Exemption from Special Additional Duty for imported knitted fabrics upheld despite pending review petition, following binding Supreme Court interpretation.

Benefit of exemption from Special Additional Duty under Notification No. 30/2004-CE was available to importers of 100% polyester knitted fabrics, because the Supreme Court had already held that the condition relating to non-availment of credit could not be applied to imported goods in that manner. The Tribunal further held that the mere pendency of a review petition did not justify departure from that binding ruling, as there was no stay or allowance of the review. The Revenue's objection was therefore rejected and the exemption extended to the importers.

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Issues: Whether the benefit of exemption from Special Additional Duty under Notification No. 30/2004-CE was available to the importers of knitted fabrics, and whether the pendency of a review petition against the Supreme Court decision affected the Tribunal's duty to follow that ruling.

Analysis: The goods were imported as 100% polyester knitted fabrics falling under Chapter 60 of the Customs Tariff Act, 1975, and the exemption claim was denied on the ground of non-fulfilment of the condition relating to non-availment of credit. The Tribunal noted that the Supreme Court had already interpreted Notification No. 30/2004-CE and held that, in the case of imported goods, the condition regarding non-availment of credit of duty paid on inputs or capital goods could not be satisfied, and the benefit had to be extended to the importers. The Revenue did not dispute the applicability of that to the facts, but relied only on the filing of a review petition. The Tribunal held that, in the absence of any stay or allowance of the review petition, judicial discipline required following the binding decision.

Conclusion: The exemption was held to be available to the importers, and the Revenue's objection based on the pending review petition was rejected.

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