TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 119
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....y for ex-bond clearance for the aforesaid 10 warehouse bills of entry. At the time of filing the ex-bond bills of entry, the petitioner claimed the benefit of Notification No.24/2015-Cus dated 08.04.2015, which enables an importer to use the scrip issued under Merchandize Export from India Scheme (MEIS), which is a scheme notified under the Foreign Trade Policy 2015-20. As per the said notification, an importer who is liable to pay the customs duty, instead of paying the duty by cash, debit the customs duty from the scrips that is issued to him under the said scheme. Accordingly, by using the scrips under the MEIS, the petitioner had debited a total amount of customs duty of Rs. 22,88,86,212/-. Out of the said duty paid, an amount of Rs. 66,66,582/- was debited in respect of education cess and secondary and higher secondary education cess that were payable as a percentage of basic customs duty leviable on the goods. 3. It is the further case of the petitioner that, after the assessment was over and the clearance of the goods were given, however, the respondent has issued a show cause notice dated 19.11.2019, on the ground that, the education cess that was wrongly debited from MEIS....
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.... wherein it has been inter-alia been held that "A notification has to be issued for providing exemption under the said source of power. In the absence of a notification containing an exemption to such additional duties in the nature of Education Cess and Secondary Higher Education Cess, they cannot be said to have been exempted. The proportion urged that simply because one kind of duty is exempted, other kinds of duties automatically fall, cannot be accepted as there is no difficulty in making the computation of additional duties, which are payable under NCCD, Education Cess, secondary and Higher Education Cess. Moreover, statutory notification must cover specifically the duty exempted. When a particular kind of duty is exempted, other types of duty or cess imposed by different legislation for a different purpose cannot be said to have been exempted." 14.07. CBIC vide para 4 of Circular No. 02/2020-Customs dated 10.01.2020 has stated that the duty credit scrips issued under schemes such as MEIS, SEIS, etc. are granted as rewards / incentives for exporters under the respective FTP, as per para 3.02 of the Foreign Trade Policy 2015-2020, these scrips can be used for payment of Basi....
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....ssee was exempted to pay excise duty and this was, when confronted, the Hon'ble Supreme Court in the said Unicorn Industries case has held that, since the SWS components are a separate entity which cannot be included, unless and until if specific exemption is granted in this regard. 7. The education cess was brought in to the statute book for levying the same through the Finance Act, 2004, both in Central excise duty as well as the customs duty by two separate provisions under Sections 91 and 94 of the Finance Act and since such levy of education cess had come, which had been considered to be part and parcel of duty of excise and customs duty, that position since was not prevailing till the regime of Notification No.71/2003, such exemption sought for in the Unicorn Industries case was negated by the Hon'ble Supreme Court. In support of his case, he relied on the following: "19. The education cess came to be imposed vide notification dated 10.9.2004 issued under the Finance Act, 2004. Sections 91 and 93 are extracted hereunder: "91. Education Cess- (1) Without prejudice to the provisions of sub section (11) of Section 2, there shall be levied and collected, in accordanc....
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....f 2004 and 2007 were not in vogue. The notification was questioned on the ground that it should have included other duties also. The notification could not have contemplated the inclusion of education cess and secondary and higher education cess imposed by the Finance Acts of 2004 and 2007 in the nature of the duty of excise. The duty on NCCD, education cess and secondary and higher education cess are in the nature of additional excise duty and it would not mean that exemption notification dated 9.9.2003 covers them particularly when there is no reference to the notification issued under the Finance Act, 2001. There was no question of granting exemption related to cess was not in vogue at the relevant time imposed later on vide Section 91 of the Act of 2004 and Section 126 of the Act of 2007. The provisions of Act of 1944 and the Rules made thereunder shall be applicable to refund, and the exemption is only a reference to the source of power to exempt the NCCD, education cess, secondary and higher education cess. A notification has to be issued for providing exemption under the said source of power. In the absence of a notification containing an exemption to such additional duties ....
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....toms Tariff Act, 1975 are exempted, when goods are imported into India against a duty credit scrip issued by the original authority under the Merchandize Export from India Scheme ie.,MEIS in accordance with paragraph 3.04 r/w. paragraph 3.05 of the Foreign Trade Policy. The relevant portion of the Notification No.24/2015 reads thus: "Customs Duty (CVD) In exercise of the powers conferred by subsection (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods when imported into India against a duty credit scrip issued by the Regional Authority under the Merchandise Exports from India Scheme in accordance with paragraph 3.04 read with paragraph 3.05 of the Foreign Trade Policy (hereinafter referred to as the said scrip) from,- (a) the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as said Customs Tariff Act); and (b) the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act." 10. Only in that context, eventhough the petitioner had p....
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....r the petitioner would submit that, in view of the aforesaid provisions stated in 2004 as well as 2007 Finance Act, where the education cess and higher secondary cess has been introduced respectively, and those higher and secondary education cess since has been declared as part of the duty, the present reason stated in the impugned order is not justifiable, as it goes against the spirit of the aforesaid provisions of the Finance Act. According to the learned Counsel for the petitioner, the import of the judgment in Unicorn Industries case has been misinterpreted and wrongly fit in in the present case. Therefore, the learned Counsel for the petitioner seeks indulgence of this Court against the impugned order. 14. Per contra, Mr.B.Vijay Karthikeyan, learned Standing Counsel appearing for the respondent has relied upon two judgments ie., 2006 (194) E.L.T. 11 (S.C.) in the case of Tata Teleservices Ltd., Vs. Commissioner of Customs and 2019 (370) E.L.T. 3 (S.C.) in the case of Unicorn Industries Vs. Union of India. By relying upon these judgments, learned Standing Counsel has made submissions that, if at all any notification has been issued, that could have been issued only by the Cen....
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....the impugned order, especially in the context of the law having been declared by the Hon'ble Supreme Court in the Unicorn Industries case, are justifiable and accordingly, the impugned order does not require any interference. 17. I have considered the said rival submissions made by the learned Counsel for the parties and have perused the materials placed before this Court. 18. Insofar as the factual matrix as has been projected by the petitioner is concerned, there could be no much controversy, as the petitioner had imported RBD Palmolein under 10 warehouse bills of entry and 52 bills of entry, for which, whatever the duty imposed against him had been paid, of course, by using the scrips issued under MEIS. This is an acceptable method for debiting the duty by using the credit scrips under MEIS. While paying such duty, using the scrips, the petitioner had paid the entire duty, which includes the education, secondary education or higher education cess to the total amount of Rs. 22,88,86,212/-, that was accepted and the clearance of the goods had also been given by the Customs. Subsequently, the Customs department has come forward to issue a show cause notice on the ground that,....
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....n, such kind of benefit cannot be expected and therefore, it was negated. 22. Here in the case in hand, it is no doubt that, the exemption Notification No.24/2015 is dated 08.04.2015 ie., well after the Finance Act, 2004 and 2007. In the 2004 Finance Act, Section 91 deals with education cess and Section 93 made it clear that, the education cess levied under Section 91 in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1994, being goods manufactured or produced, shall be a duty of excise. Therefore, insofar as the Central Excise is concerned, the education cess imposed under Section 91 of the Finance Act, 2004 was to be treated as a duty of excise, in view of Section 93. Similarly, a provision is available under Section 94 of the very same Finance Act, 2004, which reads thus: "94.Education Cess on imported goods.- (1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Customs Tariff Act, 1975, being goods imported into India, shall be a duty of customs (in this section referred to as the Education Cess on imported goods), at the rate of two per cent., calculated on the aggregated of duties of....
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.... a duty of customs (in this section referred to as the Secondary and Higher Education Cess on imported goods), at the rate of one per cent., calculated on the aggregate of duties of customs which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under section 12 of the Customs Act, 1962 and any sum chargeable on such goods under any other law for the time being in force, as an addition to, and in the same manner as, a duty of customs, but not including- (a) the additional duty referred to in subsection (5) of section 3 of the Customs Tariff Act, 1975; (b) the safeguard duty referred to in sections 8B and 8C of the Customs Tariff Act, 1975; (c) the countervailing duty referred to in section 9 of the Customs Tariff Act, 1975; (d) the anti-dumping duty referred to in section 9A of the Customs Tariff Act, 1975; and (e) the Education Cess chargeable under section 94 of the Finance (No.2) Act, 2004 and Secondary and Higher Education Cess on imported goods. (2) The Secondary and Higher Education Cess on imported goods shall be in addition to any other duties of customs chargeable on such goods, under the Customs Act, 1962 or....
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....the same, though subsequently, in view of the notifications, if the Customs Department come forward to take a stand that the mode of payment of the education cess even though being part of the customs duty, shall not be on the same line by using the scrip, such kind of payment can be insisted upon, provided only in future cases and not in the cases where it has already been paid and where the goods have been cleared. This was exactly been made in execution by Circular No.2/2020 dated 10.01.2020. 26. When such a circular was issued by the Customs Department and the same having been implemented in respect of various people like the petitioner, the benefit of the said circular cannot be denied to the petitioner on the alleged reason that, the education cess or the higher and secondary education cess being a different component cannot be treated as customs duty or additional customs duty and therefore, the benefit conferred under Clause 11 of the said circular cannot be made available to the petitioner. The said view taken by the respondent / Customs Department, in the considered opinion of this Court, in view of the aforestated legal position, is untenable and unacceptable. 27. The ....