2015 (10) TMI 327 - AT - Customs

Demand of Education Cess @ 2% citing CBEC Circular No.5/2005, dt.31.01.2005 - Goods imported against DEPB licence claiming exemption - Held that - Importer/respondents had imported Crude Palm Oil in bulk at Bedi Port, Jamnagar, under DEPB scheme, without payment of duty. There was a demand of Education Cess @ 2% citing CBEC Circular No.5/2005, dt.31.01.2005. We find that the issue is no more res integra in view of the decision of Hon ble Gujarat High Court in the case of Commissioner of Customs Vs Pasupati Acrylon Ltd - 2014 (1) TMI 169 - GUJARAT HIGH COURT , which has been upheld by Hon ble Supreme Court as reported in 2015 (9) TMI 666 - SUPREME COURT . The Hon ble Gujarat High Court in the case of Pasupati Acrylon Ltd (supra) held that import made under DEPB scheme, of the goods which are fully exempt from payment of Customs duty and therefore, no Customs duty is levied and collected. The Education Cess at the prescribed rate also cannot be levied. - Decided against Revenue.

Summary

Issues:
Appeal against Commissioner (Appeals) order, Import of Crude Palm Oil under DEPB scheme without duty payment, Demand of Education Cess, Applicability of CBEC Circular, Precedent set by Gujarat High Court and Supreme Court.

Analysis:
The appeals were filed by the Revenue against the order of the Commissioner (Appeals) where the Adjudication orders were set aside, and the appeals filed by the Respondents were allowed. The issue at hand involved the import of Crude Palm Oil in bulk at Bedi Port, Jamnagar, under the DEPB scheme without payment of duty. The Revenue argued for a demand of Education Cess at 2% based on CBEC Circular No.5/2005. However, the Tribunal referred to the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Customs Vs Pasupati Acrylon Ltd, which was upheld by the Hon'ble Supreme Court. The High Court held that imports made under the DEPB scheme for goods fully exempt from Customs duty do not attract Customs duty or Education Cess.

The Tribunal, in line with the precedent set by the Hon'ble Gujarat High Court, concluded that no Customs duty or Education Cess could be levied on imports made under the DEPB scheme for goods fully exempt from Customs duty. Therefore, the appeals filed by the Revenue were rejected, and the orders of the Commissioner (Appeals) were upheld. The decision was based on the established legal principle and interpretation of the relevant laws and circulars. The Tribunal's decision was guided by the legal precedents set by the higher courts, ensuring consistency and adherence to the law in similar cases. The judgment provides clarity on the applicability of Education Cess in cases of imports under specific schemes and exemptions, contributing to the jurisprudence on Customs duty and related charges.