2015 (12) TMI 172 - AT - Customs

Target Plus Scheme - Discharge of Education Cess @ 2% on the goods imported - revenue submitted that under the Target Plus Scheme, basic customs duty and additional customs duty are exempted but Education Cess is not exempted. - Held that - first appellate authority was correct to come to such a conclusion. This view of the first appellate authority and the view of this Tribunal is affirmed by the Hon ble High Court in the case of Pasupati Acrylon Ltd. (2014 (1) TMI 169 - GUJARAT HIGH COURT ). - As regards the reliance placed on Circular No. 5/2005 we find that the learned Counsel is correct in bringing to our notice that the said Circular has been struck down in the case of Gujarat Ambuja Exports Ltd. (2012 (7) TMI 679 - GUJARAT HIGH COURT ). - the first appellate authority has not erred in passing such an order. - Impugned order is upheld as correct, legal and does not suffer from any infirmity - Decided against Revenue.

Summary

Issues:
Discharge of 2% Education Cess on goods imported under Target Plus Scheme.

Analysis:
The Revenue filed appeals against the first appellate authority's decision to allow the respondent-assessee's appeals based on a Ministry of Finance Clarification from 2004. The issue revolved around the discharge of 2% Education Cess on goods imported under the Target Plus Scheme. The Revenue argued that Education Cess had to be collected despite exemptions on basic customs duty and additional customs duty. They relied on Circular No. 5/2005-Cus for levy and collection of the Education Cess, along with Notification 32/2005-Cus for liberalization in customs duties payment. The respondent's counsel contended that Circular No. 5/2005 had been invalidated by the High Court and cited relevant case law to support their position.

The first appellate authority's decision was based on the clarification that if goods are fully exempted from customs duty, no Education Cess is leviable. The authority highlighted the unnecessary harassment and litigation caused by charging Education Cess when basic customs duty and additional customs duty were exempted or not paid in cash. The Tribunal concurred with the authority's findings, citing the binding nature of the Board's instructions and the Chief Commissioner's clarifications. The Tribunal also referenced a High Court judgment affirming a similar view in a related case, supporting the first appellate authority's decision.

Regarding the reliance on Circular No. 5/2005, the Tribunal acknowledged that the circular had been struck down by the High Court in a previous case. Given the factual findings and judicial precedents, the Tribunal found no grounds to interfere with the first appellate authority's order, concluding that it was correct, legal, and free from infirmity. Consequently, the impugned order was upheld, and the Revenue's appeals were rejected.