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2024 (6) TMI 142
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....either in cash or in any other mode. 2. Brief Facts: 2.1. The appellant is in the business of manufacturing and marketing of edible oils and fats. Importing of goods is part and parcel of the appellant's business activities ordinarily attracting levy of Customs Duties. The appellant procured Merchandise Exports from India Scheme (hereinafter referred to as "MEIS") and Service Exports from India Scheme (hereinafter referred to as "SEIS") Scrips, from various exporters, who had obtained such scrips under Chapter 3 of the Foreign Trade Policy (hereinafter referred to as " the FTP"). The appellant offset Customs Duties, by utilizing such MEIS/ SEIS scrips, in terms of Chapter 3 of the FTP. 2.2. SWS was introduced vide Section 110 of the Finance Act, 2018. SWS was to be levied at the rate of 10% of the "aggregate of duties of customs levied and collected" by the Government under Section 12 of the Customs Act. Section 110 of the Finance Act, which provides for SWS, reads as under: "110. Social Welfare Surcharge on imported goods. (1) There shall be levied and collected, in accordance with the provisions of this Chapter, for the purposes of the Union, a duty....
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....ikal and Chennai Ports. The Bills of Entry were assessed and the appellant claimed exemption under Notification Nos. 24 and 25 of 2015 dated 08.04.2015 whereby goods imported against MEIS /SEIS Scrips were exempt from Customs Duties under the First Schedule to the Customs Tariff Act and Additional Duties leviable thereon under Section 3 of the Customs Tariff Act, 1975. SWS was also debited from MEIS / SEIS Scrips by including the same as part of custom duties. 2.4. The methodology adopted by the authorities concerned, after taking one of the Bills of Entry as an illustrative example, is summarized as follows:- i) The assessable value of Bill of Entry No. 3151249 dated 30.05.2019 is Rs. 1,43,58,919.73. ii) The rate of Basic Customs Duty (BCD) applicable is at 45%. iii) 45% of Rs. 1,43,58,919.73 comes to Rs. 64,61,513.88. iv) However, instead of debiting Rs. 64,61,513.88 from the scrips of the appellant, the respondents have debited Rs. 71,07,665.30/-. v) The figure of Rs. 71,07,665.30 actually debited by the respondents is not 45% of Rs. 1,43,58,919.73 but at 49.5% of Rs. 1,43,58,919.73, which includes SWS calculated at 10% of aggregat....
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.... neither be computed nor levied. 3. Order of the learned Single Judge: a) Notification Nos. 24 and 25 of 2015 dated 08.04.2015 provide exemption from customs duty leviable on the imported goods. However, all they do is exempt the payment of such duty in cash. In other words, the duty is levied and paid by debiting the same from the value of MEIS / SEIS scrips. b) SWS is not in the nature of duties of customs, it is an independent levy imposed and collected under a different enactment. c) The exemption granted under Notification Nos.24 and 25 of 2015 is only in respect of payment of customs duty in cash as evident from the fact that appropriate customs duty is debited from the value of the above scrips. In other words, the above adjustment by debiting the MEIS / SEIS scrips towards the duty leviable and payable is an act of duty neutralization and to see that the import duty component is neutralized. To put it more clearly, in effect, though no money representing the duty is physically paid nor goes to the Government exchequer, it is deducted from the value of the scrips, which has money value. The debiting of the scrip amounts to payment of duty. ....
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....a period of two weeks thereafter." 4. Case of the Appellant: a) SWS is calculated at the rate of 10% on the aggregate of custom duties levied and collected. Levy and collection of customs duty is, thus, a precondition for computing and levying SWS. b) Notification Nos.24 and 25 of 2015 exempt goods when imported into India against a duty credit scrip from the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975, and additional duty leviable thereon under Section 3 of the Customs Tariff Act. c) Levy includes declaration of charge / liability and assessment i.e., particularization / computation of the duty that is due. Exemption Notifications ought to be taken into account while making assessment. (See Rayalseema Constructions v. Deputy Commercial Tax Officer, Mannaday Division, Madras, 1 and others [1959 SCC Online Mad 12], Assistant Collector of Central Excise, Calcutta Division v. National Tobacco Co. of India Ltd. [(1972) 2 SCC 560], Mafatlal Industries Ltd. v. Union of India and others [(1997) 5 SCC 536], Hico Products Ltd. v. CCE [1994 (71) ELT 339 (SC)] and Associated Cements Companies Ltd. v. State of Bihar an....
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....(1) of the Customs Act, any notification issued by the Central Government in exercise of its powers under Section 25(1) of the Customs Act would result in exemption from levy (See Union of India v. Modi Rubber [(1986) 4 SCC 66] and Unicorn Industries v. Union of India [(2020) 3 SCC 492]). h) Incentive schemes under MEIS and SEIS are essentially "Duty Foregone" by the Government of India and do not form part of the Consolidated Fund of India which would again demonstrate absence of collection. Perusal of the Union Budget, in particular, Receipt Budget, would reveal that incentives granted under the MEIS and SEIS scheme form part of a "Duty Foregone", by the Government of India. It is, thus, clear that there is neither any levy nor collection of duty under the Customs Act. There is no concept of deemed collection or payment of tax under the Customs Act (See G.Viswanathan v. Hon'ble Speaker, Tamil Nadu Legislative Assembly, Madras [(1996) 2 SCC 353]). i) There was no concept of payment of duty through debit of scrips under the Customs Act until introduction of the Finance Act, 2020. It is only after the introduction of the Finance Act, 2020, that the concept of p....
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....re is, really speaking, no exemption from customs duty, but, the Notifications only provide for payment of duty by debit of the scrips. e) SWS is computed at 10% of the aggregate of Customs duties levied and collected. Only if the Customs duty is 'zero' without any condition attached to it, SWS would also be 'zero'. In the present case, the Customs Duty is levied and recovered by debit of the MEIS/SEIS scrips issued by the DGFT. The importer is, thus, actually paying the Customs duties not by cash, but, by debiting the scrips. f) Exemptions should be interpreted strictly and any ambiguity must be resolved in favour of the revenue. Reliance was placed on the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Commissioner of Customs, Mumbai v. Dilip Kumar [(2018) 9 SCC 1)] in support thereof. g) The learned counsel for the respondents relied upon Circular No.02/2020-Customs dated 10.01.2020, in particular para 9, wherein it has been clarified as under: "9. In view of above there appears no exemption from SWS in the FTP and the relevant Customs exemption notifications. Keeping in view the ratio laid down by H....
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....reading of the above provision would show that sub-section (1) of Section 25 of the Customs Act confers power on the Central Government to grant exemption either absolutely or subject to conditions from the whole or any part of duty of customs leviable thereon. Notification Nos.24 and 25 of 2015 grant exemption from the whole of the Customs duty and additional duties of customs leviable under the Customs Tariff Act, subject to condition attached thereto. 7.3. It was submitted by the learned Senior Counsel for the appellant that the very fact that Notification Nos.24 and 25 refer to Section 25 of the Customs Act as the source of their power, would, by itself, show that the benefit granted under the notifications is in the nature of exemption. In other words, any notification issued under Section 25 of the Customs Act can only be in the nature of exemption and no further enquiry is warranted in determining the nature of the benefit. The above contention was sought to be supported by the appellant by placing reliance on what the appellant would refer to as "Doctrine of Source of Power". 7.4. To the contrary, it is submitted by the learned counsel for the respondents that mere re....
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....25 of 2015 do not, in substance, provide for an exemption from the levy itself, but, only dispense with the requirement of discharging the liability to pay the customs duty by cash, instead, enables discharging the obligation to pay customs duty by debiting the MEIS / SEIS scrips which, in turn, has money value. 7.8. From the above discussion, we have no doubt in our mind that the contention of the appellant that by mere virtue of reference to Section 25 (1) of the Customs Act, the Notifications must be treated as granting exemption from levy itself is liable to be rejected and we would have to travel beyond the nomenclature, form and appearance to discern the true character and nature of the benefit conferred under each notification. 7.9. Before proceeding further, it may be relevant to refer to the notifications issued under Section 25 of the Customs Act in varying forms and nature viz., a) Absolute exemption from the whole of customs duty i.e., exemption from the levy of Customs duty: Notification No. 14/2024 - Customs Date: 12th March, 2024 "G.S.R. 180(E).-In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962....
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.... from so much of the duty of Customs leviable thereon under the said First Scheule as is in excess of the amount calculated at the rate of 30% ad valorem", the following shall be substituted , namely:- "from the whole of the duty of Customs leviable thereon under the said First Schedule in respect of goods specified in column (2) of TABLE-I annexed hereto and from so much of the duty of Customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate of 15% ad valorem in respect of goods specified in column (2) of TABLE-II annexed hereto." (emphasis supplied) c) Exemption against duty credit scrips: Notification No. 13/2020-Customs New Delhi, the 14th February, 2020 "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the said Act), 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 (hereinafter referred to as the said scrip) issued by the Regional Authority under the Scheme for Rebate of State and Ce....
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....xemption from the whole of customs duty i.e., exemption from the levy of Customs duty. b. Exemption granted from levy in excess of a specified rate, which is, in effect, a reduction in the rate of tax which is distinct from exemption as normally / commonly understood. c. Exemption against duty credit scrips. 7.11. While the first category of notifications referred to above results in exemption from the levy, the second category of notifications results in reduction in the rate of tax and the levy continues to operate, while the third category of notifications is grant of exemptions against credit scrips. 7.12. We had referred to the above notifications only to show that the Central Government, in exercise of its powers under Section 25 of the Customs Act, had issued notifications which vary in nature and scope, some of which do not conform as exemption in its classical sense. This would only show, rather, reinforce our view that it is necessary for the Courts not to assume that all notifications under Section 25 of the Customs Act would constitute exemption from the levy itself, but, would depend on the substance of the notification. (b) Whether a notific....
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....end the exemption to Special Duty of Excise, reference would have been made not only to Rule 8(1) but also to sub-section (4) of Section 32 of the Finance Act or other similar provision. Reliance was also made to certain other notifications wherein reference was made to the provisions relating to other levies in respect of which the exemption was sought to be extended in addition to Rule 8(1) of the Central Excise Rules. It was then held that in the absence of reference to Subsection (4) to Section 32 in the notification, the exemption cannot be construed as covering other levies such as Special Excise Duties. The relevant portion of the judgment is extracted hereunder: "9. ..... Undoubtedly, by reason of sub-section (4) of section 32 of the Finance Act, 1979 and similar provision in the other Finance Acts, rule 8(1) would become applicable empowering the Central Government to grant exemption from payment of special duty of excise, but when the Central Government exercises this power, it would be doing so under rule 8(1) read with sub-section (4) of section 32 or other similar provision. The reference to the source of power in such a case would not be just to rule 8(1), si....
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.... of duty of excise. The notifications in the present case were issued under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 simpliciter without reference to any other statute and hence the exemption granted under these two notifications must be construed as limited only to the duty of excise payable under the Central Excises and Salt Act, 1944." ..... "10. We may incidentally mention that in the appeals a question of interpretation was also raised in regard to Notification bearing No. 249/1967 dated November 8, 1967 exempting tyres for tractors from 'so much of the duty leviable thereon under item 16 of the First Schedule to the Central Excises and Salt Act, 1944 as is in excess of 15 per cent.'. The argument of the respondents in the appeals was that the exemption granted under this notification was not limited to the duty of excise payable under the Central Excises and Salt Act, 1944 but it also extended to special duty of excise, additional duty of excise and auxiliary duty of excise leviable under other enactments. This argument plainly runs counter to the very language of this notification. It is obvious that the exemption granted under this ....
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....62) read with sections 91 and 94 of the Finance (No.2) Act, 2004 (23 of 2004) , the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all goods specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of the Education Cess leviable thereon under the said sections 91 and 94 of the said Finance Act, which is in excess of the amount calculated at the rate of two per cent. of 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 said Customs Act, and any sum chargeable on such goods under any other law for the time being in force, in addition to and in the same manner as, a duty of customs, but not including- (i) the additional duty referred to in sub-section (5) of section (3) of the said Customs Tariff Act; (ii) the safeguard duty referred to in sections 8B and 8C of the said Customs Tariff Act; (iii) the anti-dumping duty referred to in section 9A of the said Customs Tariff Act; (iv) the Education Cess on imported goods....
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....t Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India, from whole of Secondary and Higher Education Cess leviable thereon under section 139 of the said Finance Act." Notification No. 14/2024-Customs Date: 12th March, 2024 "G.S.R. 180(E).-In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and sub-section (12) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts gold falling under Customs Tariff Heading 7108 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by Reserve Bank of India , from the whole of the duty of customs leviable thereon as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of Agriculture Infrastructure and Development Cess, leaviable under Section 124 of the Finance Act, 2021 (13 of 2021)." (emphasis supplied) 7.20. Similarly, whenever the Central Government intended to grant exemption to SWS, the recitals in the notification referred to the provision under the ....
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....3 AC 156 : AIR 1933 PC 16] , the question was as to the validity of certain provisions in a Canadian statute providing for the search of vessels beyond territorial waters. These provisions occurred in a customs statute, and were intended to prevent evasion of its provisions by smugglers. In affirming the validity of these provisions, Lord Macmillan referred to the legislative practice relating to customs, and observed: 'When a power is conferred to legislate on a particular topic it is important, in determining the scope of the power, to have regard to what is ordinarily treated as embraced within that topic in legislative practice and particularly in the legislative practice of the State which has conferred the power. Wallace Bros. & Co. Ltd. v. CIT, [AIR 1948 PC 118 : 75 IA 86] Lord Uthwatt observed : 'Where Parliament has conferred a power to legislate on a particular topic it is permissible and important in determining the scope and meaning of the power to have regard to what is ordinarily treated as embraced within that topic in the legislative practice of the United Kingdom. The point of the reference is emphatically not to seek a pattern to whi....
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....Apex Court, in SRD Nutrients, supra, placed reliance upon Circular dated 10.08.2004 wherein it was clarified that Education Cess is part of Excise Duty. Placing reliance on the above circular, the Apex Court held as under: "21. One aspect that clearly emerges from the reading of these two circulars is that the Government itself has taken the position that where whole of excise duty or service tax is exempted, even the education cess as well as secondary and higher education cess would not be payable. These circulars are binding on the Department. 22. Even otherwise, we are of the opinion that it is more rational to accept the aforesaid position as clarified by the Ministry of Finance in the aforesaid circulars. Education cess is on excise duty. It means that those assessees who are required to pay excise duty have to shell out education cess as well. This education cess is introduced by Sections 91 to 93 of the Finance (No. 2) Act, 2004. As per Section 91 thereof, education cess is the surcharge which the assessee is to pay. Section 93 makes it clear that this education cess is payable on "excisable goods," i.e., in respect of goods specified in the First Schedule....
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....he three-Judge Bench in Modi Rubber Ltd. [Union of India v. Modi Rubber Ltd., (1986) 4 SCC 66 : 1986 SCC (Tax) 781] and Rita Textiles (P) Ltd. [Rita Textiles (P) Ltd. v. Union of India, 1986 Supp SCC 557 : 1987 SCC (Tax) 87] were not placed for consideration. Thus, the decisions in SRD Nutrients (P) Ltd. [SRD Nutrients (P) Ltd. v. CCE, (2018) 1 SCC 105] and Bajaj Auto Ltd. [Bajaj Auto Ltd. v. Union of India, (2019) 19 SCC 801 : 2019 SCC OnLine SC 421] are clearly per incuriam. .................." 7.27. In this background, it becomes necessary to take a closer look at the decision in Unicorn Industries, supra. The Apex Court, in Unicorn Industries, supra, was dealing with the question whether a notification granting exemption from Central Excise Duty and Additional Excise Duties would also result in exemption of the other duties, viz., National Calamity Contingent Duty (NCCD), Education Cess and Higher Education Cess, inasmuch as, according to the appellant, they are also in the nature of excise duty. 7.28. We may note the facts considered by the Supreme Court very briefly. The Central Government, with a view to promote industrial development in the north eastern region, annou....
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....and 93 of the Finance Act 2004, while Higher Education Cess was introduced vide Section 126 of the Finance Act, 2007. The writ petition came to be dismissed holding that NCCD, Education Cess and Secondary and Higher Education Cess were not covered under Exemption Notification No.71 of 2003-CE. 7.30. The primary contention of the appellant before the Supreme Court was that NCCD, Education Cess and Secondary and Higher Education Cess form part of Excise Duty and thus, exemption under Notification No.71 of 2003 would cover the same. In support of the above contention, reliance was placed on the judgment of the Apex Court in SRD Nutrients, supra and Bajaj Auto, supra, while also placing reliance on the circulars dated 10.08.2004 and 08.04.2011 issued by the Central Board of Excise and Customs. 7.31. Against this background, the Apex Court framed the following question: "22. The main question arising for consideration is when 100 per cent exemption had been granted for excise duty for a period of 10 years, whether the exemption notification issued for the state of Sikkim on 9.9.2003 shall be confined to the basic excise duty under the Act of 1944, additional duty under the A....
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....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 and higher education cess, they cannot be said to have been exempted. The High Court was right in relying upon the decision of three-Judge Bench of this Court in Modi Rubber Limited (supra), which has been followed by another three-Judge Bench of this Court in Rita Textiles Private Limited (supra)." (emphasis supplied) 7.33. Importantly, the Apex Court proceeded to reject the argument that as the excise duty was nil, no additional duty can be charged. The levy which was under consideration in particular Education Cess and Secondary Education Cess provided for computation at the rate of 2% and 1% of the aggregate of all duties of excise. The provisions levying Education Cess and Secondary and Higher Education Cess are extracted below as they would have a material bearing on the issue on hand: "19. ..... "93. Education Cess on Excisable Goods. - (1) The Education Cess levied under Section 81, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985....
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....and 1% of duties of excise levied and collected. The fact that there may be an exemption of excise duty and that other duties on which exemption was sought such as Education Cess and Secondary and Higher Secondary Cess had to be computed on the basis of aggregate of excise duties levied and collected, which itself was exempt, was found to be no reason to extend the exemption to other levies / duties based thereupon viz., Education Cess and Secondary and Higher Secondary Cess. The argument that there would be difficulties in computation of duties was rejected and it was held that it could be computed. The relevant portion is extracted hereunder: "41. The circular of 2004 issued based on the interpretation of the provisions made by one of the customs officers, is of no avail as such circular has no force of law and cannot be said to be binding on the court. Similarly, the circular issued by the Central Board of Excise and Customs in 2011, is of no avail as it relates to service tax and has no force of law and cannot be said to be binding concerning the interpretation of the provisions by the courts. The reason employed in SRD Nutrients P. Ltd.*** that there was nil excise du....
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....for consideration in the context of DEPB scheme, which, in many ways, is similar to MEIS / SEIS schemes. Importantly, while considering the scope of the notification involving DEPB scheme, divergent views have been expressed. One view was that notwithstanding the debiting of the scrips to the extent of duty levied, it is an exemption while the other view was that the notification requiring debiting of DEPB scrips is not an exemption from levy, but, rather, an option extended with regard to the mode of discharging the duty liability. We shall, therefore, proceed to examine the judgments rendered under the DEPB scheme in greater detail, for, they have a material bearing on the issue before us. 7.38. The Madras High Court, in TANFAC Industries Ltd. v. Assistant Commissioner of Customs, Cuddalore [2009 (240) ELT 341], dealt with the question as to whether adjustment of credit granted by the Government on export of goods under the DEPB scheme towards customs duty payable, but for the exemption, is equivalent to payment of duty in cash. This Court referred to a Circular dated 20.07.2007 wherein it was, inter alia, clarified that clearances under the DEPB scheme require debiting from t....
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.... DEPB Scheme Under this scheme, the exporters are issued DEPB scrips which allows them the specific amount to be utilized for payment of Customs duty. The amount for which DEPB scrip is issued depends upon the rate for a particular export product. The Ministry of Commerce notifies DEPB credit rates for export of an item. The DEPB scrip is freely transferable and can be used to debit the payment of duty at the time of clearance of goods except capital goods and goods mentioned in negative list." 12. In fact, in that case, there were three bills of entry, only one of them was goods exported under the DEEC Scheme and other two were under the DEPB Scheme. The difference drawn by the Supreme Court in the above judgments makes it clear that under the DEEC scheme, the clearance is allowed duty-free, whereas under the DEPB scheme, the exporters are issued DEPB scrips which allows them specific amounts to be utilised for payment of customs duty. Therefore, the importers, who use DEPB scrips, pay duty not by cash but only by way of credit. This is clear from the judgment of the Supreme Court extracted above. Therefore, the goods cleared under the DEPB Scheme cannot be ....
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....ly, the Gujarat High Court, in Gujarat Ambuja Exports Ltd. v. Government of India [2012 SCC OnLine Guj 6133], considered the decision of the Madras High Court in TANFAC Industries, supra, and expressed its inability to concur with the view expressed in the said case. The relevant portion of the said judgment is extracted hereunder: "29. We are not unmindful of the decision of the Madras High Court in the case of Tanfac Industries Ltd. v. Asst. Commissioner of Customs reported in [2010] 2 GSTR 468 (Mad) ; (2009) 240 ELT 341 (Mad). In the said case, in the background of interest on warehoused goods where such demand of interest on goods cleared beyond 90 days arose, the Division Bench of the High Court came to the conclusion that on the imports under the DEPB Scheme, the importers pay duty not by cash but by way of credit and, therefore, the goods cleared under the DEPB Scheme cannot be treated as exempted goods. It can only be treated as duty-paid goods. 30. With respect, we are unable to concur with such a view. Firstly, in the said decision, the question of levy of education cess was not involved. More particularly in our view, exemption Notification No. 45/2002 ....
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....uld show that the intention of the Government is to exempt the whole of the duty, additional duty and special additional duty. It is, therefore, not possible to read any further restriction as to levy of education cess in respect of duty free imports under DEPB scheme. Further there is no dispute that the ruling of South Zone Bench of CESTAT in Ruchi Health Foods Ltd. and that of the Mumbai Bench in Reliance Industries Ltd. have become final and the Revenue has not challenged the same. Therefore, this appeal is misconceived. The appeal, for the above is reasons, is dismissed." 7.43. The Special Leave Petition filed against the above order in Kedia Overseas, supra, was dismissed and a review filed also stood dismissed. One more decision which may have to be referred to is of the Madras High Court in Commissioner of Customs, Tuticorin v. DCW Ltd. [(2014) 306 ELT 398], supra, wherein, placing reliance upon a communication in DOF No.334/3/2004-TRU on the issue as to whether goods fully exempt from excise duty or cleared without payment of excise duty / customs duty (such as clearance under bond of fulfillment of certain condition) would be subject to cess, it was held that ....
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....ent of the jurisdictional High Court and the judgments of the other High Court would have only persuasive effect. We would think that in the above circumstance, we are bound by the Coordinate Bench decision of this Court in TANFAC Industries, supra, since the decision of the Andhra Pradesh and Gujarat High Courts are not binding on us. In this regard, it may be relevant to refer to the judgment of the Bombay High Court in the case of Commissioner of Income Tax v. Thana Electricity Supply Ltd. [(1994) 206 ITR 727], wherein, it was held as under: "10 Though there is no provision like article 141 which specifically lays down the binding nature of the decision of the High Courts, it is a well-accepted legal position that a single judge of a High Court is ordinarily bound to accept as correct judgments of courts of co-ordinate jurisdiction and of the Division Benches and of the Full Benches of his court and of the Supreme Court. Equally well-settled is the position that when a Division Bench of the High Court gives a decision on a question of law, it should generally be followed by a co-ordinate Bench of the same High Court. If the co-ordinate Bench in the subsequent case wants....
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.... bind, we shall now deal with the decision of this court in DCW, supra, which is also a Division Bench judgment of this Court. We are of the view that the decision in DCW, supra, loses its relevance / significance, inasmuch as, it has been rendered without taking note of the judgment in TANFAC Industries, supra, and thus, per incuriam. In this regard, it may be relevant to refer to the judgment in the case of State of Bihar v. Kalika Kuer [(2003) 5 SCC 448]: "5. At this juncture we may examine as to in what circumstances a decision can be considered to have been rendered per incuriam. In Halsbury's Laws of England (Fourth Edition) Vol. 26: Judgment and Orders Judicial Decisions as Authorities (pages 297-298, Para 578) we find it observed about per incuriam as follows: "A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of coordinate jurisdiction while covered the case before it, in which case it must decide which case to follow or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a....
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....uty 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." (emphasis supplied) 7.49. It may also be relevant to understand the nature and use of the MEIS/SEIS Scrips under the Foreign Trade Policy. It was submitted that debiting of the scrips to the extent of customs duty leviable is procedural and a purely administrative exercise and cannot be treated as payment of duty and thus, the pre-requisite for levy of SWS viz., levy and collection of custom duty is absent. The above contention is liable to be rejected, inasmuch as, it is contrary to the FTP 2015-2020, wherein, it is provided as under: "3.00 Objective The objective of schemes under this chapter is to provide rewards to exporters to offset infrastructural inel. ficiencies and associated co....
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....the Consolidated Fund of India is a sine qua non for a levy to operate / exist? 7.52. It was submitted by the appellant that by virtue of Article 266 of the Constitution of India, all tax receipts form part of the Consolidated Fund of India. However, tax incentives through exemptions do not form part of the Consolidated Fund of India. The present notification which provides for exemption subject to the MEIS/SEIS scrips being produced for debit of the duty leviable on the goods imported, do not form part of the Consolidated Fund of India. Instead, it was treated by the Government of India as duty foregone and thus, there is no collection of any duty. Resultantly, there can be no levy of SWS which is computed at 10% of aggregate of customs duty levied and collected. The above submission is untenable, inasmuch as, merely because the taxes / duties levied and recovered do not form part of Consolidated Fund, it would not mean that there is no levy or collection. It was submitted that debiting of scrips viz., MEIS and SEIS scrips would not result in the Consolidated Fund being credited and it was submitted that it is yet another reason why there is no collection of any duty which is a....
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....s no opinion in this appeal. All we are considering at this stage is whether even on the assumption made by Mr. Pathak, it would be permissible for him to contend that the Act which is otherwise valid, is rendered invalid because the funds in question will not go into the Consolidated Fund of India. In truth, this argument again proceeds on the basis that Parliament has passed the Act not for the purpose of treating the recoveries made as those under its provisions retrospectively enacted, but for the purpose of validating the said recoveries as made under the invalid State Acts; and we have already pointed out that Section 3 completely negatives such an assumption. Therefore, we do not think that Mr Pathak is right in contending that the provisions of the Act are invalid in any manner." (emphasis supplied) 7.53. If the fact that taxes do not reach the Consolidated Fund of India cannot be a reason to question the levy, we fail to see how that aspect would have any bearing on determining the scope or nature of any exemption notification or in determining the imposition or otherwise of a levy or its collection. It is, thus, clear that the attempt by the appellant to suggest tha....