CVD exemption on imported goods survives where later amendment to the credit condition applies only prospectively.

Imported polyester blankets were assessed to countervailing duty under section 3(1) of the Central Excise Tariff Act, 1975, and the dispute concerned entitlement to exemption under Notification No. 30/2004-CE despite the condition that input credit had not been availed under the Cenvat Credit Rules, 2004. The Tribunal applied its earlier decision in the same matter and the Supreme Court's settled position on the scope of the exemption for imports, holding that later substitutions made by Notification No. 34/2015-CE and Notification No. 37/2015-CE operated prospectively only. The denial of CVD exemption was therefore unsustainable and the appeals were allowed with consequential relief.

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Issues: Whether the imported goods were entitled to exemption from Countervailing Duty under Notification No. 30/2004-CE despite the condition relating to non-availment of input credit, and whether the impugned denial of exemption was sustainable.

Analysis: The imported polyester blankets were assessed to Countervailing Duty under section 3(1) of the Central Excise Tariff Act, 1975. The exemption under Notification No. 30/2004-CE was subject to a condition that credit of duty on inputs had not been availed under the Cenvat Credit Rules, 2004. The Tribunal relied on its earlier decision in the appellants' own case and noted that the Supreme Court had already settled the scope of such exemption in the context of imports. It also distinguished the later amendments introduced by Notification No. 34/2015-CE and Notification No. 37/2015-CE as substituting the condition only prospectively.

Conclusion: The imported goods were entitled to the exemption and the denial of CVD exemption was unsustainable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Where the governing exemption for CVD on imported goods has been settled by binding precedent, later substitution of the exemption condition does not defeat the assessee's entitlement for the earlier regime.

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