Target Plus Scheme debit is based on the effective customs duty rate, not the higher tariff rate.

An exemption notification under the Target Plus Scheme allowing debit of the duty leviable "but for" exemption was interpreted to mean the duty actually recoverable on import under the operative exemption regime, not the unadjusted tariff rate. Because the goods were also covered by a notification prescribing an effective Basic Customs Duty rate of 5%, that effective rate governed the debit computation. Debiting duty at the effective rate was therefore not treated as conferring any double benefit, and the claim to compute debit on that basis was upheld.

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Issues: Whether, for debit under the Target Plus Scheme, the customs duty leviable on the imported goods was to be computed at the normal tariff rate or at the effective rate of duty available under the applicable exemption notification.

Analysis: Notification No. 32/2005-Cus. granted exemption from Basic Customs Duty and Additional Customs Duty but contemplated debit of the duties leviable on the goods but for such exemption. The goods were also covered by Notification No. 97/2004-Cus., which prescribed an effective Basic Customs Duty rate of 5%. The duty leviable for the purpose of debit was treated as the duty actually recoverable from the importer under the operative exemption regime, not the higher tariff rate. On that basis, debiting duty at the effective rate did not amount to granting any double benefit.

Conclusion: The duty to be debited under the Target Plus Scheme was the duty at the effective rate, and the assessee's claim was upheld.

Ratio Decidendi: Where an exemption notification permits debit of the duty leviable but for exemption, the relevant duty is the duty actually recoverable at the effective rate applicable to the import, not the unadjusted tariff rate.

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