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Issues: (i) Whether Social Welfare Surcharge is an independent levy or merely takes the colour of the customs duty on which it is calculated; (ii) Whether Social Welfare Surcharge can be debited from MEIS and SEIS duty credit scrips under the exemption notifications governing import against such scrips.
Issue (i): Whether Social Welfare Surcharge is an independent levy or merely takes the colour of the customs duty on which it is calculated.
Analysis: The surcharge was introduced under the Finance Act, 2018 as a levy distinct from the customs duty under the Customs Act and the Customs Tariff Act. The notification framework governing the scrip-based imports did not alter that source of levy. In the light of the later Supreme Court ruling relied upon in the judgment, a levy imposed under a different enactment for a different purpose does not automatically fall with the exemption or treatment accorded to customs duty.
Conclusion: Social Welfare Surcharge is an independent levy and does not merely take the colour of basic customs duty.
Issue (ii): Whether Social Welfare Surcharge can be debited from MEIS and SEIS duty credit scrips under the exemption notifications governing import against such scrips.
Analysis: The notifications issued under section 25(1) of the Customs Act, 1962 exempted imports against MEIS and SEIS scrips from the customs duties specifically named in them and permitted debit only of those duties leviable on the goods but for the exemption. Clause 3.02 of the Foreign Trade Policy also confined use of the scrips to specified customs and excise duties. Since Social Welfare Surcharge was not one of the levies covered by the exemption notifications, the revenue could not extend the debit mechanism to that surcharge. However, the surcharge remained payable by the importer by some other permissible mode.
Conclusion: Social Welfare Surcharge could not be debited from the MEIS and SEIS scrips, though the importer remained liable to pay it independently.
Final Conclusion: The writ petitions succeeded in part. The surcharge was held payable, but the respondents were directed to restore the amount debited from the scrips once the surcharge was paid in cash or by another permissible mode.
Ratio Decidendi: A levy imposed under a different statute is not covered by an exemption notification unless it is specifically included, and debit of a duty credit scrip can be made only for the levies expressly authorised by the governing notification.
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