ARTEX TEXTILE PVT LTD v. PATPARGANJ, CESTAT, Judgment, Law, casemine.com

Factual and Procedural Background

The present appeals arise from Order-in-Appeal Nos. CCACUS/D-II/PPG-BBG/2775/2018 and CCACUS/D-II/PPG-BBG/2770/2018, dated 26.11.2018 and 22.11.2018 respectively, which upheld the order of the adjudicating authority dated 23.11.2017. The appellant, M/s Artex Textile Pvt Ltd., imported consignments of non-textured polyester lining cloth from China through various Bills of Entry between July 2015 and February 2017. The appellant claimed exemption benefits under Notification No. 30/2004-CE as amended by Notification No. 34/2015-CE. However, the assessing officer denied this benefit on the ground that the conditions of the exemption notification, specifically regarding duty on inputs or capital goods under the Cenvat Credit Rules, could not be complied with by the importer. The appellant's appeals against this denial were dismissed by the Commissioner (Appeals), leading to the present appeals before the Tribunal.

Legal Issues Presented

Whether the appellant, as an importer of non-textured polyester lining cloth, is entitled to the benefit of exemption under Notification No. 30/2004-CE as amended by Notifications No. 34/2015-CE and 37/2015-CE.

Whether the conditions relating to payment of duty on inputs or capital goods under the Cenvat Credit Rules apply to importers, and if so, whether the appellant fulfilled those conditions.

Arguments of the Parties

Appellant's Arguments

The appellant argued that the exemption benefit under Notification No. 30/2004-CE, as amended, is available to importers as well, relying on a coordinate bench decision of the Kolkata Tribunal (Final Order Nos. MO/75078-75087/2019 and FO/A/75172-75176/2019 dated 17.01.2019) which held that the benefit applies to importers despite amendments.

The appellant submitted written arguments reiterating that the conditions in the Notification which cannot be complied with by importers should not be applied to them, referencing judicial pronouncements including the Supreme Court judgment in SRF Ltd.

Respondent's Arguments

The Revenue contended that the benefit of Notification No. 30/2004 is not available to the appellant due to amendments by Notifications No. 34/2014 and 37/2015, as the appellant is not a manufacturing unit and thus cannot fulfill the conditions laid down in the Notification.

The respondent relied on the position that the exemption conditions relating to duty payment on inputs are mandatory and not applicable to importers who do not manufacture goods domestically.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
SRF Ltd. Vs. Commissioner of Customs, Chennai, 2015 (318) ELT 607 (S.C.)	The Supreme Court held that conditions in exemption notifications which cannot be complied with by importers should not be applied to imported goods.	The court relied on this judgment to conclude that the appellant, as importer, satisfied the conditions of the amended Notification No. 30/2004-CE, and the exemption benefit should be extended to them.
AIDEK Tourism Pvt. Ltd. (Supreme Court judgment referenced)	Established the principle that exemption conditions not applicable to importers should be relaxed for imported goods.	The court affirmed the applicability of this principle in interpreting the amendments to the exemption notification.
M/s Chemsilk Commerce Pvt. Ltd. Shri Aditya Sarda Vs. CC (Port), Kolkata (2015) (12) TMI 1000-CESTAT	Extended the benefit of exemption under Notification No. 30/2004-CE to importers.	The court noted that this decision supports the appellant’s entitlement to exemption benefits.

Precedent

Rule or Principle Cited For

Application by the Court

SRF Ltd. Vs. Commissioner of Customs, Chennai, 2015 (318) ELT 607 (S.C.)

The Supreme Court held that conditions in exemption notifications which cannot be complied with by importers should not be applied to imported goods.

The court relied on this judgment to conclude that the appellant, as importer, satisfied the conditions of the amended Notification No. 30/2004-CE, and the exemption benefit should be extended to them.

AIDEK Tourism Pvt. Ltd. (Supreme Court judgment referenced)

Established the principle that exemption conditions not applicable to importers should be relaxed for imported goods.

The court affirmed the applicability of this principle in interpreting the amendments to the exemption notification.

M/s Chemsilk Commerce Pvt. Ltd. Shri Aditya Sarda Vs. CC (Port), Kolkata (2015) (12) TMI 1000-CESTAT

Extended the benefit of exemption under Notification No. 30/2004-CE to importers.

The court noted that this decision supports the appellant’s entitlement to exemption benefits.

Court's Reasoning and Analysis

The Tribunal examined the relevant exemption Notification No. 30/2004-CE along with its amending Notifications Nos. 34/2015-CE and 37/2015-CE. The court analyzed the condition relating to payment of duty on inputs or capital goods under the Cenvat Credit Rules and found that such conditions were originally intended for domestic manufacturers and not importers. The court relied heavily on the Supreme Court judgment in SRF Ltd., which clarified that exemption conditions which importers cannot comply with should not be applied to imported goods.

The Tribunal noted that the Commissioner (Appeals) had considered these precedents and amendments and had extended the benefit of the exemption notification to the respondent in a related matter. The Tribunal further observed prior Tribunal orders dismissing Revenue appeals on similar issues had attained finality and no appeal had been preferred against those orders.

The court also took into account the Revenue’s failed review petition in the Supreme Court against the SRF Ltd. judgment, reinforcing the binding nature of that precedent. Consequently, the Tribunal found no reason to interfere with the impugned orders denying the exemption benefit to the appellant and upheld the extension of the exemption benefit to importers under the amended Notification.

Holding and Implications

The Tribunal dismissed the appeals filed by the Revenue and allowed the appeals filed by the appellant, thereby setting aside the impugned orders which denied the benefit of exemption under Notification No. 30/2004-CE as amended.

The direct effect of this decision is that the appellant is entitled to the exemption benefits claimed on the imported consignments of non-textured polyester lining cloth. The ruling aligns with established Supreme Court precedent and prior Tribunal decisions, but does not establish any new legal precedent beyond affirming the applicability of existing judgments to the facts of this case.

ARTEX TEXTILE PVT LTD v. PATPARGANJ

CUSTOMS, EXCISE & SERVICE TAX APPELLATE

TRIBUNAL

New Delhi PRINCIPAL BENCH-COURT NO. II Customs Appeal No. 50492 of 2019-DB

(Arising out of Order-in-Original No. CCACUS/D-II/PPG-BBG/2775/2018 dated 26.11.2018 passed by Commissioner of Customs (Appeals) Delhi)

M/s Artex Textile Pvt Ltd. .........Appellant

Khasra No. 282, Gali No. 4 Shalimmar Village, Industrial Area New Delhi-11008

Versus Commissioner of Customs ICD Patparganj & Other ICDs New Delhi …….Respondent

The Commissioner of Customs, ICD Patpargaj, Delhi With

Customs Appeal No. 50493 of 2019-DB

(Arising out of Order-in-Original No. CCACUS/D-II/PPG-BBG/2770/2018 dated 22.11.2018 passed by Commissioner of Customs (Appeals) Delhi)

M/s Artex Textile Pvt Ltd. .........Appellant

Khasra No. 282, Gali No. 4 Shalimmar Village, Industrial Area New Delhi-11008

Versus Commissioner of Customs ICD Patparganj & Other ICDs New Delhi …….Respondent

The Commissioner of Customs, ICD Patpargaj, Delhi

Appearance

Present for the appellant: Shri Abhishek Jaju, Advocate Present for the respondent: Shri Sunil Kumar, DR

CORAM: Hon'ble Mr. Anil Choudhary, Member (Judicial) Hon'ble Mr. Bijay Kumar, Member (Technical) Date of hearing: 26.04.2019

Date of decision: 24.07.2019

Final Order Nos. 50953-50954 /2019 Bijay Kumar:

1. The present two appeals are filed against the Order-in- Appeal Nos. CCACUS/D-II/PPG-BBG/2775/2018 dated 26/11/2018 and CCACUS/D-II/PPG-BBG/2770/2018 dated 22/11/2018 by which the order of ld. Adjudicating authority dated 23/11/2017 have been upheld and the appellant's appeals were dismissed.

2. Brief facts of the case are that the appellant has imported consignment of non textured polyester lining from China vide Bill of Entry No. 6113751 dated 25/07/2015 in respect of Appeal No. 50492 of 2019 and following Bills of Entry in respect of Appeal No. 50493 of 2019;

7797460/ 13.12.2016, 7707465/ 05.12.2016, 8134024/ 10.01.2017, 8134005/ 10.01.2017, 8134004/ 10.01.2017, 8008851/ 29.12.2016, 8382233/ 31.01.2017, 8579038/ 16.02.2017, 8581857/ 16.02.2017, 8579037/ 16.02.2017 The appellant has claimed the benefit of Notification No. 30/2004-CE dated 19/07/2004 as amended by Notification No. 34/2015-CE dated 17/07/2015. The benefit claimed by the appellant was, however, denied by the assessing officer and consignments were assessed without the benefit of the said Notification. The benefit was denied by the assessing officer on the ground that the conditions mentioned in the said exemption Notification, which stated that nothing contained in the Notification shall apply to the

goods in respect of which duty on inputs or capital goods has been taken under the provisions of Cenvat Credit Rules, 2002. It was the understanding of the Department that the aforesaid conditions contained in the Notification No. 30/2004 was only meant for goods manufactured in India as the condition cannot be complied by the importer of the goods. The assessing officer passed the speaking order dated 23/10/2017 and in both the cases, denying the benefit of the Notification to the appellant which was confirmed by the impugned order.

3. Ld. Advocate, on behalf of the appellant, submitted that the issue is decided in favour of the appellant vide decision of the coordinate bench of Kolkata Tribunal vide Final Order No. MO/75078-75087/2019 and FO/A/75172-75176/2019 dated 17/01/2019, wherein it is held that even after the amendment the benefit of Notification No. 30/2004-CE the benefit is available to the importer of the goods. Ld. Advocate also submitted written submissions dated 29/04/2019, wherein the similar arguments were pressed.

4. Ld. AR on behalf of the Revenue, however, submits that the benefit of the Notification No. 30/2004 is not available to the appellant, in view of the subsequent amendment carried by Notification Nos. 34/2014 and 37/2015. The appellant is not a manufacturing unit, and therefore, the conditions of the Notification cannot be complied by them and,

accordingly, the impugned order has decided the issue which is sustainable. Ld. AR on behalf of the appellant also submitted a written submission dated 10/05/2019 which was taken on record and duely considered by us.

5. We have considered the submissions made by ld. Counsel and ld. AR and also perused the appeal records along with submissions made by both the sides.

6. The issue to be decided in this appeal is regarding availability of the Notification No. 30/2004 as amended to the appellant in respect of the consignment of the non textured polyester lining cloth imported by them vide the aforesaid Bills of Entry. It is the contention of the Department that the appellant did not fulfil the condition laid down in the Notification No. 30/2004 as amended, and therefore, the impugned orders have correctly denied the benefit of the exemption Notification. However, ld. Counsel has relied upon the decisions of coordinate bench of this Tribunal on the similar sets of the facts and circumstances, which also pertain to the availability of benefit of aforesaid Notification while importing the goods. This order of the coordinate bench was passed in which one of us (Bijay Kumar) party to the decision.

7. The said Notification No. 30/2004, was examined along with the amending Notifications i.e. Notification Nos. 34/2015

and 37/2015 and the decision was arrived thereafter. The relevant portion of the order is extracted as under;

"8. Heard both sides and perused the appeal records.

9. We find that the amendment made by notification No. 34 of 2015 provides a condition qua payment of duty on inputs and non- availment of credit in manufacturing. Therefore, the sweep of the judgment of SRF Ltd. is not affected. The Notification No. 37 of 2015 further relaxes the condition that the nil payment of duty on input would also qualify as payment of duty.

10. We find that the Commissioner (Appeals) has considered the judgement of SRF Ltd. and the notification No. 34 of 2015 and 37 of 2015 as well as sweep of the judgement of SRF Ltd. vis- a-vis amendments and dealt with the applicability of the amendments in the impugned orders.

11. We find that Tribunal dismissed several appeals of the Revenue on 27.11.2017 and 21.03.2018 against the respondent by following the previous orders of the Tribunal. No appeal has been preferred against the above two orders and limitation period has expired. The orders have attained finality.

12. We also find that the Commissioner (Appeals) has followed the order passed by this Tribunal in the case of the respondent in which the benefit of notification No. 30 of 2004, as amended by notification 34 of 2007 and 37 of 2015 were extended to the respondent. The Commissioner (Appeals) held in paragraph 8 and 9 as follows.

"8. Following the judgment of AIDEK Tourism Pvt. Ltd. Hon'ble Supreme Court delivered another judgment on the same grounds in case of SRF Ltd. Reported in 2015 (318) ELT 607 (S.C.). In the case of SRF Ltd. Hon'ble Apex Court further observed that the conditions which are not applicable to the importer and which the importer cannot fulfil would not be applied in case of the imported goods.

9. Therefore, I observe that both the amended Notifications being No. 34/2015 C.E. and 37/2015 C.E. in no manner restrict or impede the judgment

of Hon'ble Supreme Court in SRF Ltd. It was held by Hon'ble Court that the condition which cannot be complied with would not be made applicable to the imported goods. The importer has satisfied all the conditions of the amended notifications in terms of the view taken by several judicial pronouncements by Hon'ble Apex Court. Hon'ble CESTAT in its recent final orders bearing No. FO/A/75702-75704/2016 dated 02.08.2016 involving identical issue in appellant's own case also affirmed that the benefit of CVD exemption is to be extended to importer also in this case CESTAT has held as under:

"1. These Stay applications and Appeal have been filed by the Revenue against OIA dated 29.10.2015 and 14.01.2016.

2. Sri S. K. Naskar, A.C. (AR) argued that First Appellate Authority has allowed the appeals by relying upon order of Hon'ble Apex Court in SRF Ltd. Vs. Commissioner of Customs, Chennai (2015 (318) ELT. 607 (S.C.)]. That department has filed a review application in Hon'ble Supreme Court against the said order, which is pending.

3. Sri S. K. Mehta (Advocate) appearing on behalf of the respondents argued that Hon'ble Apex Court by an order dated 15.07.2016 has dismissed the Review Petition No. 3441/ 2015 in Civil Appeal No. 1623/2009 filed by Revenue. In the case of M/s SRF Ltd. (Supra) Advocate also relied upon the case law of M/s Chemsilk Commerce Pvt. Ltd. Shri Aditya Sarda Vs. CC (Port), Kolkata (2015) (12) TMI 1000-CESTAT, Kolkata ] under which similar benefit has been extended to the appellant.

4. After hearing both sides and perusing the case records, it is observed that only ground under which Revenue filed this appeal is that department has filed a review petition in the Apex Court in the case of M/s ARF Ltd. (Supra) which is pending in the Apex Court. In view of dismissal of the review petition of the department by Apex Court by order dated 15.07.2016, appeals filed by the department are not sustainable. The issue has also been decided by this bench in the case of M/s Chemsilk Commerce Pvt. Ltd., Shri Aditya Sarda- Vs. CC (Port), Kolkata (Supra). Accordingly, appeals filed by the Revenue are dismissed and stay applications also stand disposed of."

13. In view of the above discussions, we do not find any reasons to interfere with the impugned orders and accordingly, the same is sustained. The appeals filed by the appellant Revenue are dismissed. MA's (COD) allowed are disposed of."

8. In view of above, we find that the impugned orders are not sustainable and, accordingly, liable to be set aside.

9. In the result, appeals are allowed with consequential benefit, if any.

(Order pronounced in open court on 24.07.2019)

(BIJAY KUMAR) (ANIL COUDHARY)

MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Tejo

C/50492/2019

ARTEX TEXTILE PVT LTD v. PATPARGANJ

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

ARTEX TEXTILE PVT LTD v. PATPARGANJ

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