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of <h1>Tribunal rules no education cess on DEPB scrips due to customs duty exemption</h1> The Tribunal upheld the Commissioner's decision, ruling that education cess was not applicable on amounts debited in DEPB scrips due to full exemption ... Customs – When basic and additional customs duties have been debited in DEPB scrips, no education cess could be levied (As per Notification No. 96/2004-Cus dt. 17.9.2004) Issues:1. Whether amounts equivalent to Basic Customs Duty (BCD) debited in DEPE license should be taken into account for the levy of education cess under Section 84 of the Finance (No. 2) Act, 2004.Analysis:The appeals filed by the Department challenged the orders passed by the Commissioner (Appeals) regarding the levy of education cess on imported goods. The Department sought to levy the cess at a rate of 2% on the aggregate of Basic Customs Duty (BCD) and Additional Customs Duty (CVD) debited in the DEPB scrips. However, the assessee contended that the debits of BCD and CVD in the DEPB license were not considered a 'levy of the duties,' thus the cess was not applicable. The Tribunal referred to a previous decision where it was held that education cess was not leviable on amounts debited in DEPB scrips due to full exemption from payment of BCD and CVD. The Tribunal found that Notification No. 96/04-Cus. was similar to the previous notification granting full exemption from these duties. As the imported goods were exempt from these duties, it was concluded that the duties were not 'leviable and recoverable' for the purpose of education cess under Section 84 of the Finance (No. 2) Act, 2004. Therefore, the impugned orders were sustained, and the appeals were dismissed.This judgment clarifies the interpretation of the levy of education cess on imported goods where BCD and CVD were debited in DEPB scrips. It establishes that if goods are exempt from these duties, the education cess may not be applicable on the amounts debited in the DEPB license. The decision provides consistency in applying the law across similar notifications and schemes, ensuring that duties exempted from payment are not considered for the purpose of education cess levy.
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