Target Plus Scheme debit must follow the effective duty rate, not the higher tariff rate.

Under the Target Plus Scheme, debit for exemption purposes is to be computed on the duty actually recoverable at the Government-prescribed effective rate, not on the higher unadjusted tariff rate. The note explains that "duty leviable but for exemption" refers to the duty fixed and recoverable in law, so using the effective rate does not create a double benefit. On that basis, the assessee's computation was accepted and the departmental appeals failed, with the Commissioner (Appeals)' order sustained.

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Issues: Whether, for debit under the Target Plus Scheme, customs duty is to be reckoned at the normal tariff rate or at the effective rate of duty.

Analysis: The debit contemplated by the exemption notification is the duty leviable on the goods but for the exemption, and levy includes collection of duty at the rate actually fixed and recoverable by the Government. Where the Government has prescribed an effective rate, the duty recoverable from the assessee is that effective rate and not the higher tariff rate. On that basis, debit under the Target Plus Scheme must follow the effective rate applicable under the EPCG notification, and the arrangement does not amount to any double benefit.

Conclusion: The duty to be debited is the effective rate of duty and not the tariff rate; the assessee's position is accepted.

Final Conclusion: The departmental appeals fail and the order of the Commissioner (Appeals) is sustained.

Ratio Decidendi: Where an exemption scheme requires debit of the duty leviable but for exemption, the relevant amount is the duty recoverable at the effective rate fixed by the Government, not the unadjusted tariff rate.

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