2023 (6) TMI 911 - AT - Customs

Debit of Education Cess and Secondary Higher Education cess through MEIS/SEIS scrips - clarification issued vide Board s Circular No.02/2020-Cus. dated 10.01.2020 - HELD THAT - Payment of Social Welfare Charge through debiting MEIS/ SEIS scrips has been accepted by the learned Commissioner by relying upon the Board s Circular but for Education Cess and Secondary Higher Education Cess it has been held that these are not covered by the aforesaid clarification and have to be paid in cash only, whereas according to learned counsel the Hon ble High Court of Judicature at Madras on identical issue in the matter of M/S. KTV HEALTH FOOD PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS (PREVENTIVE) , TIRUCHIRAPALLI 2021 (10) TMI 119 - MADRAS HIGH COURT while extending the benefit of the Board s clarification dated 10.1.2020 has held that the benefit of the Board s circular cannot be denied to the importer on the ground that Education Cess is different component from BCD. In the aforesaid decision the Hon ble High Court made it clear that benefit of the Board s circular dated 10.1.2020, which permits the payment of basic customs duty or additional customs duty through MEIS scrips by virtue of its clause 11, cannot be denied for education cess or higher and secondary education cess being a different component. The issue involved herein is no more res judicata and in view of clause 11 of the Board s circular dated 10.1.2020, which permits the payment made through debit in duty credit scrips for past cases, there is no justification for insisting in cash payment towards education cess and secondary higher education cess and accordingly the issue is decided in favour of the appellant herein. Appeal allowed.

Summary

Issues Involved:
The issue involved in this case is whether Education Cess and Secondary Higher Education Cess can be debited through MEIS/SEIS scrips in accordance with the clarification issued by the Board's Circular No. 02/2020-Cus. dated 10.01.2020.

Education Cess and Secondary Higher Education Cess Payment:
The appellant imported items for manufacturing and discharged duties including Education Cess and Secondary & Higher Education Cess through duty credit scrips under the MEIS scheme. The revenue contended that the scrips could only be used for Basic Customs Duty (BCD), leading to a show cause notice demanding payment for these cess amounts. The Commissioner confirmed the demand for Education Cess and Secondary & Higher Education Cess, stating that they must be paid in cash, not debited through MEIS/SEIS scrips.

Legal Interpretation and Precedents:
The appellant argued that a High Court decision extended the benefit of the Board's circular to include Education Cess, contrary to the Commissioner's decision. The High Court's ruling emphasized that Education Cess and Secondary & Higher Education Cess are part of customs duty and should be treated as such. The Court held that denial of the circular's benefit for these components was legally untenable. The Commissioner's reliance on older Supreme Court judgments, predating the circular, was deemed irrelevant as the appeal centered on the circular's provisions.

Judgment and Conclusion:
The Tribunal found that the issue was not settled by past decisions and, based on the circular's clause 11, ruled in favor of the appellant. The Tribunal emphasized that past cases could utilize duty credit scrips for Education Cess and Secondary & Higher Education Cess, as permitted by the circular. Consequently, the impugned order was set aside, and the appeal was allowed, granting any necessary relief to the appellant.

(Separate Judgment by Judge AJAY SHARMA, MEMBER (JUDICIAL))

This summary provides a detailed breakdown of the legal judgment, highlighting the issues, arguments, legal interpretations, and the final decision made by the Tribunal in favor of the appellant based on the application of the Board's circular provisions.