Supreme Court rules that benefit granted to excisable goods covered under exemption notification with a condition not to avail CENVAT credit, can also be extended to imports for payment of CVD

 

This Tax Alert on the decision of the Supreme Court wherein the issue before the Court was whether the assessee was entitled to exemption from payment of additional duty of customs (CVD) in terms of Notification no. 6/2002-CE dated 1 March 2002, which provides exemption from payment of Excise duty on certain excisable goods, subject to the fulfilment of the specified conditions.The condition which was applicable to the goods imported by the assessee was that, no CENVAT credit should be availed on inputs or capital goods used in the manufacture of these goods.

 

Relying on the decisions given by the Supreme Court in the cases of Thermax Pvt. Ltd vs. Collector of Customs (Bombay), New Customs House; Hyderabad Industries Ltd. vs. UoI and Aidek Tourism Services Pvt. Ltd.vs. Commissioner of Customs, New Delhi, it was held that the assessee was entitled to exemption from payment of CVD in terms of Notification no. 6/2002.

 
The ambiguity has been set at rest by the Supreme Court, thus paving way for benefit of lower CVD, which can be extended to the import of various products which are eligible for concessional rate of Excise duty through an exemption notification. This would certainly benefit the importers of such goods