TaxTMI 
TaxTMI 
2017 (11) TMI 552
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....anufacturer of such goods (and not the buyer of such goods), under the provisions of Cenvat Credit Rules, 2004. The exemption was denied to the respondent on the ground the importer does not fulfill this condition. The impugned order, which was passed on the appeals filed by the respondent, set-aside the impugned original orders disallowing the exemption and allowed the benefit to the respondent. Reliance was placed on the decision of Hon'ble Supreme Court in SRF Ltd-2015 (318) ELT 607 SC and affirmed that in the review by the Hon'ble Supreme Court by dismissal of the review petition of the Revenue vide order dated 15.07.2016-2016 (340) ELT A202 SC. (2) In the present appeal, Revenue contested the above findings. It is submitted that notification No.34/15 CE dated 17.07.2015 has amended proviso in the Notification No.30/2004 CE dated 09.07.2004 which provides for the condition. It is submitted that the Commissioner had not taken the legal position after the amendment of the condition and passed the order erroneously. The amendment as clarified by circular dated 21.07.2015 makes it clear that as the importer is not a manufacturer, the exemption from additional duty is not available....
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.... Madras High Court in the case of Prashray Overseas Pvt. Ltd (supra), which are as follows:- "45. Wherever the Notifications prescribed conditions, which were merely procedural in nature, but did not involve the payment of any duty of excise on the inputs, the Court interpreted the Notifications in favour of the assessee, in view of the fact that an importer could not comply with those procedural formalities. But, wherever the Notifications imposed either (i) a condition that the input used for the manufacture of the exempted goods, should have suffered a duty or (ii) a condition that duty ought to have been paid and Cenvat credit not claimed, the Court interpreted such Notifications in favour of the Revenue (except perhaps in the case of Aidek and SRF). 46. It must be pointed out at this stage that one cannot make a distinction between (i) a Notification, which merely stipulates a condition that the manufacturer ought not to have claimed Cenvat credit in respect of the duties paid on the inputs and (ii) a Notification that imposes a condition that a duty of excise should have been paid on the inputs and no Cenvat credit should have been claimed in relation to the same. This is ....
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....since he could have never paid any duty of excise on the inputs used in their manufacture by the foreign manufacturer. This proposition is based upon the premise that the object of such Notifications is only to grant exemption to those final products, on which, some duty has been paid (in India) at the stage of inputs. In other words, Notifications of this nature, are not merely conditional, but also restrictive in nature, as they confer benefit not upon all manufacturers of exempted goods, even if they are domestic manufacturers, but only upon those, who use inputs that had suffered duty. (iii) In cases where the exemption Notification stipulates only one condition namely that no Cenvat credit ought to have been availed on the inputs, the benefit of the Notification will be available only to those, who satisfy two conditions namely that the inputs used by them suffered a duty and that they did not seek Cenvat credit. Since an importer can never satisfy the first condition, the second condition becomes inapplicable to him and he cannot be heard to contend that the inapplicability of the condition by itself would make him eligible for the grant of the benefit. (iv) In cases whe....
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....2015 (318) E.L.T. 607 (S.C.)] relating to CVD exemption, has held that the benefit of excise duty exemption [available to final products manufactured by the domestic manufacturer, subject to the condition of non-availment of CENVAT credit of duty on inputs or capital goods used by such manufacturer for manufacture of such final products] will also be available to the importers of such final products for the purposes of CVD on the ground that the importer was not availing the credit of duty on inputs or capital goods. 2. The implication of the Hon'ble Supreme Court judgment was that all such final products when imported by manufacturer importer would have attracted concessional excise duty as CVD, while the domestic manufacturer of such final products had to forgo input tax credit to be eligible for such concessional rate. This would put the domestic manufacturers at a disadvantage vis-a-vis imports and would adversely impact the Make in India Policy of the Government. 3. The judgment of the Hon'ble Supreme Court was examined in CBEC and it was found that there were certain errors apparent on record/interpretational issues and. with the concurrence of the Ld. Attorney General, a R....
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....dmittedly, there is no Cenvat credit availed by the manufacturer of the imported goods, neither the buyer/importer availed any such credit. As such, we find the amendment will not act as a bar for extending benefit to the present impugned goods from payment of CV duty. (7) The legal position with reference to levy of additional duty of customs was examined at length by the Hon'ble Supreme Court in M/s Aidek Tourism Services Pvt Ltd, 2015 (318) ELT 3 (SC). The observation of the Apex Court is as below: "15. The ratio of the aforesaid judgment in Thermax Private Limited (supra) was relied upon by this Court in Hyderabad Industries Ltd. (supra) while interpreting Section 3(1) of the Tariff Act itself; al beit in somewhat different context. However, the manner in which the issue was dealt with lends support to the case of the assessee herein. In that case the Court noted that Section 3(1) of the Tariff Act provides for levy of an additional duty. The duty is, in other words, in addition to the Customs duty leviable under Section 12 of the Customs Act read with Section 2 of the Tariff Act. The explanation to Section 3 has two limbs. The first limb clarifies that the duty chargeable un....
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....n 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary." The Court further referred with approval to the rationale of the provision as laid down in Thermax case (supra) in the following terms : "... As observed by this Court in Thermax (P) Ltd. v. Collector of Customs (at SCC pp. 452-53, para 11) that Section 3(1) of the Customs Tariff Act : "specifically mandates that the CVD will be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. In other words, we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of excise duty that he would have been called upon to pay in that event". To our mind the genesis of Section 3(1) of the Customs Tariff Act has been brought out in the aforesaid observations of this Court, namely, that for the purpose of saying what amount, if any, of additional duty is leviable under Section 3(1) of the Customs Tariff Act, it has to be imagined that the articles imported had been manufactured or produced in India and then to see what amou....
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....Notification No.64/93-CE, the principle in Thermax Private Limited (supra) would clearly become applicable. We may point out that a specific query was put to the learned counsel for the Revenue to the effect that if the importer is not deemed as manufacturer for the purpose of applicability of the said notification, then there cannot be a situation where such benefit of this Notification would be extended to any person, inasmuch as, it was almost impossible to visualise a situation where a foreign manufacturer would import the saloon cars in this country and would utilise those cars for tourist taxis. Learned counsel for the Revenue had no answer or reply to our query. It is obvious that the purpose of exemption Notification No.64/93-CE was to extend benefits to the importers of saloon cars to use the said cars for tourist taxis. Going by the spirit and the objective behind this Notification, the irresistible conclusion would be to apply the principle of Thermax Private Limited (supra) in the present case as well." (8) In Enterprises International Limited (supra), the Tribunal examined at length the availability of exemption under Notification No.30/2004-CE dealing with almost id....
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....enous silk fabrics were not subject to central excise duty during the material period in terms of Notification No.30/04-C.E. (supra). Therefore imported silk fabrics imported during the material period need not beat any CVD. The impugned imports are eligible for the exemption contained in Notification No.30/2004. This was also the ratio of our final order Nos.941, 942/2008, dated 28-82008 [2008 (232) E.L.T. 63 (Tribunal)] in respect of the same appellants for 44 consignments imported earlier. The appeal is allowed." 14. We find that Revenue relied on the Supreme Court's decision in the case of Motiram Tolaram v. UOI (supra) and the Tribunal's Larger Bench decision in Priyesh Chemicals & Metals (supra). In this regard the Hon'ble Supreme Court in their recent order in the case of SRF Ltd. v. CC, Chennai (supra) held that the appellants are entitled to exemption from payment of CVD under Notification No.6/2002 and allowed the civil appeal. The relevant Paras 3 to 8 of the said Supreme Court's order is reproduced as under :- "3. Entry/Serial No.122 in the Notification No.6/2002 reads as under: S. No. Chapter or heading No. or subheading No. Description of goods Rate under th....
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.... Customs, New Delhi (Civil Appeal No. 2616 of 2001) = 2015-TIOL-23-SC-CUS, the principle which was laid down in Thermax Private Limited and Hyderabad Industries Limited was summarised in the following manner:- "15. The ratio of the aforesaid judgment in Thermax Private Limited (supra) was relied upon by this Court in Hyderabad Industries Ltd. (supra) while interpreting Section 3(1) of the Tariff Act itself; albeit in somewhat different context. However, the manner in which the issue was dealt with lends support to the case of the assessee herein. In that case, the court noted that Section 3(1) of the Tariff Act provides for levy of an additional duty. The duty is, in other words, in addition to the customs duty leviable under Section 12 of the Customs Act read with Section 2 of the Tariff Act. The explanation to Section 3 has two limbs. The first limb clarifies that the duty chargeable under Section 3(1) would be the excise duty for the time being leviable on a like article if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation deals with the situation where "a like article is not so produced or manufactured"....
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....- (2009) 12 SCC 735 = 2009 (235) E.L.T. 214 (S.C.). In fact, in Lohia Sheets and Malwa Industries cases (supra), this Court was considering exemption notifications envisaging use of certain material within a "factory" and still held that an importer would be entitled to the benefit of the exemption notifications in view of Section 3 of the Tariff Act and the decisions in Hyderabad Industries and Thermal cases. As such, it is now settled that the rate of duty would be only that which an Indian manufacturer would pay under the Excise Act on a like Article. Therefore, the importer would be entitled to payment of concessional/reduced or nil rate of countervailing duty if any notification is issued providing exemption/remission of Excise duty for a like article if produced/manufactured in India. 16. We may mention that in the case of Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal & Ors. - (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.), a three Judge Bench of this Court had raised certain doubts on the correctness of the principle contained in Thermax Private Limited (supra) as well as in J.K. Synthetics (supra) and referred the matter to a larger Bench. Reference or....