TaxTMI 
TaxTMI 
2024 (2) TMI 446
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....) and SEIS (Service Exports from India Scheme). On importation, the appellants have paid the customs duties, consisting of BCD, Education Cess (EC), Secondary and Higher Education Cess (SHEC) and Social Welfare Surcharge (SWS) by debiting them in the duty scrip tendered at the time of import. The import of goods against MEIS and SEIS are governed by Notification No.24/2015-Cus, dated 08.04.15 and Notification No. 25/2015 - Cus dated 08.04.2015 respectively. 2. The contention of the department is barring the basic customs duty, other duties namely EC, SHEC and SWS ought not to have been debited in the duty credit scrips According to the department, these duties ought to have been paid in cash. It is the case of the department to invoke the extended period, that the appellants have deliberately debited these duties from the duty free scrips with an ulterior motive to evade the payment of duties. The appellants have also not informed the department above the debits made in the scrips, of these duties. In respect of duty demand pertaining to EC and SHEC, in appellants' own case involving identical factual matrix, Hon'ble CESTAT, Mumbai, vide Final Order No. 87149/2023 dated 16....
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.... 2485287 dated 17th September 2022. Petitioner thereafter also filed 12 other Bills of Entry referred to in paragraph no.9 of the petition. It is petitioner's case that in each of the Bill of Entry, petitioner claimed and was allowed exemption under Notification No. 24/2015-Customs dated 08.04.2015. The proper officer assessed zero/nil Basic Customs Duty (BCD) and Additional Customs Duty (ACD). The proper officer, however, notionally assessed SWS, i.e., Social Welfare Surcharge and collected amount in cash from petitioner." ........... "6. Mr. Mishra also relied upon the Circular dated 10th January 2020. Mr. Shah submitted and rightly says after those judgments and the circular relied upon by Mr. Mishra the Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India had issued Circular dated 1st February 2022 where it has clarified that where the SWS applied is at percentage of the aggregate of customs duty payable on import of goods and not on the value of imported goods, the SWS shall be computed on the percentage of value equal to Nil (as aggregate amount of customs duty payable is zero). For ease of reference, the Circular dated 1st February 20....
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....mpugned Order at para 19 wrongly confirms the demand by invocation of extended period of limitation under Section 28 (4) of Customs Act, 1962 ("Act"). Under Section 47 of the Act, out of charge for these bills of entry were granted after the proper officer was satisfied that import duties have been paid by the importer. Passing of an order under Section 47 is not an empty formality. That being said, there is no case for invocation of extended period in the present case. The entire duty demand in all the SCNs have been confirmed by invocation of extended period. No part of the duty demand falls within the normal period of limitation. 5.2 The Impugned Order at Para 22 confirms the imposition of penalty under Section 114 A of the Act observing that the cesses were paid by debiting the MEIS scrips were recoverable under Section 28 (4) of the Act. The appellants submit that when the EDI system itself permitted the appellants to pay the cess using the scrip. there could not have been suppression of facts etc. Therefore, penalty under Section 114A of the Act is not sustainable, especially when the duty demand is otherwise time barred. 5.3 The Impugned Order at para 23 confirms impositio....
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....T 3 (S.C) was clearly distinguishable as in that case the duty as an NCCD was being levied as a separate ad valorem duty under different legislation and was not required to be worked out on the basis of a 'Nil' Excise Duty which in that case was specifically exempted for Area Based Exemption Notification. However, in the instant case as has been upheld in the matter in their own case as reported in 2023 (11) TMI 972-CESTAT MUMBAI which followed decision of La Tim Metal and Industries Vs. Union of India and others as reported in 2022 (11) TMI 1099- BOMBAY HIGH COURT, it has been held that when cess as in this case was collected as percentage of duty liability and which is exempted under any notification the cess could not be computed in the face of Zero duty liability. We are reproducing below para 7 and 8 of the decision: "7. It would appear that demand had been raised for discharge of 'education cess' and 'secondary & higher education cess' that had been debited against scrip issued under the Merchandise Exports from India Scheme (MEIS) in the Foreign Trade Policy (FTP). It would also appear that the objection was primarily to debiting of the scrip for discharge ....
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....ous 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." 8.1 We thus, find that the basis of collection of levy of N.C.C.D and cess are different, with former being ad-valorem and latter being on aggregate of customs duty. 8.2 In view of foregoing, we hold a view that when aggregate of customs duty is 'Nil', Cess etc based on such aggregated duty will also be 'Nil' and could not have been collected. However, on the preposition whether such Cess could not have been debited from scrips and was require to be discharged by paying in cash. We agree with the decision of GEMINI EDIBLES AND FATA INDIA PVT. LTD VS. UNION OF INDIA, as reported in 2020 (1) TMI 2012 - MADRA HIGH COURT....