TMI Blog2023 (3) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, it is impossible to have availed CENVAT credit on the goods manufactured outside India. Therefore, it is fair to assume that no CENVAT credit was availed on the inputs used in the manufactured of imported goods. Therefore, the condition that no CENVAT credit should have been availed is fulfilled with respect to imported goods. After 17.5.2015, a second condition has been added that Central Excise duty should have been paid on the inputs. Just as it is impossible for the manufacturer outside India to have availed CENVAT credit, it is equally impossible for Central Excise duty to have been paid on the inputs used in the manufacture of the goods. Therefore, it is reasonable to assume that this condition was not fulfilled with respect to imported goods just as it is reasonable to assume that no CENVAT credit has been availed. If the exemption notification is read as per the appellant‟s submissions, it will put the domestic industry at a disadvantage and unduly favour the imported goods. To claim the benefit of the same exemption notification, the domestic industry will have to manufacture it out of duty paid inputs while the imported goods will get this benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) [Impugned orders] on the same issue and hence they are being disposed of together. The appellants imported goods and self-assessed duty under section 17(1) and filed Bills of Entry which were re-assessed by the proper officers under section 17 (4) enhancing the duty. The appellants appealed to the Commissioner (Appeals) who, by the impugned orders, in each of the cases, partially allowed the appeals but denied the benefit of Central Excise Notification No. 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 on the additional duty of Customs. In these appeals this denial of the benefit of this notification is the only issue under challenge. 2. The details of the 17 appeals are as follows: S. No. Appeal Appellant Respondent Impugned order 1 C/52158/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 2 C/52159/2016 SOIR INTERNATIONAL COMMISSIONER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2016 Sedna Impex India Pvt. Ltd. COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/544-550 dated 3.7.2016 15 C/52763/2016 Sedna Impex India Pvt. Ltd. COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/544-550 dated 3.7.2016 16 C/52764/2016 Sedna Impex India Pvt. Ltd. COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/544-550 dated 3.7.2016 17 C/51605/2018 Elvance Overseas LLP COMMISSIONER OF CUSTOMS, Tughlakabad Order in Appeal CC(A)/CUS/D-II/ICD/PPG/521/2018 dated 22.3.2018 3. The undisputed legal position is that goods imported into India are chargeable to Customs duty under section 12 of the Customs Act, 1962 which is commonly referred to as Basic Customs Duty [ BCD] and additional duty of customs commonly referred to (somewhat inaccurately) as countervailing duty [ CVD] levied under Section 3 of the Customs Tariff Act, 1975. BCD is charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table, from whole of the duty of excise leviable thereon under the said Central Excise Act : Provided 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 CENVAT Credit Rules, 2002 , - Table S. No. Chapter or heading No. or sub- heading No. Description of goods (1) (2) (3) 1. 50.04, 50.05 All goods 2. 51.05, 5106.11, 5106.12, 5106.13, 5107.11, 5107.12, 51.08, 51.09, 51.10, 51.11, 51.12 All goods 3. 52.04, 5205.11, 5205.19, 5206.11, 5206.12, 52.07, 52.08, 52.09 All goods 4. 53 (except 53.01, 53.03, 5305.31, 5305.39, 5306.90, 53.07, 5308.11 and 5308.90) All goods 5. 54.01, 54.04, 54.05, 54.06, 54.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04. 11. 56 (except 5601.10, 5607.10, 5608.11) All goods 12. 5702.19, 5703.90 All goods 13. 58 (except 5804.90, 5805.90, 58.07, 5808.10) All goods 14. 59 (except 5907.30) All goods 15. 60 All goods 16. 61, 62, 63 (except 6307.10) All goods 6. Subsequently, it was amended by Notification No. 34/2015-CE dated 17.7.2015 adding one more condition that on the appropriate amount of duty should have been paid on the inputs which are used in the manufacture of the products. It read as follows: In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of duty) on the inputs and no CENVAT credit should have been availed. 9. The question which arises is will the benefit of this notification be available for the CVD on imported goods. With respect to the notification as it was before 17.7.2015, the requirement was only that no CENVAT credit should have been availed on the inputs used in the manufacture of the goods. In case of goods which are imported, since they are manufactured outside India it is not possible for the manufacturer to avail CENVAT credit at all. It has been decided by the Supreme Court in SRF Ltd. vs Commissioner of Customs, Chennai [2015(318)ELT 607] that the benefit would be available. Relevant portions of this judgment are reproduced below: 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 : If no credit under Rule 3 or Rule 11 of the Cenvat Credit 20. Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods. 5. The aforesaid condition is to the effect that the importer sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional 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 India. For the purpose of attracting addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L rate also satisfies this condition and therefore, the benefit of the exemption even after amendment, is available on CVD on imported goods. (d) They rely on the following orders of the Tribunal to assert that the benefit of the exemption notification is available to imported goods even if no central excise duty is payable on the inputs used in the manufacture of the goods. (i) Commissioner of Customs (Port) vs M/s. Enterprise International Ltd. decided by F. No. 76658-76659/2018 dated 20.9.2018 (ii) Commissioner of Customs vs M/s. Enterprise International decided by F.No dated 17.1.2019 (iii) M/s. Artex Textiles Pvt. Ltd. vs Commissioner of Customs, ICD, Patparganj decided by F.NO. dated 24.7.2019 (iv) Sedna Impex India Pvt. Ltd. vs CC Mundra decided by the Ahmedabad bench of this Tribunal by Final Order No. A/10106-10190/2022 dated 18.2.2022 (e) Therefore, all these appeals may be allowed and the impugned orders need to be modified to the extent of allowing the benefit of Notification No. 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 on the CVD on imported goods. 13. Learned departmental representative for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. 15. Before 17.7.2015, the only condition in the exemption notification was that no CENVAT credit should have been availed on the inputs used in manufacture of the goods. It is obvious that the CENVAT credit will not be available at all if the goods are manufactured outside India and therefore, it is impossible to have availed CENVAT credit on the goods manufactured outside India. Therefore, it is fair to assume that no CENVAT credit was availed on the inputs used in the manufactured of imported goods. Therefore, the condition that no CENVAT credit should have been availed is fulfilled with respect to imported goods. 16. After 17.5.2015, a second condition has been added that Central Excise duty should have been paid on the inputs. Just as it is impossible for the manufacturer outside India to have availed CENVAT credit, it is equally impossible for Central Excise duty to have been paid on the inputs used in the manufacture of the goods. Therefore, it is reasonable to assume that this condition was not fulfilled with respect to imported goods just as it is reasonable to assume that no CENVAT credit has been availed. 17. The appellants also do not claim at all that the ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny taxes are paid on final products which are exported or on the inputs used for their manufacture, they are reimbursed to the exporter in some form or the other by the government of the exporting country. Thus, it is not unreasonable to assume that any inputs which have gone into the manufacture of the imported goods have not suffered any taxes in the exporting country. Goods manufactured in India, on the other hand, to avail the benefit of this notification have to be manufactured out of duty paid inputs. Thus, if the benefit of this exemption notification is extended to imported goods, the domestic industry will be at a distinct disadvantage. So, even from the point of view, there cannot be two rules for the domestic industry and imported goods by requiring the domestic industry to fulfill the condition and not insisting the imported goods to fulfill the same conditions. 21. Another internationally accepted principle of trade is National Treatment‟ which subjects the imported goods to the same restrictions as are applicable to domestically manufactured goods. If the appellant‟s submissions are accepted, it will result in preferential treatment to imported goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification had only one condition that no CENVAT credit should have been availed. It was not in dispute that no CENVAT credit was availed in that case but the Tribunal denied the benefit of the exemption notification because the CENVAT credit could not have been availed. The tribunal held that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied . This decision was overturned by the Supreme Court. Thus, when it is evident that the condition of not availing the benefit of CENVAT credit has been fulfilled, you cannot treat it as not satisfied. If it is evident that the condition is satisfied, it has to be taken as satisfied and vice versa. 26. The second condition introduced after the amendment was that the excise duty should have been paid on the inputs used in the manufacture of the goods. This condition was evidently not satisfied in these appeals because if the goods are manufactured outside India with inputs manufactured outside India, excise duty could not have been paid. Thus, after the amendment, there will be no change in the negative stipulation in the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the exemption Notification stipulates only one condition namely that no Cenvat credit ought to have been availed on the inputs, the benefit of the Notification will be available only to those, who satisfy two conditions namely that the inputs used by them suffered a duty and that they did not seek Cenvat credit. Since an importer can never satisfy the first condition, the second condition becomes inapplicable to him and he cannot be heard to contend that the inapplicability of the condition by itself would make him eligible for the grant of the benefit. (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. 61. Therefore, we answer both questions of law against the assessee. As a consequence, the appeals of the Revenue are allowed. No costs. 28. An appeal against the judgment was filed before Supreme Court [ 2017 (355) E.L.T. A151 (S.C.)] but it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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