TaxTMI 
TaxTMI 
2026 (5) TMI 878
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls have been filed by the Revenue challenging the Orders-in-Original dated 26.02.2020 passed by the Commissioner of Customs (Import), Air Cargo Complex, Sahar, Mumbai, whereby the said Adjudicating Authority, placing reliance upon Circular No. 02/2020-Customs dated 10.01.2020 issued by the Central Board of Indirect Taxes and Customs (CBIC), held that payments of Education Cess, Secondary & Higher Education Cess and Social Welfare Surcharge made through debit in Merchandise Exports from India Scheme (MEIS) duty credit scrips are to be treated as valid discharge of duty liability. 2. The respondents-importers herein had imported various goods and discharged the duty by utilizing MEIS scrips. During audit, it was observed that Social Welfare Surcharge (SWS) from 1.2.2018 onwards @ 10% of BCD and Education Cess (EC) @ 2% and Secondary and Higher Education Cess (SHE)@ 1% prior to 1.2.2018 were also being paid by using MEIS Scrips at the time of import, which as per the department, were not permissible under the governing notifications and the Foreign Trade Policy. 3. Show cause notices were issued to various importers-respondents, listed in the table below, herein under Section 28....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,69,644 19 Bajaj Auto Ltd. S/16-Audit/230(Bajaj)/201920/(SCN 66) NCH/Circle-E dated 21.11.2019 94,84,732 20 Lupin Ltd. S/16-Audit/230(LL)/201920/(SCN 94) NCH/Circle-E dated 21.11.2019 3,69,98,385 4. The Adjudicating Authority, however vide impugned Orders-in-Original dated 26.2.2020, dropped the demand by holding that such payments constituted valid discharge of duty, particularly in light of the CBIC Circular dated 10.01.2020. 5. At the outset, it is pertinent to note that the Revenue has not challenged the acceptance of payment of Social Welfare Surcharge (SWS) through MEIS scrips for past cases, in view of the CBIC Circular dated 10.01.2020 read with Notification dated 10.02.2020 and these appeals are restricted only to the issue whether Education Cess and Secondary & Higher Education Cess (prior to 01.02.2018) could validly be discharged through debit in MEIS duty credit scrips? 6. The learned Authorised Representative for Revenue contended that as per Foreign Trade Policy 2015-20 and Notification No. 24/2015-Cus dated 08.04.2015, utilization of MEIS scrips was restricted to Social Welfare Surcharge, Basic Customs Duty and specified additional d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated as valid discharge of duty. The relevant paragraphs of the said decision are extracted hereunder:- "xxx xxx xxx 19. When that was considered, the Customs department has come to a conclusion that, if at all any duty or additional duty had been paid using scrips that could be accepted as a payment of the revenue and insofar as the other payments like the education cess or higher education or secondary education cess are concerned, the same cannot be treated as form part of the customs duty or additional customs duty. Therefore, since it is a different component, that kind of benefit under Clause 11 of Circular No. 2/2020, cannot be extended to the petitioner. 20. In aid of the said decision taken, the Customs department has heavily relied upon the decision in Unicorn Industries case, cited supra. The relevant portion of the Unicorn Industries case has already been quoted above, where the issue was, the assessee sought for exemption under Notification No. 71/2003 of Central Excise. While deciding the same, the Hon'ble Supreme Court has made it clear that the notification dated 9-9-2003, issued in that case made it clear that exemption was granted under Sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (c) the anti-dumping duty referred to in Section 9A of the Customs Tariff Act, 1975; and (d) the Education Cess on imported goods. (2) The 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 any other law for the time being in force. (3) The provisions of the Customs Act, 1962 and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on imported goods as they apply in relation to the levy and collection of the duties of customs on such goods under the Customs Act, 1962 or the rules or the regulations, as the case may be." 23. Like that, insofar as the secondary and higher education cess is concerned, that has been brought in only under Finance Act, 2007, where the relevant provision is Sections 126 and 129 which are extracted hereunder : "126. (1) Without prejudice to the provisions of sub-section (12) of Section 2, there shall be levied and collected, in accordance with the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd Higher Education Cess on imported goods as they apply in relation to the levy and collection of the duties of customs on such goods under the Customs Act, 1962 or the rules or the regulations made thereunder, as the case may be." 24. In Section 126 of the Finance Act, 2007, a cess to be called the Secondary and Higher Education Cess, to fulfil the commitment of the Government to provide and finance secondary and higher education shall be levied. Therefore, the levy of secondary or higher education cess was first introduced in Finance Act, 2007, by the aforesaid Section 126. In the very same Finance Act, Section 129 makes it clear that the secondary and higher education cess levied under Section 126, in the case of goods specified in the First Schedule to the Customs Tariff Act, 1975, being goods imported into India, shall be as duty of customs at the rate of one per cent calculated on the aggregated of duties of customs. Exactly similar wordings, pari materia to Sections 91 and 93 is available in Section 129 of Finance Act, 2007. Therefore, the effect of these provisions of Finance Act, 2004 and 2007 is that, the education cess at the rate of 2% and higher and secondary....