Duty credit scrip payments for past imports treated as valid discharge, barring fresh cash recovery.

Education Cess and Secondary & Higher Education Cess paid through MEIS duty credit scrips for past import periods were treated as a valid discharge of customs duty liability. Clause 11 of Circular No. 02/2020-Customs was applied to accept earlier debits in duty credit scrips as revenue duly collected, and prior judicial precedent supported non-disturbance of such past payments. On that basis, demanding the same duty again in cash would amount to double recovery, so the fresh cash demand was not sustainable.

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Issues: Whether Education Cess and Secondary & Higher Education Cess, paid by debit in MEIS duty credit scrips for past imports, constituted valid discharge of customs duty liability and could not be demanded again in cash.

Analysis: The dispute was confined to the effect of Clause 11 of Circular No. 02/2020-Customs dated 10.01.2020. The Circular directed that past cases of debit of Social Welfare Surcharge in duty credit scrips should not be disturbed and that such payments be accepted as revenue duly collected. The same principle was applied to the present imports, which pertained to an earlier period and where the importers had already discharged the liability through MEIS scrips. The decision was supported by prior judicial holdings that such past payments through duty credit scrips were not to be reopened, and no material was shown to dislodge those precedents. Requiring fresh cash payment would amount to double recovery.

Conclusion: The payment of Education Cess and Secondary & Higher Education Cess through MEIS duty credit scrips for the relevant past period was a valid discharge of duty liability, and the Revenue's demand was not sustainable.

Ratio Decidendi: Where the Board's circular treats past payments made through duty credit scrips as valid revenue realisation, amounts already discharged through such scrips for earlier import periods cannot be demanded again in cash.

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