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2015 (9) TMI 399 - HC - CustomsLevy of Education-cess Exemption of duty under Notification No.45/02/Customs Respondent-assessee filed about 16 bills of entries and claimed benefit of Notification No.45/02/Customs On finalization of assessment, benefit of notification was extended to all bills of entries, exempting duties leviable subject to conditions that duties leviable were debited from relevant pass book under scheme known as DEPB scheme Education cess at 2% on these duties was also debited from duties of DEPB as per clause of Finance Bill 2004 Assesse protested against debit of education cess and in appeal it was held that debit of education cess and in terms DEPB scheme so also exemption notification was impermissible in law Whether tribunal has jurisdiction to hold and declare that notification/circulars issued by Board are inconsistent to legislature Held that - duty exemption remission scheme and duty exemption pass book scheme are essentially to promote economic growth and in terms of new policy adopted by Government of India Education cess on imported goods shall be in addition to any other duties of customs chargeable on such goods under Customs Act, 1962 or any other law for the time being in force As per view taken by Gujarat high court in case of Gujarat Ambuja Exports Ltd. 2012 (7) TMI 679 - GUJARAT HIGH COURT if customs duty is exempted in favour of assesse, then education cess on imported goods is also not to be levied and collected Following High Court Gujarat Judgment, substantial question of law answered in favour of assessee Decided against revenue.
Issues:
1) Challenge to Tribunal's order by revenue 2) Jurisdiction of CESTAT regarding notification/circular consistency 3) Levying Education Cess on imports under DEPB Scheme Analysis: 1) The revenue challenged the Tribunal's order based on the Commissioner of Customs' decision dated 6 December 2004. The appeal primarily focused on substantial questions of law regarding the Tribunal's jurisdiction and powers. 2) The main issue revolved around whether CESTAT has the authority to declare Board-issued notifications/circulars inconsistent with the legislature. The Tribunal's decision was based on the interpretation of relevant provisions and legal principles. 3) The core issue was the levy of Education Cess on imports under the DEPB Scheme. The respondent claimed benefits under Notification No.45/02/Customs dated 22 April 2004. The Tribunal examined the DEPB scheme, Finance Act 2004, and the Exemption Notification to determine the applicability of Education Cess on fully exempted DEPB imports. 4) The Tribunal concluded that Education Cess is not leviable on fully exempted DEPB imports, as the customs duty is nil under the scheme. The Tribunal found the circular dated 31 January 2005 contrary to the Finance Act and the Notification No.45/2002. The revenue's appeal was rejected based on this analysis. 5) The revenue contended that despite exemptions, customs duties remain legally recoverable, including the Education Cess. However, the respondent argued that the Tribunal's view aligns with previous High Court judgments, emphasizing the non-leviability of Education Cess on fully exempted imports. 6) The Tribunal's decision was supported by High Courts of Gujarat, Madras, and Andhra Pradesh, which endorsed the non-leviability of Education Cess on fully exempted imports under the DEPB Scheme. The Gujarat High Court's detailed analysis and interpretation of relevant laws were crucial in upholding the Tribunal's decision. 7) Ultimately, the High Court upheld the Tribunal's decision, citing consistency with previous judgments and the legal framework. The Tribunal's decision was deemed not perverse or vitiated by any legal errors, leading to the dismissal of the revenue's appeal with no costs awarded.
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