2016 (12) TMI 514 - AT - Customs

Tribunal Grants Cenvat Credit Appeal for Mobile Phone Importers

The Tribunal allowed the appeals, setting aside the denial of Cenvat Credit under notification No. 12/2012-CE for the import of mobile phones. It held ... Exemption from CVD - import of mobile phones - N/N. 12/2012-CE dated 17.3.2012 - The Notification No. 12/2012 also provided a concessional rate of CVD of 1% on import of mobile phones classified under CTI 8517 subject to the condition 16 of Notification No. 12/2012-CE, wherein the assessee should not have taken credit under the Cenvat Credit Rules, 2004 in respect of the inputs and capital goods used in the manufacture of these goods - Held that: - these mobile phones are imported and the cenvat credit has not been taken by a foreign manufacturer of the said goods. The said issue has been examined by Hon’ble Apex Court in the case of SRF Ltd. [2015 (4) TMI 561 - SUPREME COURT] where the CEGAT found 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 and thus the Hon’ble Supreme Court held that appellants were entitled to exemption from payment of CVD in terms of Notification No. 6/2002. After the impugned period and after the judgment of the SRF Ltd., department itself has given the benefit to the appellant for concessional rate of duty till the statutory amendment has taken place in notification No. 12/ 2012. Therefore, we hold that appellants are entitled for benefit of exemption by satisfying the condition No. 16 of notification no. 12/2012. In these terms, impugned orders are set aside - appeal allowed - decided in favor of appellant-assessee. Issues:Appeal against denial of Cenvat Credit under notification No. 12/2012-CE for import of mobile phones.Analysis:The case involved an appeal against the denial of Cenvat Credit under notification No. 12/2012-CE for the import of mobile phones. The appellants imported mobile phones and paid additional Customs duty as per the rates specified under the Central Excise Tariff Act. The dispute arose regarding the concessional rate of CVD provided under the notification, subject to the condition that no Cenvat Credit should have been taken for inputs and capital goods used in manufacturing the goods. The Revenue contended that the appellants did not meet this condition, thus disentitling them from the exemption.The appellant argued that the issue had been settled by the Hon'ble Apex Court in a previous case, citing the judgment in SRF Ltd. vs. Commissioner of Customs, Chennai. The Revenue, on the other hand, argued that since the duties were ad valorem based and the appellants sold goods on MRP, they were not eligible for the concessional rate of CVD. The Tribunal considered these arguments and examined the case in light of relevant legal principles.The Tribunal referred to the judgment in SRF Ltd. case and other legal precedents to analyze the matter. It highlighted that the denial of benefit based on the inadmissibility of Cenvat Credit was not valid, as per the legal principles established in previous judgments. The Tribunal emphasized that the conditions for exemption should be those that are possible to satisfy, and if a condition is impossible to fulfill, it should not be a basis for denial of benefits.Additionally, the Tribunal noted a similar case before the Delhi High Court, Micromax Informatics Ltd. vs. Union of India, where the Court held that a refund claim could be maintained even without a specific assessment order, as long as duties were paid. The Tribunal found that the appellants were entitled to the benefit of the exemption under notification No. 12/2012 by satisfying condition 16, as clarified by subsequent actions of the department itself post the impugned period. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.In conclusion, the Tribunal's detailed analysis of the legal provisions, precedents, and factual circumstances led to the setting aside of the denial of Cenvat Credit under notification No. 12/2012-CE for the import of mobile phones, granting the appellants the benefit of the exemption.