Customs, Excise and Gold Tribunal - Tamil Nadu
Srf Ltd. vs Cc on 2 May, 2003
Equivalent citations: 2003(110)ECR358(TRI.-CHENNAI)
ORDER V.K. Agrawal, Member (T)
1. In this Appeal filed By M/s. SRF Ltd., the issue involved is whether benefit of exemption under Notification No. 6/2002 dated 1.3.2002 (S. No. 122) is available to the goods imported by the Appellants.
2. Shri B.L. Narsimhan, learned Advocate, submitted that the Appellants had imported Nylon Filament yarn of 210 deniers; that in respect of Additional Customs Duty leviable under Section 3 of Customs Tariff Act equivalent to the Central Excise duty they claimed exemption in terms of Serial No. 122 of Notification No. 6/2002 C.E; that the Deputy Commissioner, following the decision of the Larger Bench of the Tribunal in the case of Priyesh Chemicals & Metals v. Commissioner of Central Excise, Bangalore 2000 (38) RLT 588 denied the benefit of exemption Notification as the condition of the notification was not fulfilled; that the Commissioner (Appeals) has also rejected the Appeal on the same ground. Learned Advocate, further, submitted that the condition specified in the Notification is that no credit under Rule 3 or Rule 11 of CENVAT Credit Rules, 2002 has been taken in respect of the inputs or capital goods used in the manufacture of the goods; that this condition was fully satisfied in the case of imported goods since no credit of duty is availed in respect of the inputs used in the manufacture of Nylon Filament Yarn of 210 deniers imported by them. He, further, contended that for the purpose of determining the countervailing duty under Section 3 of the Customs Tariff, one has to determine the excise duty for the time being leviable on the like articles produced or manufactured in India; that the like articles would be Nylon 210 deniers yarn manufactured in India, without availing the CENVAT Credit and since such Nylon yarn is chargeable to nil rate of duty, the imported Nylon 210 Deniers yarn is also chargeable to nil rate of duty. Reliance has also been placed on the decision in the case of Thermax Pvt. Ltd. v. Collector of Customs .
3. Countering the argument Shri Vikas Kumar, learned Senior Departmental Representative submitted that the matter stands decided by the Larger Bench of the Tribunal in the case of Priyesh Chemicals & Metals (supra); that the in the said decision, the benefit of Notification No. 19/88 CE was denied for levy of Additional Customs duty in respect of Zinc Ash imported by the Appellants on the ground that the consignment did not fulfill the requirements of the Notification which stipulated that no credit of duty paid on inputs used for the manufacture of goods have been taken under Rule 56A or 57A of Central Excise Rules, 1944. He also relied upon the decision of the Bombay High Court in the case of Ashok Traders v. Union of India wherein it has been held that "It is impossible to imagine a case where in respect of raw neptha used in HOPE in the foreign country, Central Excise duty leviable under the Indian Law can be levied and paid". He mentioned that Bombay High Court did not extend the benefit of Notification to the petitioner.
4. We have considered the submissions of both the sides. Additional Duty of Customs under Section 3 of Customs Tariff is leviable on the imported article equal to the excise duty for the time being leviable on the like articles, if produced or manufactured in India. The rate of duty leviable on excisable goods is set forth in the Schedule to the Central Excise Tariff Act. Central Government has been empowered under Section 5A of the Central Excise Act, to grant whole or partial exemption from payment of duty. Such exemption may be without conditions or with conditions specified in the Notification. It is settled law that the benefit of exemption notification will be available duty if the conditions stipulated in the Notification are fully satisfied. The benefit of Notification No. 6/02 CE (S. No. 122) is available if no credit under Rule 3 or 11 of CENVAT Credit Rules, 2002 has been taken in respect of the inputs or capital goods used in the manufacture of these goods. Unless Condition specified in the notification is satisfied by the appellants, the question of extending the benefit of Notification to the imported goods does not arise. This was the view held by the Bombay High Court in the case of Ashok Traders (supra). In the said matter, the benefit of Notification was available to HOPE subject to the condition that the product was manufactured from raw naptha on which appropriate rate of duty has also been paid. The Bombay High Cout has held that "It is obvious that the imported goods cannot specify second condition; because the question of payment of excise duty on raw naptha can never arise in respect of imported goods." The Bombay High Court did not accept the condition of the Appellants that advantage under the Exemption notification should be made available even though the conditions required for securing advantages are not complied with. The Bombay High Court held that "the suggestion that only those conditions would be satisfied which were possible of satisfaction is only required to be stated to be rejected. A tax payer who desired to take benefit of exemption, must bring his case within four corners of exemption notification." The Larger Bench of the Tribunal also in the case of Priyesh Chemicals was dealing with the condition of not availing of MODVAT credit of the duty on the inputs. The Larger Bench has held that "in order to satisfy this condition, it is necessary that a manufacturer seeking exemption should show that the imported goods were produced form duty paid inputs. Imported goods are incapable of fulfiling this condition and therefore, could not claim the exemption under the Notification." In view of this, we do not find any reason to interfere with the impugned Order. The Appeal is accordingly rejected.
(Pronounced in the Court).