas Pvt Ltd, 2016 (338) ELT 44 (Mad.). It is contended that the said decision of the High Court is applicable to the facts of the present case and the impugned orders are to be set aside. The ld AR reiterated these grounds during his submission. (3) The ld. Counsel for the respondent submitted that the Hon ble Madras High Court in M/s Prashray Overseas Ltd (supra) was examining the issue keeping in view the pendency of review petition before the Hon ble Supreme Court against the decision in SRF case (supra). The Apex Court dismissed the review petition filed by the Revenue on 15.07.2016. Covering the legal provisions of this notification, the matter was again decided by the Hon ble Supreme Court in Enterprises International Ltd, 2017 (346) ELT A130(SC). The Hon ble Supreme Court dismissed the appeal of Revenue against the decision of the Tribunal in 2017 (346) ELT 423 (Tri.-Chennai). The civil appeals are dismissed. The ld. Counsels submitted that the decision of Hon ble Madras High Court is not in line with the clear law laid down by the Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit should have been claimed in relation to the same. This is for the reason that the very entitlement to claim Cenvat credit would arise only in cases where a duty of excise had been paid on the inputs. For a person, who never paid a duty of excise, on the inputs used for the manufacture of exempted goods, the question of claiming Cenvat credit would never arise. 47. A Notification such as the one Bearing No.30/2004, dated 97-2004, which merely stipulates a condition that no Cenvat credit ought to have been availed in respect of the duties paid on the inputs, is in no way different from a Notification, which stipulates a condition that the inputs ought to have suffered a duty and no Cenvat credit should have been claimed on the same. . . .. 59. Therefore, in the absence of any material to show that the processes indicated above would involve inputs, none of which would attract duty of excise, it is not possible to conclude that the first respondent would satisfy both conditions namely (a) payment of duty on the inputs and (b) the non-availing of Cenvat credit on the same. Though the Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. (iv) In cases where the exemption Notification stipulates two conditions, namely that the inputs should have suffered duty and that no Cenvat credit should have been availed, then the benefit of the Notification will be available only if both conditions are satisfied. An importer will never be able to satisfy both these conditions and hence, he cannot claim the benefit. 7. On careful consideration of the judgement of the Hon ble Madras High Court in the case of CC(Exports), Chennai Vs. Prashray Overseas Pvt. Ltd., as above, we find that the Hon ble Court proceeded to decide the subject issue with the following observation:- 15. Contending that the amendment to the Notification is unconstitutional, inasmuch as it seeks to annual the effect of the decision of the Supreme Court in SRF Ltd., a batch of writ petitions have been filed before this Court. But simultaneously, the Central Government also moved a petition before the Supreme Court for a Review of the judgement in SRF Limited. On 9.9.2015, the Supreme Court condoned the delay and ordered notice in the 'Review Petition'. Therefore, we will have to examine the rival contentions, keeping in mind the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues and. with the concurrence of the Ld. Attorney General, a Review Petition/Revision Application has been filed against the same. 4. However, keeping in view the adverse implications of the aforesaid judgment on the domestic industry, legal opinion was sought from the Ministry of Law Justice as to whether pending the aforesaid Review Petition/Revision Application, such conditions in the relevant notifications be suitably amended so as to make the intention abundantly clear (that these conditions are to be satisfied by the manufacturers of such goods and not the buyer/importer of such goods). 5. In this context, opinion of the Ministry of Law Justice was also sought. With the concurrence of the Ld. Attorney General, notifications No.34/2015-C.E., No.35/2015-C.E. and No.36/2015-C.E. all dated 17-7-2015 were issued amending the conditions in notifications No.30/2004-C.E., dated 9-7-2004, No.1/2011-C.E., dated 1-3-2011 and No.12/2012-C.E. dated 17-3-2012, respectively. 6. In the above context, apprehensions have been raised about the use of the phrase of appropriate duty . In this regard. Explanations have been inserted in the notifications No.30/2004-C.E., da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is that the article is produced or manufactured in India. The second limb to the explanation deals with the situation where a like article is not so produced or manufactured . The use of the word so implies that the production or manufacture referred to in the second limb is relatable to the use of that expression in the first limb which is of a like article being produced or manufactured in India. The words if produced or manufactured in India do not mean that the like article should be actually produced or manufactured in India. As per the explanation if an imported article is one which has been manufactured or produced, then it must be presumed, for the purpose of Section 3(1), that such 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it has to be imagined that the articles imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon. This position has been reiterated in Motiram Tolaram v. Union of India - (1999) 6 SCC 375 = 1999 (112) E.L.T. 749 (S.C.), CCE v. J.K. Synthetics (2000) 10 SCC 393 = 2000 (120) E.L.T . 54 (S.C.), Lohia Sheet Products v. Commr. of Customs - (2008) 11 SCC 510 = 2008 (224) E.L.T. 349 (S.C.) and Collector of Customs (Preventive) v. Malwa Industries Ltd. - (2009) 12 SCC 735 = 2009 (235) E.L.T . 214 (S.C.) In fact, in Lohia Sheets and Malwa Industries cases (supra), this Court was considering 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 or nil rate of countervailing duty if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) In Enterprises International Limited (supra), the Tribunal examined at length the availability of exemption under Notification No.30/2004-CE dealing with almost identical sets of facts. The Tribunal recorded as below: 13. On the question of admissibility of CVD exemption, we find the Notification No.30/2004-C.E., dated 9-7-2004 at Sl. No.5 of table exempts excise duty on silk yarn and silk fabrics falling under Chapters 54.01 to 54.07. The proviso to the notification stipulates a condition that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of the CCR, 2002. This very issue was discussed in the case of Prashray Overseas Pvt. Ltd. [2009 (235) E.L.T. 300 (Tri.-Chennai). The relevant Paragraph 3 of the order is reproduced as under :- 3. We find that no Central Excise duty is payable on raw silk 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court s order is reproduced as under :- 3. Entry/Serial No.122 in the Notification No.6/2002 reads as under: S. No. Chapter or heading No. or subheading No. Description of goods Rate under the First Schedule Rate under the Second Schedule Condition No. 1 2 2 5402.10 Nylon filament Yarn or Polypropylene multifilament yarn of 210 deniers with tolerance of 6 percent. 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 3(1) of the Tariff Act provides for levy of an additional duty. The duty is, in other words, in addition to the customs duty leviable under Section 12 of 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 that the production or manufacture referred to in the second limb is relatable to the use of that expression in the first limb which is of a like article being produced or manufactured in India. The words if produced or manufactured in India‟ do not mean that the like article should be actually produced or manufactured in India. As per the explanation if an imported article is one which has been manufactured or produced, then it must be presumed, for the purpose of Section 3(1), that such an article can likewise be manufactured or produced in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the importer would be entitled to payment of concessional/reduced or nil rate of countervailing duty if any notification is issued providing exemption/remission of Excise duty for a like article if produced/manufactured in India. 16. We may mention that in the case of Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal Ors. - (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.), a three Judge Bench of this Court had raised certain doubts on the correctness of the principle contained in Thermax Private Limited (supra) as well as in J.K. Synthetics (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 paras 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 the said cases, the Constitution Bench impliedly gave its imprimatur to the principle laid down in the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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