[Order per : P. Karthikeyan, Member (T)]. - M/s. Prashray Overseas Pvt. Ltd., Varanasi, imported 24 consignments of silk fabrics of Chapter Pleading 5005 from China during 7/06 to 11/06 and sought exemption from CVD under Notification No. 30/2004-C.E., dated 9-7-2004 (as amended). This Notification grants exemption to specified commodities inter alia falling under headings 5004 to 5007 of the Tariff (including silk yarn and silk fabrics) on condition that they were manufactured without availing input duty credit. The original authority allowed the benefit of Notifications No. 30/04-C.E. (supra) to these imports. On appeal filed by the department, the Commissioner (A) denied the exemption to the impugned consignments on the ground that the above condition of not availing credit of duty paid on inputs was not satisfied in respect of the imported goods.
2. Heard both sides.
3. We find that no Central Excise duty is payable on raw silk produced in India. Yarn manufactured from such silk is also exempt under Notification No.30/2004 as no credit availed input is used to manufacture silk yarn. Therefore indigenous silk fabrics manufactured from indigenous silk yarn are exempt from Central Excise duty. Another stream in which silk fabrics get manufactured in India is using imported silk yarn. Neither party disputes that imported silk yarn was exempt from CVD during the material period in terms of Notification No. 20/06-Cus dated 1-3-2003. We find that the levy of CVD on imports is regulated by the following provisions of the Customs Tariff Act, 1975.
“3. Levy of additional duty equal to excise duty. - Any article which is imported into India shall, in addition, be liable to a (1) duty (hereafter to this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article.”
CVD is therefore payable on imported silk fabrics at the rate central excise duty is leviable for the time being on such silk fabrics produced or manufactured in India. Additional duty is imposed on imported goods to counter balance the central excise duty leviable on like articles made indigenously, this being a measure intended to safeguard the interests of the manufacturers in India. As no duty was payable on silk yarn either indigenous or imported, indigenous 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 I material period need not beat any CVD. The impugned imports are eligible for the exemption contained in Notification No. 30/04. This was also the ratio of our final order Nos. 941, 942/2008 dated 28-8-2008 [ (Tribunal)] in respect of the same appellants for 44 consignments imported earlier. The appeal is allowed.
(Operative part of the Order pronounced in Open Court on 29-9-2008)