Tribunal Overturns Customs Decision, Rules Against Debiting Scrip for Education Cess Without Policy Support.

The appeal no. C/86304/2022 was allowed by the Tribunal after considering the decisions of the Bombay HC and the CBIC circular. The impugned order by the Commissioner of Customs (Appeals), Mumbai, was set aside. The Tribunal concluded that the debiting of the scrip for the discharge of education cess and secondary & higher education cess was not supported by specific provisions in the policy or relevant notifications. The appeal was disposed of, and no further issues remained in the matter.

---

---

Issues involved:
The issues involved in the judgment are seeking 'out-of-turn' disposal of appeal, duty payment aspect, debiting of scrip for discharge of cess, absence of specific provision in policy for payment, relevant notifications, judicial determinations, circular of Central Board of Indirect Taxes & Customs (CBIC), and decisions of the Hon'ble High Courts.

Out-of-turn Disposal of Appeal:
The application sought 'out-of-turn' disposal of appeal no. C/86304/2022 against the order of Commissioner of Customs (Appeals), Mumbai. The applicant's counsel argued that the issue is covered by the decision of the Hon'ble High Court of Bombay and followed by the Tribunal in other decisions. After hearing both sides, the application was allowed for disposal.

Duty Payment Aspect:
The dispute revolved around the demand raised for the discharge of 'education cess' and 'secondary & higher education cess' debited against the scrip issued under the Merchandise Exports from India Scheme (MEIS) in the Foreign Trade Policy (FTP). The objection was primarily against debiting the scrip for cess discharge without specific provision in the policy or relevant notification. The impugned order did not consider the decisions of the Hon'ble Bombay High Court in re LA Tim Metal & Industries Limited.

Judicial Determinations and Circular of CBIC:
Referring to the decision of the Hon'ble High Court of Bombay in re LA Tim Metal & Industries Limited, it was noted that any cess collectible as a percentage of duty liability exempted under any notification could not be computed in the absence of duty liability. The circular no. 3/2022 of CBIC related to 'social welfare surcharge,' and lack of specific reference to this surcharge affected the submission in the impugned order. The judgment highlighted the statutory declaration made by the Act of Parliament regarding the imposition of education cess and secondary & higher education cess on imported goods.

Decision and Disposal of Appeal:
Considering the decisions cited and the CBIC clarification, the impugned order was set aside, and the appeal was allowed. It was concluded that nothing further remained in the matter, and the appeal was disposed of accordingly.

---