TaxTMI 
TaxTMI 
2018 (5) TMI 1248
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....s denied the exemption of Special Additional Duty of Customs, on the ground that during the relevant period the exemption was available in respect of additional duty leviable under sub-Section (1) of Section 3 of the said Customs Tariff Act, 1975 and Special Additional Duty of Customs leviable thereon under Section 3A of said Customs Tariff Act, 1975, whereas Special Additional Duty of Customs was leviable under Section 3(5) of the Customs Tariff Act, 1975 which was not exempted under the Notification No. 53/2003-Cus. dated 01.04.2003. He submits that before the amendment in Section 3 the Special Additional Duty of Customs was leviable under Section 3 of the Customs Tariff Act which was substituted by Section 3(5) of Customs Tariff Act. Therefore the exemption provided to Special Additional Duty of Customs under Section 3A of the Customs Tariff Act is nothing but is leviable under Section 3(5) of Customs Tariff Act, 1975. He submits that sub- Section 3A was substituted vide sub-Section 3(5) but it appears an apparent error on the part of the legislators. He further alternatively submits that the Special Additional Duty of Customs leviable under Section 3(5) of the Customs Tariff Ac....
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.... notification in respect of special additional duty leviable under Section 3(5) of Customs Tariff Act, 1975 under Notification No. 20/2006-Cus. As per said notification all goods are exempted from payment of special additional duty, if the goods are exempted from payment of whole of Customs duty and whole of additional duty leviable under Section 3(1) of Customs Tariff Act, 1975. In the present case the goods imported are admittedly exempted from whole of the Customs duty and additional duty under Section 3(1) of the said Act, therefore special additional duty is exempted under Notification No. 20/2006-Cus. The contention of the Learned AR that the goods imported by the appellant is not exempted in terms of Notification No. 53/2003-Cus because the said notification provides the debit of duty in the scrip therefore the goods are not exempted. We do not agree with this contention for the reason that Notification No. 53/2003-Cus is very much exempt the goods which can be seen in the preamble of the notification which is reproduced below:- "Exemption to goods imported against Duty Free Entitlement Credit Certificate - In exercise of the powers conferred by sub-section (1) of s....
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....scheme, whole of basic customs duty and additional duty of customs exempt. If answer to this question is in the affirmative, the petitioners' claim for exemption from payment of SAD also will have to be accepted. If the answer to such a question is in the negative, the petitioners cannot avoid payment of SAD on imports of such goods. 10. Before proceeding further, we may recall that under exemption Notification No. 46/2002, edible oils have been granted exemption from payment of basic and additional duty of customs only to the extent of 50% of the rates applied. Thus, such exemption is not for the whole of the duty of customs and additional duty. In that view of the matter, on the imports of edible oils, the condition of exemption Notification No. 20/2006 would not be satisfied. We may recall that to avail exemption from payment of SAD under said notification, what is required is exemption from the whole of the duty of customs and the additional duty of customs, unless of course "free" or "Nil" rates of duties are specified for such duties on such products. When the exemption is not total but only partial, such condition would not be satisfied. In that view of the matter, ....
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....992. The policy outlines the objectives including to accelerate the country's transition to globally oriented vibrant economy with a view to derive maximum benefits from expanding global market opportunities and to stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods required for augmenting production. 12. Chapter 7 of the Export and Import Policy pertains to duty exemption schemes. Various duty remission schemes framed by the Government enables post export replenishment/remission of duty on the inputs used in the export production. Duty Entitlement Passbook Scheme is one such duty remission schemes. The object of DEPB scheme is to neutralize the incidence of customs duty on the import component of the export product. Such neutralization is provided by way of grant of duty credit against export product. In such a scheme, an exporter may apply for credit, as a specified percentage of FOB value of exports made in freely convertible currency. The credit shall be available against such export products and at such rates as may be specified by the Director General of Foreign Trade. The duty c....
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.... to 50% of the standard rate of duty applied as also 50% of the additional duty. Such conditions relevant for our purpose read as under :- (i) that the importer has been issued a Duty Entitlement Pass Book by the Licensing Authority in terms of paragraph 4.3 of the Export and Import Policy; (ii) the importer has been permitted credit entries in the said Duty Entitlement Pass Book by the Licensing Authority at the rates notified by the Government of India in the Ministry of Commerce for the products exported; (iii) the said Duty Entitlement Pass Book is produced before the proper officer of Customs for debit of the duties leviable on the goods but for exemption contained herein. 16. From the nature of DEPB scheme and the exemption granted to imports made under such scheme, it can be seen that the very purpose is to neutralize the import duty component on the imported goods used for production of export items. Such object is achieved through the DEPB scheme under which the exporter is given the facility of utilizing the credits in the DEPB scrips for the purpose of adjustment against the customs duty liability on the goods imported for the ultimate....
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....tents of an export product and the basic customs duty payable on such deemed imports. Thus through such adjustments on the DEPB scrips at the time of further imports, customs duty component is sought to be neutralised. The view expressed by the Tribunal in the case of Reliance Industries Ltd. (supra) appeals to us. In the said decision, the Tribunal taking note of the provisions contained in Section 81 and 84 of the Finance Act, 2004 held that the impugned circular No. 5/2005 is not legally sustainable. The Tribunal held that crediting and debiting of entries in the passbook is a matter of procedure and convenience and in essence, the Notification No. 45/2002 provides for full exemption from payment of customs duty. 20. We may also recall that the Larger 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.....
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....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 License Schemes under which imports are being made and which are exempt from customs duty under various notifications issued by the Central Government under Section 25 of the Customs Act, 1962, no education cess is demanded by the respondents. In fact, the impugned notification itself is sufficiently clear and records that imports against Advanced Licenses are exempt from all duties of customs and therefore, it follows that education cess at 2% is not leviable on such imports. In case of DEPB, however, a distinction is sought to be drawn on the premise that though the importers are governed by exemption notification, the fact remains that in case of such imports, the duty is debited from DEPB scrip. To our mind, such distinction is not valid. The clarificatory circular itself refers to the imports made under the DEPB scheme being covered under exemption notification. Such exemption is, of course, subject to fulfilment of certain conditions. One of the conditions includes that of adjustment of credit in the D....
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....e petitioners have been clearing their goods during the pendency of this petition by paying SAD. Our declaration, therefore, shall apply in future imports. We reiterate that on any goods whenever the customs duty or additional duty is not fully exempt when imported under DEPB scheme, the entire amount of SAD would have to be paid by the importer." From the above judgment it can be seen that though in the case of DEPB scheme exemption is provided by debiting the duty in DEPB scrip, it is considered as exempted. The similar procedure is available in the Notification No. 53/2003-Cus, therefore the ratio is squarely covered in the present case for the purpose under Notification No. 20/2006-Cus. Accordingly the condition of the Notification No. 20/2006-Cus is fully complied with, therefore the special additional duty cannot be demanded from the appellant. The identical issue has been considered by this Tribunal in the case of Punj Lloyd Ltd. (supra) wherein the Tribunal passed the following order:- "5. We have considered the contentions of both sides. We find that by virtue of Notification No. 20/2006-Cus., the Govt. of India granted exemption from payment of SAD. The releva....