2018 (5) TMI 994 - AT - Customs

Charge-ability of Education Cess - import under DEPB under N/N. 45/2002-Cus - in case of clearance of imported goods by debiting the duty in DEPB Passbook under N/N. 45/2002-Cus, whether Education cess is payable or otherwise? - Held that - identical issue decided in the case of The Commissioner of Customs (Export) Versus M/s. Reliance Industries Ltd. 2015 (9) TMI 399 - BOMBAY HIGH COURT , where it was held that in case of import under DEPB under N/N. 45/2002-Cus, the Education Cess is not chargeable. Revenue has placed reliance on the Hon ble Madras High Court s judgment in the case of TANFAC Industries Ltd. Vs Asstt. Commissioner of Customs, Cuddalore 2009 (4) TMI 92 - MADRAS HIGH COURT , where it was held that it cannot be said that the customs duty is exempted under DEPB. Education Cess is also liable to be debited in DEPB or ought to have been paid in cash - this judgment has been Consideration by Hon ble High Court of Gujarat in the case of Gujarat Ambuja Exports Ltd 2012 (7) TMI 679 - GUJARAT HIGH COURT . Moreover the Hon ble Madras High Court in another judgment in the case of DCW 2014 (12) TMI 728 - MADRAS HIGH COURT held that question of leviability of Education Cess does not arise - In this development of law on the subject issue, the later judgment of Hon ble Madras High Court in case of TENFAC Industries Ltd. stand distinguished. Appeal allowed - decided in favor of assessee.

Summary

Issues involved:
Whether Education cess is payable in case of clearance of imported goods by debiting the duty in DEPB Passbook under Notification No. 45/2002-Cus.

Analysis:

Issue 1: Education Cess on imported goods under DEPB Passbook
The appellant argued that previous judgments favored the assessee, citing cases such as Gujarat Ambuja Exports Ltd. and Commissioner of Customs Vs. Reliance Industries Ltd. The Revenue contended that Education Cess is applicable unless customs duty is fully exempted. The Tribunal noted that similar issues were decided in previous judgments upheld by High Courts and the Supreme Court. The Tribunal referred to the Bombay High Court judgment in Reliance Industries Ltd., stating that Education Cess is in addition to customs duty and should be levied unless duty is fully exempted.

Issue 2: Applicability of Education Cess under Notification No. 45/2002-Cus
The Tribunal considered the argument that Education Cess is not chargeable in case of imports under DEPB under Notification No. 45/2002-Cus based on various judgments, including those from the High Courts of Gujarat and Madras. The Tribunal distinguished the judgment in TANFAC Industries Ltd. based on subsequent developments in the law. Ultimately, the Tribunal concluded that Education Cess is not applicable in cases of import under DEPB under Notification No. 45/2002-Cus.

Final Decision
Based on the analysis of relevant judgments, the Tribunal ruled in favor of the assessee, setting aside the impugned order and allowing the appeal. The judgment clarified that Education Cess is not chargeable in cases of import under DEPB under Notification No. 45/2002-Cus.