Education cess not leviable on Target Plus imports where duty is debited in the scrip under the exemption scheme.

Education cess was held not leviable on imports cleared under Notification No. 32/2005-Cus. where customs duty was debited in the Target Plus scrip. The notification's exemption operated on the customs duty in the manner prescribed, and such debit was treated as payment for the scheme's purposes. The reasoning applied in Tribunal decisions under the DEPB scheme was found equally applicable, and the Revenue's attempted distinction based on drawback or Cenvat credit was rejected as irrelevant to the exemption mechanism.

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Issues: Whether education cess was leviable on imports cleared under Notification No. 32/2005-Cus. when the duty amount was debited in the Target Plus scrip.

Analysis: The notification granted exemption from customs duty under the Target Plus scheme subject to the prescribed debit in the tax credit certificate. The Court found that, for this scheme as well as for the DEPB scheme, the duty is treated as paid upon such debit and the exemption operates on the customs duties in the manner contemplated by the notification. The reasoning adopted by the Commissioner (Appeals) from the Tribunal decisions on the DEPB scheme was held to be applicable, and the distinction sought to be drawn by Revenue regarding drawback or Cenvat credit was found irrelevant.

Conclusion: Education cess was not leviable on the exempted imports, and the Revenue's challenge failed.

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