Conditional exemption for duty-paid inputs and no Cenvat credit failed where the importer could not satisfy both requirements.

Imported silk fabrics under Heading 5007 were denied countervailing duty exemption under Notification No. 30/2004-CE because the notification was conditional and required cumulative satisfaction of two requirements: duty-paid inputs and non-availment of Cenvat credit. The stated non-availment condition was treated as carrying the further requirement that the inputs used in manufacture must have suffered duty. As the importer could not meet the duty-paid-input condition in the relevant sense, the exemption claim failed and the impugned order was left undisturbed.

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Issues: Whether imported silk fabrics falling under Heading 5007 of the Central Excise Tariff Act, 1985 were eligible for exemption from countervailing duty under Notification No. 30/2004-CE dated 09.07.2004 when the importer could not satisfy the condition that the inputs used in manufacture had suffered duty and no Cenvat credit had been availed.

Analysis: The notification was treated as conditional and restrictive. The condition that Cenvat credit should not have been taken was held to carry within it the further requirement that the inputs must have suffered duty. For imported goods, that requirement could not be met by the importer in the relevant sense. The legal effect of the earlier High Court ruling was that, where the notification is structured on payment of duty on inputs and non-availment of Cenvat credit, both conditions must be satisfied for exemption.

Conclusion: The importer was not entitled to the exemption and the claim for relief failed.

Final Conclusion: The appeal was rejected because the exemption conditions were not fulfilled and the impugned order was left undisturbed.

Ratio Decidendi: Where an exemption notification granting countervailing duty relief is conditioned on duty-paid inputs and non-availment of Cenvat credit, both conditions must be cumulatively satisfied, and an importer who cannot meet the duty-paid-input requirement cannot claim the exemption.

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