Countervailing duty follows domestic excise liability, and exemption for like goods can defeat the CVD demand.

Additional customs duty under Section 3(1) of the Customs Tariff Act, 1975 is assessed by reference to the excise duty actually leviable on a like article if produced in India. On that basis, imported silk yarn and silk fabric were examined against Notification No. 30/2004-C.E., and the reasoning reflected settled precedent that, where the corresponding domestic goods are exempt and no Cenvat credit issue arises, the CVD demand is unsustainable. The text states that the issue was no longer res integra and that the earlier appellate order allowing the importer's exemption claim remained consistent with binding authority.

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Issues: Whether the importer was entitled to exemption from additional customs duty by relying on the excise exemption under Notification No. 30/2004-C.E. dated 09.07.2004 for the purpose of countervailing duty.

Analysis: The imported silk yarn and silk fabric were examined in the light of the exemption notification and the settled principle that additional duty under Section 3(1) of the Customs Tariff Act, 1975 is linked to the excise duty leviable on a like article if produced or manufactured in India. The reasoning adopted in earlier decisions and the Supreme Court authority on the identical issue showed that, where the corresponding domestic goods were exempt or no Cenvat credit question arose, the demand of CVD could not be sustained. The issue was treated as no longer res integra and the earlier appellate order in favour of the importer was found consistent with the binding precedents.

Conclusion: The importer was entitled to the exemption benefit and the demand of CVD was not sustainable.

Final Conclusion: The Revenue's challenge failed and the order allowing the respondent's claim was left undisturbed.

Ratio Decidendi: Additional customs duty must be assessed by reference to the excise duty actually leviable on a like article in India, and where the corresponding domestic goods are exempt in a manner that makes the CVD levy unsustainable, the importer is entitled to the same exemption benefit.

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