TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 169
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....ts of certain goods and claiming benefit of Exemption Notification No. 32/2005-Cus. from payment of customs duty. The Assessing Officer though accepted the claim for exemption from payment of customs duty and additional duty, demanded Education Cess on CVD and customs duty also. He debited such amount from the accounts of the assessee. 3. Being aggrieved by such order of the Assessing Officer, the assessee appealed to the Commissioner (Appeals). Commissioner (Appeals) allowed the appeal and set aside the action of the Assessing Officer levying Education Cess on the imports made by the respondent by his order dated 24-4-2006. 4. The Revenue thereupon approached the Customs, Excise and Service Tax Appellate Tribunal ('the Tribunal....
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....on such basic duty of customs and additional duty on the ground that such duty-free imports were being made under DEPB scheme. The case of the Revenue before the Tribunal was that in view of the Circular of C.B.E. & C., dated 31-1-2005, such imports when made under DEPB scheme, though may enjoy exemption from payment of Customs and additional duty if the conditions of Exemption Notification No. 32/2005 are satisfied, nevertheless, the importers would have to pay the Education Cess on the customs duty and additional duty otherwise payable. 7. Identical issue came up for consideration before this Court in Special Civil Application No. 11635/2005 in case of Gujarat Ambuja Exports Ltd. wherein by judgment dated 21-6-2012 [2013 (289) E.L.T....
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....es that such neutralisation shall be provided by way of grant of duty credit against the export product. 18. From the nature of DEPB scheme noted above and the exemption from payment of customs duty on imports made under such scheme, it can be gathered that the very purpose of granting such exemption is to neutralise the customs duty, on the import component of the export product. In essence, the Government of India grants duty remission at prescribed rates on the imports made under such a scheme. 19. It can thus not be denied that for the imports made under the DEPB scheme, there is total or partial, as the case may be, exemption in payment of customs duty. At the relevant time, for the goods other than edible oil, such exempti....
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....arger Bench of the Tribunal in the case of Essar Steel Ltd. (supra) held that mere entry in the DEPB book is not sufficient for eligibility of Modvat credit availed on the strength of Bill of Entry where the importer had availed of benefit of the exemption from payment of customs duty. This would further go to show that while no customs duty is paid, there would be no question of availing Modvat credit on such duty. 21. We may notice that vide circular dated 8-7-2004, the Ministry of Finance, in a question whether goods that are fully exempt from excise/customs duty or are cleared without payment of such duty would be subject to Education Cess, clarified that the Education Cess is leviable at the rate of 2% of the aggregate of the dut....
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....is issued under the exercise of powers under Section 25 of the Customs Act, 1962. Such notification grants total exemption from payment of customs duty and additional duty on all goods other than edible oils which are imported under DEPB scheme. It is, of course, subject to conditions specified in the notification itself. Such conditions require adjustment of the credit in the DEPB scrip against the customs duty liability. However, such adjustment is only procedural in nature. As noted earlier, para 7.14 of the Export-Import Policy clearly provided that the exporter who does not desire to go through the licensing route would have an optional facility of being governed under the DEPB scheme. 25. We may note that in cases of Advance Lic....