AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1223
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....2021 (hereinafter referred to as the "impugned orders") respectively. Since the issue involved is common and the impugned orders read identical, all these appeals are decided by a common order. 2. Briefly stated, the facts of the case are that the Appellant is engaged in the business of refining and selling edible oils. For the said purpose, the Appellant imports Crude Edible Oil from various countries and carries out refining thereof at its manufacturing facility located at Haldia (West Bengal). During the period April 2020 to September 2020, the Appellant had filed 160 Bills of Entry (hereinafter "impugned BOEs) on the EDI Portal for the import of 160 consignments of crude palm oil by availing benefit of Exemption Notification Nos. 24/2015 - Cus. and 25/2025 - Cus. both dated 08.04.2015 issued under MEIS/SEIS Scheme, which are export promotion schemes. While Basic Customs Duty ('BCD') stood specifically exempted under these notifications, the Appellant was constrained to pay the Social Welfare Surcharge (SWS) computed @10% on the notional BCD in cash, for causing clearance of these consignments. The Appellant was of the view that since BCD was not collected pursuant to the exempt....
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....C) and Secondary and Higher Education Cess (SHEC), introduced vide the Finance (No. 2) Act, 2004 and Finance Act, 2007 respectively, are also in the nature of surcharges, akin to SWS and are calculated at a certain percentage of the aggregate of duties of Customs "levied and collected" under Section 12 of the Customs Act, 1962. Apropos the said surcharges, the Board vide its Circular No. 345/2/2004 - TRU dated 10.08.2004 had clarified in response to Issue No. 2 that duties which are both "levied and collected" shall be taken into account for the purpose of calculation of the surcharges and as such when the duties/cesses are themselves not collected owing to an exemption or clearance under a specified procedure, there would be no leviability of EC. Further, in the context of goods imported against exemption Notifications operationalizing DEPB and Target Plus Scheme, dealing with a similar question of leviability of EC and SHEC, a consistent view has been taken by various High Courts and Tribunal that there would be no liability for EC and/or SHEC despite the Circular No. 5/2005 - Cus dt. 31.01.2005. Reliance in this regard is placed upon the following decisions: 1. Gujarat Ambuja ....
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....Although, it has been observed by the Ld. Appellate Commissioner that the DEPB is akin to MEIS/SEIS and provisions with respect to EC and SHEC are on the same footing as that of SWS, yet, by relying upon the conditions stipulated under Notification No. 96/2004 dated 17.09.2004 and the provisions of the FTP, it has been held by the Ld. Appellate Commissioner that there is no factual exemption from the payment of BCD. a) Notification No. 24 and 25 are issued by exercising the powers conferred under Section 25 of the Customs Act, 1962 which confers the Government to grant exemption absolutely or subject to conditions as may be specified. The provisions/conditions contained in the said notifications are unambiguous as such the same deserves a strict literal interpretation in terms of the judgement of the Hon'ble Supreme Court in the case CC (Import), Mumbai Vs. Dilip Kumar and Company [(2018) 9 SCC 1]. Further, Customs exemption notification should be construed on its own terms without any intendment of the provisions of FTP. Reliance in this regard is being placed on the judgement of the Hon'ble Supreme Court in the case of CC Hyderabad Vs. Pennar Industries Limited [2015 (322) E.L.....
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....bit of the duty credit scrips by treating it as an additional duty of Customs is well justified. a) Circular no. 05/2005 - Cus. dated 31.01.2005 has been held to be contrary to the provisions of the law and was set aside vide the judgement in the case of Gujarat Ambuja Exports Limited (supra). Therefore, the observation of the Ld. Appellate Commissioner in so far as it seeks to apply the said circular to the facts of the present case is unsustainable and arbitrary. b) Further, the said observation runs contrary to the ratio as laid down in the case of Unicorn Industries (supra) whereby it was held that when only specified duties are exempted vide an exemption notification, other duties which are not specified therein are not automatically exempted. 4. The learned DR supports the impugned orders and makes the following further submissions: (a) Circular No. 2/2020-Cus dated 10.01.2020 specifically provides for levy and collection of SWS in case of goods imported against MEIS/SEIS scrips and being specific should prevail over Circular No. 03/2022-Cus dated 01.02.2022 (b) BCD is not generally exempted under Notification No. 24/2015-Cus(Tariff) dt. 8.04.2015 but paid by debit to ....
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.... and not an exemption perse so as to justify the computation of SWS. However, we find that BCD amount is conspicuously reflected as "zero" in the BOEs filed availing the said notifications, which is not in consonance with the contention of the revenue that BCD is collected in case of goods imported under the said notifications. The Hon'ble Supreme Court in the Somaiya Organics Case (supra) has held in no un-certain terms that the expression "collection" in the context of tax laws would mean "physical realization of tax" where as in the instant case, the Appellate Commissioner has himself accepted at para 28 of the impugned orders that no money representing BCD goes to the exchequer under the said notifications meaning thereby that the test of "physical realization of tax" is clearly not met and the debit of BCD to the scrip is at best a notional collection of tax when the said notifications are read in entirety. Moreover, a similar condition of debit to the duty credit scrips as prevalent in the notifications operationalizing the DEPB scheme and the Target Plus Scheme had fallen for consideration of various High Courts and Tribunal in the following cases in the context of levy and ....
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....s followed in S.No. (iii) to (v) above. The Hon'ble Madras High Court in S.No.(iii) above was concerned with the subsequent notification no. 96/2004 - Cus dated 17.09.2004 operationalizing the DEPB Scheme and the Tribunal in S.No. (v) was concerned with the notification no. 32/2005-Cus operationalizing the Target Plus Scheme. The conditions of debit of BCD to the scrip and the availment of drawback with respect to the subsequent exports out of the imported inputs were also prevalent in notification no. 96/2004 - Cus dt. 17.09.2004 and notification no. 32/2005-Cus. The learned Appellate Commissioner has himself accepted at para 16 & 17 of the impugned Orders that the DEPB Scheme is similar to the MEIS/SEIS Scheme and that the levy of SWS has replaced EC but erroneously relies upon Circular No. 5/2005-Cus dt. 31.01.2005, which has been held invalid and contrary to Section 81 and Section 84 of the Finance Act, 2004 and quashed by the High Court in the Gujarat Ambuja Exports Case (supra). At this stage, it would also be pertinent to refer to the provisions of Section 94 of the Finance (No. 2) Act, 2004, which reads as under: (1) The Education Cess levied under Section 91, in the case....
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....he later Circular does not contemplate that its operation is limited to situations not covered by the earlier circular. It is settled by the Hon'ble Supreme Court in the case of Suchitra Components Ltd reported in 2007 (208) ELT 321 that a beneficial circular is to be applied retrospectively. Moreover, both the Circulars were considered by the Hon'ble Bombay High Court in the La Tim Metal Case (supra) in its order dated 15.11.2022 passed in WP No. 12183/2022 at para 6 thereof while holding that when the BCD is "nil", SWS, being computed at the rate of 10% of BCD, shall also be "nil". Further, as already observed above Circular No. 5/2005 dt. 31.01.2005 which provided for levy and collection of Education Cess in case of goods imported under the notifications operationalizing the DEPB Scheme was held to be not in consonance with provisions of Section 94 of the Finance (No. 2) Act, 2004. Therefore, the circular dated 10.1.2020 which takes the same view for SWS as was canvassed in Circular dt. 31.01.2005 for Education Cess cannot be given primacy over the later circular dt. 01.02.2022. 9. We also find that the Hon'ble Supreme Court in the Unicorn Case (supra) was concerned with the in....