1986 (1) TMI 110 - HC - Central Excise

Court grants petitioners exemption from countervailing duty on imported polyamide chips

The court ruled in favor of the petitioners in a case concerning the interpretation of exemption notifications for countervailing duty on imported ... Customs - Countervailing duty - Polyamide chips Issues:1. Interpretation of exemption notification for countervailing duty on imported polyamide chips.2. Classification of polyamide chips under customs duty and excise duty.Analysis:The petitioners imported polyamide chips and claimed exemption from countervailing duty based on a central excise notification. The Collector of Customs assessed countervailing duty on the polyamide chips under customs tariff item 82(3) and item 15A of the excise tariff, stating that the exemption was not unconditional. The petitioners argued that the chips should be classified under a residuary item for customs duty and were not liable for countervailing duty. The Central Board of Excise and Customs rejected the appeal, leading to a revision application being dismissed.The court referred to a Division Bench judgment classifying polyamide chips under item 82(3) for customs duty and item 15A for excise duty. The court also considered a previous case where the exemption notification provided for exemption from excise duty under certain conditions. The petitioners stated the imported chips would be used for manufacturing nylon yarn, which was not disputed by the respondents. The court held that the conditions of the exemption notification were satisfied, and the chips were not liable for countervailing duty.Consequently, the court quashed the order requiring payment of countervailing duty on the polyamide chips and directed the refund of the duty amount paid by the petitioners. The judgment emphasized the satisfaction of conditions in the exemption notification for granting the exemption from countervailing duty, ultimately ruling in favor of the petitioners and setting aside the duty payment requirement.