[Order per : P.G. Chacko, Member (J)]. - The short question arising for consideration in this appeal of the Revenue is whether the benefit of Notification No. 30/2004-C.E., dated 9-7-2004 as amended would be admissible to the respondent in respect of countervailing duty on the fabrics imported by them during the material period. The respondent had imported grey cotton fabrics in a consignment covered by one Bill of Entry and cotton/lycra fabrics in six consignments covered by six Bills of Entry during the period from April to August, 2008. The goods were assessed to duties of customs including countervailing duty by the assessing authority who rejected the importers claim for exemption from payment of countervailing duty in terms of the above notification. The assessments were challenged before the Commissioner (Appeals) in respect of the countervailing duty. The learned Commissioner (Appeals) allowed the assessee’s appeals by way of remand. He directed the original authority to reconsider the assessee’s claim for the benefit of Notification No. 30/2004-C.E. in the light of a few earlier remand orders viz. Order-in-Appeal No. 127/2006 (JNCH) dated 22-8-2006, Order-in-Appeal Nos. 330-340/2007 (JNCH) dated 31-10-2007 etc. Aggrieved by the decision of the appellate authority, the Revenue is presently in appeal before us.
2. The learned SDR reiterates the grounds of this appeal. It is submitted that the earlier Orders-in-Appeal passed by the Commissioner of Customs (Appeals), Mumbai II were all remand orders and so was the order dated 7-2-2008 of the Hon’ble High Court referred to in the impugned order. The learned SDR submits that the learned Commissioner (Appeals) ought to have rendered a final decision on the substantive issue instead of remanding the case to the original authority. The learned SDR has also referred to certain decisions cited in the memorandum of appeal, which are to the effect that the benefit of Notification No. 30/2004-C.E. would not be available where the condition attached thereto was not complied with. Particular reference has been made to the Tribunal’s Larger Bench decision in Priyesh Chemicals and Metals Pvt. Ltd. v. Commissioner - 2000 (120) 259 (Tri-LB), wherein it was held that the benefit of a conditional exemption notification was not admissible to a person who did not satisfy the condition. It is submitted that one of the inputs used in cotton/lycra fabrics is lycra filament manufactured out of the basic polyurethane polymer, an excisable commodity in India. It is submitted that lycra filament itself is chargeable to countervailing duty if imported into India. Therefore, a person claiming the benefit of the above notification in respect of the fabrics containing lycra filaments will have to establish that the condition attached to the notification was complied with.
3. On the other hand, the learned counsel submits that the issue is squarely covered by the decision in Prashray Overseas Pvt. Ltd. v. Commissioner - (Tri. - Chennai), wherein the benefit of the above notification was held to be admissible to the party who imported silk yarn and fabrics from China. In the cited case, it was established that, during the period of dispute, an Indian manufacturer of yarn or fabric would not have been required to claim CENVAT credit on his input inasmuch as the input was not chargeable to duty of excise. On this basis, it was held that the demand of countervailing duty on the yarn and fabric imported by the party is not sustainable in law. The learned counsel has pointed out that the ratio of the above decision was followed in the case of Mapsa Tapes Pvt. Ltd. v. Commissioner - (Tri. -Del.). It is submitted that it is not in dispute that the yarn used in the imported fabrics were either wholly composed of cotton or predominantly composed of cotton. The Central Excise Tariff recognizes both kinds of yarns to be cotton yarn and hence to be not chargeable to duty. The notification also recognizes these yarns to be exempt from payment of duty. If that be the case, the fabrics imported by the appellant, which are undisputedly covered by the notification, are also not chargeable to countervailing duty.
4. We have found force in the submissions of the learned counsel. The ratio of the decisions cited by the learned counsel is that, where the inputs contained in the imported commodity are shown to be not chargeable to duty of excise in India, there is no question of an Indian manufacturer of such commodity availing CENVAT credit and, consequently, there is no question of levy of countervailing duty on the imported commodity. It is not the case of the appellant that the ratio of the said decisions was not accepted by the department. It is also pertinent to note that, in the present appeal, the appellant has not claimed that any input used in the imported fabrics was classifiable under a Tariff Heading not included in the Table annexed to Notification No. 30/2004-C.E. In this scenario, the ratio of the decisions cited by the learned counsel will be squarely applicable and consequently the benefit of exemption from payment of countervailing duty should be allowed to the respondent.
5. Another aspect of this case is that the learned Commissioner (Appeals) chose to remand the case to the original authority following an earlier precedent. Order-in-Appeal No. 127/06 passed by the Commissioner of Customs (Appeals), Mumbai-II (copy supplied by the learned counsel) was apparently kept in view by the lower appellate authority as a precedent for remand of the matter. This Order-in-Appeal indicates that the appellate authority held in favour of the assessee (importer) on the substantive issue and merely directed the lower authority to extent the benefit of the notification to the importer. The order impugned in the present appeal is of the same nature and hence, cannot be considered to be an open remand which is beyond the jurisdiction of the Commissioner (Appeals). Therefore, there is no reason to doubt the legality of the impugned order either.
6. In the result, the impugned order is sustained and this appeal is dismissed.
(Dictated in Court)