Circular benefit extended to education cess debits through MEIS scrips, and the confirmed demand was set aside.

Clause 11 of Circular No. 02/2020-Customs was applied to debits made through MEIS scrips for education cess and higher secondary education cess, on the view that the benefit was not confined to social welfare surcharge alone. The Tribunal relied on the existing understanding that duty credit scrips under the MEIS framework could be used for duty payment and that similar debit situations should receive the same circular benefit. On that basis, the disputed cess amounts were brought within the circular's scope and the confirmed demand was set aside in favour of the assessee.

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Issues: Whether the benefit of Clause 11 of Circular No. 02/2020-Customs dated 10.01.2020, issued in the context of past debits of social welfare surcharge in duty credit scrips, extends to education cess and higher secondary education cess debited through MEIS scrips.

Analysis: The Tribunal noted that the MEIS facility under Notification No. 24/2015-Customs dated 08.04.2015 permitted duty payment through duty credit scrips. It relied on the Madras High Court's view that the departmental circular could not be denied application merely because education cess and higher secondary education cess are different components, when the circular had already been applied to similar debit situations. On that basis, the Tribunal applied the same benefit to the disputed cess amounts and held that the demand could not survive.

Conclusion: The benefit of Circular No. 02/2020-Customs dated 10.01.2020 was held applicable to education cess and higher secondary education cess, and the demand confirmation was set aside in favour of the assessee.

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