Cenvat credit condition cannot deny concessional CVD to an importer under an identically worded exemption notification.

Concessional CVD under Notification No. 1/2011-C.E. could not be denied to an importer on the ground that the manufacturer had to satisfy the condition of non-availment of Cenvat credit. The Tribunal applied the Supreme Court's interpretation of an identically worded notification and held that this condition is inapplicable to an importer because Cenvat credit is not available to the importer, so the requirement cannot be enforced against it. On that basis, the importer was held entitled to the concessional duty benefit and the denial of exemption was unsustainable.

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Issues: Whether the importer was entitled to concessional countervailing duty under Notification No. 1/2011-C.E. as amended, notwithstanding the condition relating to non-availment of Cenvat credit by the manufacturer.

Analysis: The imported polyester staple fibre claimed concessional CVD under the notification prescribing 2% duty subject to the condition that no Cenvat credit should be availed by the manufacturer. The authorities denied the benefit on the footing that the condition was not satisfied. The Tribunal applied the ratio of the Supreme Court in an identically worded notification, holding that the condition of non-availment of Cenvat credit could not be pressed against an importer because Cenvat credit was not admissible to the importer and the question of fulfilling that condition did not arise. As the relevant condition in the present notification was identical, the same legal principle governed the dispute.

Conclusion: The importer was entitled to the concessional CVD benefit, and the denial of exemption was unsustainable.

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