At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONORABLE JUSTICE: SULEKHA BEEVI
By, MEMBER AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
For Petitioner: Joseph Prabhakar, Advocate And For Respondents: B. Balamurugan, AC (AR)
1. The facts of the case are that the appellants had imported a consignment of silk fabrics in the month of March 2007 vide Bill of Entry dated 27.03.2007 and claimed benefit of Notification No. 30/2004-CE dated 09.07.2004, in respect of additional duty of customs equal to excise duty chargeable on imported silk fabrics classifiable under the Tariff item No. 5007. The original authority however held that the exemption was not available to the imported on the grounds that it was
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applicable only to the goods manufactured in India and not to the imported goods since there is a condition that there is no cenvat credit is availed on inputs. On appeal, the Commissioner (Appeals) vide impugned order date 03.12.2009 held that the appellants had not produced any evidence to show that they claimed the benefit of notification at the time of assessment, nor had they made the assessing officer known that they were aggrieved over the assessment order. On these grounds he rejected the appeal as not maintainable. Hence this appeal C/82/2009 before this forum.
2. Today when the matter came up for hearing, Ld. Advocate Shri Joseph Prabhakar, fairly informs that on identical issue which had been agitated before the Hon'ble High Court of Madras in the case of CC (Exports), Chennai Vs. Prashray Overseas Pvt. Ltd : 2016 (338) ELT 44 (Mad.), in which judgment, the issue has been held against the appellants.
3. We find it to be so. Para 59 and 60 of the said judgment are relevant in this regard and are reproduced below for better appreciation of the facts:
59. Therefore, in the absence of any material to show that the processes indicated above would involve inputs, none of which would attract duty of excise, it is not possible to conclude that the first respondent would satisfy both conditions namely (a) payment of duty on the inputs and (b) the non availing of Cenvat credit on the same. Though the Notification Bearing No. 30/2004, dated 9-7-2004 does not stipulate the first condition, we have held that the first condition is inbuilt into the second condition. Therefore, the first respondent cannot be taken to have fulfilled the condition stipulated in the proviso to the Notification No. 30/2004 dated 9-7-2004, unless he had shown that in the entire process of manufacture of woven silk fabrics falling under Tariff Item No. 5007, there are no inputs (used directly or indirectly and whether found in the final product or not), which attract any levy of duty under tariff items relevant to those inputs.
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 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 where the exemption Notification stipulates two conditions, namely that the inputs should have suffered duty and that no Cenvat credit should have been availed, then the benefit of the Notification will be available only if both conditions are satisfied. An importer will never be able to satisfy both these conditions and hence, he cannot claim the benefit.
4. Following the ratio of the above judgment, we find that the appeal has no merit for which reason it is dismissed