Duty credit scrips can discharge education cesses where circular benefits extend to past cases and separate components do not bar relief.

Education Cess and Secondary and Higher Education Cess could be discharged through debit in MEIS/SEIS duty credit scrips under Circular No. 02/2020-Cus. The Tribunal noted that the circular extended the scrip-based payment facility to past cases and that prior High Court authority had rejected denial of the benefit merely because these cesses were separate components. On that basis, cash payment was not required where the cesses had already been paid through the scrips, and the demand was set aside in favour of the assessee.

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Issues: Whether Education Cess and Secondary and Higher Education Cess could be discharged through debit in MEIS/SEIS duty credit scrips in view of Circular No. 02/2020-Cus. dated 10.01.2020.

Analysis: The Tribunal noted that the Board's circular extended the facility of payment through duty credit scrips for past cases and that the High Court had already held that the benefit of the circular could not be denied merely because Education Cess and Secondary and Higher Education Cess were separate components. In that view, there was no justification to insist on cash payment for these cesses when they had already been discharged through the scrips.

Conclusion: The issue was decided in favour of the assessee and the demand relating to Education Cess and Secondary and Higher Education Cess was set aside.

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