Concessional CVD entitlement upheld under binding interpretation of exemption conditions and statutory fiction for additional duty.

Concessional CVD under the exemption notification was upheld because entitlement had to be tested in line with the Supreme Court's binding interpretation of the scheme. The Tribunal applied the statutory fiction governing additional duty, under which the imported goods are treated as if manufactured in India, and rejected the earlier view that an impossible condition could be treated as automatically satisfied. On that basis, the respondent's claim to the concessional rate remained valid and the departmental challenge failed, sustaining the reassessment direction in favour of concessional duty.

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Issues: Whether the importer was entitled to concessional CVD under the exemption notification despite the objection that the condition relating to non-availment of CENVAT credit on inputs and capital goods had not been satisfied.

Analysis: The dispute was held to be covered by the binding ruling of the Supreme Court on the same legal question. The Tribunal noted that the Supreme Court had explained that, for levy and computation of additional duty, the statutory scheme proceeds on the basis of the imported article being treated as if it were manufactured in India, and that the earlier reasoning treating an impossible condition as automatically satisfied was no longer good law. Applying that binding principle, the Tribunal found that the respondent's claim to the concessional rate stood supported by the controlling precedent and that the departmental challenge did not survive.

Conclusion: The respondent was eligible for concessional CVD under the applicable exemption notification.

Final Conclusion: The departmental appeals failed and the reassessment direction in favour of concessional duty was sustained.

Ratio Decidendi: Where the Supreme Court has authoritatively construed the exemption scheme, the entitlement to concessional duty must be determined in accordance with that binding interpretation, including the statutory fiction governing additional duty and the conditions attached to the notification.

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