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of <h1>Tribunal Rules Education Cess Not Leviable on DEPB Licenses</h1> The Tribunal upheld the Commissioner (Appeals) orders, ruling in favor of the assessee and dismissing the Department's appeals. It held that education ... Education cess - Leviability of - Debit of BCD in DEPB scrips Issues:1. Levy of education cess on amounts debited in DEPB license for Basic Customs Duty (BCD) and Additional Customs Duty (CVD).Detailed Analysis:The appeals filed by the Department challenged orders by the Commissioner (Appeals) regarding the levy of education cess under Section 84 of the Finance (No. 2) Act, 2004, on amounts debited in DEPB licenses for BCD and CVD. The dispute arose when the Department sought to levy the cess on the aggregate of BCD and CVD debited in the DEPB scrips, while the assessee argued that the cess was not applicable as the duties were not leviable and recoverable. The Department insisted on the levy, leading to the goods being cleared after payment of the demanded cess, followed by dismissed refund claims and successful appeals before the Commissioner (Appeals), prompting the Department's present appeals.Upon hearing both sides, the Tribunal found the issue to be similar to a previous decision by the West Zonal Bench in Commissioner of Customs v. Reliance Industries Ltd. The Tribunal in that case ruled that education cess was not leviable on amounts debited in DEPB scrips due to full exemption from payment of BCD and CVD under a specific notification. Drawing parallels with Notification No. 96/04-Cus., the Tribunal concluded that as the goods were exempt from BCD and CVD payment during the relevant period, the duties were not considered leviable and recoverable for the purpose of education cess under Section 84 of the Finance (No. 2) Act, 2004. This decision was based on the examination of the DEPB scheme's scope and the precedent set by the Larger Bench decision in Essar Steel Ltd. v. Commissioner. Consequently, the Tribunal upheld the impugned orders and dismissed the Department's appeals.In summary, the Tribunal's decision aligned with the interpretation that education cess was not applicable on amounts debited in DEPB licenses for BCD and CVD when full exemption from payment of these duties was in effect, as established by previous rulings and the DEPB scheme's framework.
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