Customs - Exemption from CVD - Supreme Court Dismisses Revenue's Review Petition in SRF case
THE decision of the Supreme Court in the SRF case created quite a stir in tax circles. In Circular No. , dated 21.07.2015, the CBEC observed,
It may be recalled that the Hon'ble Supreme Court, in the case of M/s SRF Ltd. versus Commissioner of Customs. Chennai and M/s ITC Ltd. v/s Commissioner of Customs (I&G), New Delhi - relating to CVD exemption, has held that the benefit of excise duty exemption [available to final products manufactured by the domestic manufacturer, subject to the condition of non-availment of CENVAT credit of duty on inputs or capital goods used by such manufacturer for manufacture of such final products] will also be available to the importers of such final products for the purposes of CVD on the ground that the importer was not availing the credit of duty on inputs or capital goods.
2. The implication of the Hon'ble Supreme Court judgment was that all such final products when imported by manufacturer importer would have attracted concessional excise duty as CVD while the domestic manufacturer of such final products had to forgo input tax credit to be eligible for such concessional rate. This would put the domestic manufacturers at a disadvantage vis-a-vis imports and would adversely impact the Make in India Policy of the Government.
3. The Judgment of the Hon'ble Supreme Court was examined in CBEC and it was found that there were certain errors apparent on record / interpretational issues and, with the concurrence of the Ld. Attorney General, a Review Petition / Revision Application has been filed against the same.
The Board's review Petition has been dismissed by the Supreme Court as the Court found no error, much less apparent error, in the order impugned. Please see 2016-TIOL-130-SC-CUS.
We have extensively covered this issue.
Please see:
1. Mystery of Confusing, Complicated and Controversial Notifications - DDT 2645 21 07 2015
2. Confusing, Complicated and Controversial Notifications - Storm in the Teacup blows over - DDT Effect - Board amends - DDT 2646 22 07 2015
3. Exemption from CVD when Excise Exemption is Conditional - Recent Confusing Notifications validity upheld by HC - DDT 2720 06 11 2015
4. Confusion, damage control and now, more confusion
5. Interpreting section 3 of CEA - Who wins and who loses