TaxTMI 
TaxTMI 
2023 (3) TMI 958
X X X X Extracts X X X X
X X X X Extracts X X X X
....denied the benefit of Central Excise Notification No. 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 on the additional duty of Customs. In these appeals this denial of the benefit of this notification is the only issue under challenge. 2. The details of the 17 appeals are as follows: S. No. Appeal Appellant Respondent Impugned order 1 C/52158/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 2 C/52159/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 3 C/52160/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 4 C/52161/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 5 C/52162/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 6 C/52163/2016 SOIR INTERNATIONAL COMMISSIONER OF CUSTOMS, PATPAR GANJ Order in Appeal DII/ICD/325-332 dated 23.8.2016 7 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tral Government has the power to issue exemption notifications exempting duties of customs (both BCD levied under the Customs Act and the CVD levied under the Customs Tariff Act) under Section 25 of Customs Act, 1962 and also has the power to issue exemption notifications exempting duties of Central Excise under section 5A of the Central Excise Act, 1944. Thus, CVD can be exempted by a Customs Notification and can also be exempted by a Central Excise notification because whatever is exempted as Central Excise duty automatically gets exempted as CVD. The exemption notifications can be full or partial, and could be unconditional or conditional. If the exemption notification is conditional, the conditions must be fulfilled to be entitled to the exemption notification. 5. The disputed exemption notification is 30/2004-CE dated 9.7.2004 was available subject to the condition that the goods were manufactured without availing the benefit of CENVAT credit on inputs. It read as follows: Textiles and Textile Articles - Effective rate of duty to specified goods of Chapters 50 to 63 In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellulose acetate, cupro or alginates. 7. 5402.10, 5402.41, 5402.49, 5402.51, 5402.59, 5402.61, 5402.69 Nylon filament yarn or polypropylene multifilament yarn of 210 deniers with tolerance of 6 per cent. 8. 55.05 All goods, except such goods which arises during the course of manufacture of filament yarns, monofilaments, filament tows or staple fibres or manufacture of textured yarn (including draw twisted and draw wound yarn) of heading Nos. 54.02, 54.03, 55.01, 55.02, 55.03 or 55.04. Explanation. - For the purposes of this exemption, "manufacture of filament yarns, monofilaments, filament tows or staple fibres" means manufacture of filaments or staple fibres of organic polymers produced by processes, either : (a) by polymerization of organic monomers, such as polyamides, polyesters, polyurethanes, or polyvinyl derivatives; or (b) by chemical transformation of natural organic polymers (for example cellulose, casein, proteins or algae), such as viscose rayon, cellulose acetate, cupro or alginates. 9. 55.08, 55.09, 55.10, 55.11, 55.12, 55.13, 55.14 All goods 10. 55.06, 55.07 Staple fibres procured from outside and subjected to carding, com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 30/2004-Central Excise, dated the 9th July, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 421(E), dated the 9th July, 2004, namely :- In the said notification, in the opening paragraph, after the proviso, the following Explanation shall be inserted, namely :- "Explanation. - For the purposes of this notification, appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force.". 8. As far as the goods manufactured in India are concerned, the legal position is clear that prior to the amendment dated 17.7.2015, the exemption was available if no CENVAT credit was availed and after this date, duty should also have been paid (and such duty could be nil rate of duty) on the inputs and no CENVAT credi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pinion that the aforesaid reasoning is no longer good law after the judgment of this Court in 'Thermax Private Limited v. Collector of Customs (Bombay), New Customs House' [1992 (4) SCC 440 = 1992 (61) E.L.T. 352 (S.C.)] which was affirmed by the Constitution Bench in the case of 'Hyderabad Industries Limited v. Union of India' [1999 (5) SCC 15 = 1999 (108) E.L.T. 321 (S.C.)]. In a recent judgment pronounced by this very Bench in the case of 'AIDEK Tourism Services Private Limited v. Commissioner of Customs, New Delhi' [Civil Appeal No. 2616 of 2001 - 2015 (318) E.L.T. 3 (S.C.)], 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 ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion where all the inputs were manufactured in India, duty has been paid and no rebate was claimed and they were exported and using these inputs the goods are manufactured which are then imported into India). 11. The case of the appellants is that they are entitled to the benefit of the exemption notification even after the amendment on 17.7.2015 and it is the case of the Revenue that the appellants are not entitled to this benefit after the amendment. 12. Learned counsel for the appellants made the following submissions. (a) As far as the period prior to 17.7.2015 is concerned, it has been held by the Supreme Court in SRF Ltd. that the benefit of the exemption notification 30/2004-CE will be available for the CVD payable on imported goods. (b) After the amendment on 17.7.2015, the additional condition was that appropriate amount of Central Excise duty should have been paid on inputs. The explanation inserted on 21.07.2015 further clarifies that the rate of duty could be NIL. (c) Thus, as far as imported goods are concerned, since the inputs were manufactured outside India, no central excise duty was payable and it was not paid. Even payment of duty ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o like goods if manufactured in India. Any exemption notifications available to the goods manufactured in India will, likewise, be available to the imported goods. If there are any conditions attached to any notification, they will also apply to the imported goods as they apply to the goods manufactured in India. (f) The imported goods cannot be put on a better footing than the goods manufactured in India. (g) He placed reliance on the judgments of the Madras High Court in Commissioner of Customs (Exports) Chennai vs Prashray overseas Pvt. Ltd. [2016(338) ELT 44 (Mad.)] and M/s. HLG Trading vs UOI [2016 (331) E.L.T. 561 (Mad.)] which dealt with the availability of the exemption notification after 17.7.2015 for the CVD on imported goods which squarely cover the issue in favour of the Revenue. (h) Since this is the order of the High Court, it prevails over the contrary decision of this Tribunal. 14. We have considered the submissions on both sides and perused the records. The short question to be decided is whether or not the appellants would be entitled to the benefit of the exemption notification 30/2004-CE dated 9.7.2004 as amended by Notification No.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it will put the domestic industry at a disadvantage and unduly favour the imported goods. To claim the benefit of the same exemption notification, the domestic industry will have to manufacture it out of duty paid inputs while the imported goods will get this benefit without paying duty on the inputs. Any exemption notification must be strictly interpreted as it is drafted and there cannot be any intendment while interpreting it. The person claiming the benefit of the notification will have to fulfill all the conditions in the notification. If the conditions are not fulfilled, the benefit is not available. Evidently, the condition of the goods being manufactured out of duty paid inputs is impossible or at least extremely unlikely to be fulfilled in imported goods. It is not even disputed that this condition was not fulfilled. The submission is that this condition should not apply to imported goods. We cannot agree with this submission. The notification does not draw a distinction or make an exception to imported goods. 20. Although notifications must be literally interpreted, even if the notification is viewed from the point of view of equity, it is an established and accep....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 24. The appellants‟ submission is that since the explanation says that payment includes payment at NIL rate of duty and since the inputs used in manufacture of the imported goods are not chargeable to central excise duty (being manufactured out of the jurisdiction of the Central Excise Act), such non-payment of duty should be considered as payment of duty at NIL rate. In our considered view, this explanation has been misconstrued to mean that although duty has to be paid on the inputs to avail the benefit of the exemption notification, it is okay even if it is not paid. If the explanation is interpreted so, the condition itself become otiose. The condition envisages circumstances in which duty is paid on the inputs and circumstances in which the duty is not paid on the inputs and it clearly excludes the latter from the scope of the exemption. However, it may happen that duty is paid on the inputs and on some or all the inputs the rate of duty itself is NIL. In such a case, if duty is not paid on such inputs because the rate of duty is NIL, it does not result in deprivation of the benefit of the exemption notification which is the correct interpretation of the explanation. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Prashray Overseas, the Madras High Court held as follows: 60. Hence, in fine, the propositions of law that would emerge out of the above discussion, can be summed up as follows : (i) In cases where the exemption Notifications are absolute and they do not make the benefit available only upon the fulfillment of any condition, even the importer would be entitled to the benefit of exemption. (ii) In cases where the Notifications for exemption stipulate only one condition namely that the inputs used in the manufacture of the exempted goods should have suffered a duty, then the benefit of the Notification will not be available to any of the importers, 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 domest....