TaxTMI 
TaxTMI 
2014 (6) TMI 335
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....ions. The department was of the view that the goods under import are chargeable to CVD @ 5% adv. in terms of Notification No. 2/11-C.E., dated 1-3-2011 wherein the said rate has been prescribed on the said goods unconditionally. Accordingly, the goods were assessed to CVD @ 5% adv. against which the appellant preferred an appeal before the lower appellate authority. The lower appellate authority vide the impugned order rejected the appeals and hence, the appellants are before us. 4. The learned Counsel for the appellants submits that there are two rates prescribed for the impugned goods, namely, intravenous fluid - one @ 1% ad valorem in terms of Notification No. 1/11 and, the other @ 5% ad valorem in terms of Notification No. 2/11. They have chosen the 1% ad valorem rate which is more beneficial to them. The argument of the department that the rate of 1% ad valorem would not apply to them is incorrect for the reason that the condition prescribed for availing the said rate is that the manufacturer should not have availed CENVAT credit of the duty paid inputs or Service Tax paid on the input services under the provisions of Cenvat Credit Rules, 2004. The appellant herein is ....
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....ld not arise and, therefore, the Notification should be interpreted in a harmonious way, so as to construe that the imported goods should be used in the same factory for manufacture of textile and textile articles. 4.2 The ld. Advocate also relies on the decision of this Tribunal in the case of Mapsa Tapes Pvt. Ltd. reported in 2009 (247) E.L.T. 188 (Tri.-Del.) wherein a dispute arose as to whether the Excise duty rate prescribed for goods falling under Chapter Heading Nos. 5004 and 5005 subject to the condition that no credit of duty on inputs and capital goods have been taken under the provisions of Cenvat Credit Rules, 2002, could be applied for the levy of CVD in respect of imports of the said goods. It was held by this Tribunal that words "provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of Cenvat Credit Rules, 2002" are in form of exclusion to the exemption notification and not occurring as a condition for availing the notification and, hence the said rate could be applied for the purposes of levy of CVD. 4.3 The learned Counsel also r....
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....ification No. 19/88-C.E. exemption was provided on Zinc Ash subject to the condition that no credit of duty paid on the inputs used in the manufacture of goods have been taken under Rule 56A or Rule 57A of the Central Excise Rules, 1944. The importer appellant, who imported Zinc Ash from abroad claimed the benefit of the said notification for the purposes of levy of CVD. The Larger Bench held that Central Excise Act and the Rules do not apply to manufacturers situated abroad and therefore, the appellant's claim that the imported goods fulfilled the requirement of the notification has no substance or basis and accordingly, benefit of Notification No. 19/88-C.E. was denied in respect of imported Zinc Ash. 5.3 The learned AR also relies on the clarification issued by the C.B.E. & C. vide Instruction No. B-1/3/2011-TRU, dated 25-3-2011. In the said instruction, the C.B.E. & C. has clarified that the benefit of 1% ad valorem would not be available for the purpose of levy of CVD, since it is subjected to the condition of non-availment of credit and, therefore, in respect of imported goods, CVD has to be levied @ 5% ad valorem in respect of Intravenous fluids. In the light of thes....
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....2) (3) 20 30 Intravenous fluids, which are used for sugar, electrolyte or fluid replenishment From the above, it can be seen that the benefit of 1% ad valorem is available subject to the condition of non-availment of CENVAT credit of the duty paid on inputs or the tax paid on input services under Cenvat Credit Rules, 2004. Unless this condition is satisfied, the benefit of 1% of duty cannot be granted. The question of taking CENVAT credit under the CENVAT Credit Rule, 2004 does not arise in the case of imported goods and, therefore, this condition cannot be satisfied in respect of imported goods. Hence, the imported goods will not be eligible for the benefit of duty exemption under this Notification. 6.2 An identical issue was considered by the Larger Bench (5 Member Bench) of this Tribunal in the case of Priyesh Chemicals & Metals (supra) in the context of Notification No. 19/88. The said notification provided Excise duty exemption on Zinc Ash subject to the condition that no credit of duty paid on the inputs used in the manufacture of said goods shall be taken under Rule 56A or Rule 57A of the Central Excise Rules, 1944. The question considered by the Large....
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....used in the same factory for the manufacture of textiles and textile articles". The issue before the Hon'ble Apex Court which is the factory, referred to in the notification, that is the factory of manufacture of dyestuffs or the factory of manufacture of textiles and textile articles. The Hon'ble Supreme Court held that it is the factory of textiles and textile articles which is relevant and so long as the imported goods are used in the factory of manufacture of textiles and textile articles, the CVD exemption cannot be denied. In the facts of the case before us they are distinct and distinguishable. Though the imported goods satisfy the description given in Notification No. 1/2011, they do not satisfy the condition for availing the exemption, that is, non-availment of CENVAT credit of the duty paid on inputs or the tax paid on input services. This condition can be satisfied only in respect of goods manufactured in India. When this condition cannot be satisfied with respect to imported goods, the question of extending this rate for imported goods for the purpose of CVD does not arise at all and we hold accordingly. 6.4 Can we ignore the condition and extend the benefit to ....
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....ation.- In this sub-section, the expression "the excise duty for the time being leviable on a like article if produced or manufactured in India" means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty." The Explanation to the section makes it absolutely clear that when the goods manufactured in India are leviable to different rates of excise duty, CVD on like goods imported shall be at the highest rate of duty. 6.6 In his book "Principles of Statutory Interpretation", 12th Edition, 2010, Justice G.P. Singh explains the purpose of Explanation in page 212 as follows :- 'An Explanation is at times appended to a section to explain the meaning of words contained in that section. [S. Sundaram Pillai v. Pattabhiraman, (1985) 1 SCC 591, pp. 611, 613 : AIR 1985 SC 582; Dipak Chandra Ruhidas v. Chandan Kumar Sarkar; (2003) 7 SCC 66, p. 71 : AIR 2003 SC 370]. It becomes a part and ....
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....rposes. There should have been no confusion on the subject. Since the CVD is levied to provide a level playing field for the domestic manufacturers, CVD is charged at a rate equal to excise duty rate. However, in respect of these 130 items, there are two excise duty rates. It needs to be appreciated that if CVD is levied @ 1%, the protection for the domestic manufacturer would be lest since in the country of origin, the overseas supplier enjoys input tax neutralization on goods exported to India (akin to availment of input tax credit), whereas on the other hand the domestic manufacturer suffers all the input taxes and 1% excise duty over and above that. Since 5% excise duty rate is payable when the cenvat credit of duties and taxes paid on inputs and input services is availed of, the tax treatment becomes equitable with the goods being imported into India, the input taxes having been neutralized in. the country of export. As such, the CVD of 5% will be applicable in respect of all the goods covered under Notification 1/2011-C.E., dated 1-3-2011 and 1% rate will not apply." 6.8 Though the above Circular is not binding on this Tribunal, due consideration needs to be given as ....