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TMI Blog2023 (9) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... scrip are exempted from payment of customs duty, but to ensure that the incentive is within the permissible limit, the devise of maintaining the records have been prescribed therein. Such maintenance of records is in context with the Foreign Trade Policy, which have to be monitored by the agencies empowered under such policy i.e., the Ministry of Commerce, through the Director General of Foreign Trade. In the present case, it is not in dispute that the licensing authority has raised any objection with regard to non-observance or nonfulfillment of the conditions mentioned in the notification dated 08.04.2015. Thus, it would not be proper on the part of the authorities to say that debit of customs duty in the MEIS scrip would disentitle the imported goods from the claim of the benefit of Zero rate SWS. Since, the effective rate of the customs duty is NIL or Zero , by virtue of the notification dated 08.04.2015, the rate of SWS would automatically become zero , inasmuch as SWS is to be calculated not on the value of the goods, but on the duty of customs levied on the imported goods, which is evident from sub-section (3) of Section 110 of the Finance Act, 2018. The said statue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 08.04.2015 by producing Merchandise Export from India Scheme (MEIS) scrips. The B/Es were assessed by the customs authorities at the port of import, in providing the exemption with regard to the Basic Customs Duty (BCD) as per the said notification. However, the department had assessed Social Welfare Surcharge (SWS) at the rate of 10%. The said assessed amount was paid by the appellant under protest. 2.2 The appellant had assailed the assessments done in the B/Es on the ground that since payment of BCD was exempted in terms of notification dated 08.04.2015, the appellant was not required to pay SWS inasmuch as 10% of zero rated BCD is also zero and cannot be calculated @ 10% on the notional basis amount of Basic Customs Duty, as assessed by the department. 2.3 The appeals filed by the appellant were disposed of by the learned Commissioner (Appeals) vide Order-in-Appeal No. 609 to 663 (Gr.V/VA/VB)/2021(JNCH)/Appeals dated 23.08.2021 (for short, referred to as impugned order ), without extending the benefit of Zero duty SWS to the appellant. In support of denial of such benefit, the learned Commissioner (Appeals) has held that the notification No.24/2015-Cus., has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cannot be considered for deciding the present appeals. 5. Heard both sides and perused the case records. 6. The incidence of levy of customs duty is on importation of goods into India from a place outside India. However, Section 25 of the Customs Act, 1962, has empowered the Central Government for issuance of notification, in exempting the goods either conditionally or unconditionally, subject to the satisfaction that in the public interest, issuance of such exemption notification is necessary/expedient. In exercise of the powers conferred under Section 25 ibid, in this case the Central Government had issued the Notification No.24/2015-Customs dated 08.04.2015, in exempting the goods from payment of Basic Customs Duty, on their importation into India under the duty credit scrip issued by the Regional Authority under the MEIS. Imported goods also attract Social Welfare Surcharge (SWS) in terms of the provisions of Section 110 of the Finance Act, 2018. Sub-section (3) of Section 110 ibid has provided that the SWS shall be calculated at the rate of ten percent on the BCD amount. The appellant did not pay the SWS, in view of the fact the BCD was NIL as per notification dated 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect that, though the goods imported under MEIS scrip are exempted from payment of customs duty, but to ensure that the incentive is within the permissible limit, the devise of maintaining the records have been prescribed therein. Such maintenance of records is in context with the Foreign Trade Policy, which have to be monitored by the agencies empowered under such policy i.e., the Ministry of Commerce, through the Director General of Foreign Trade. In so far as, the Customs Department is concerned, they have only to examine the issue, as to whether the duty of customs is leviable on the importation of goods or are exempted from payment of duty through issuance of the notification(s) by the Central Government. In the present case, since the disputed goods were exempted from payment of duty under Notification dated 08.04.2015 and the licensing authority empowered under the FTP has not questioned achievement of export turnover and availment of the incentives, the same cannot be questioned by the Customs department. To make it more clear, we may clarify that the Customs department s responsibility is only to ensure that the goods sought to be exempted are imported under the MEIS sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal customs duty calculated at tariff rate where applicable aggregate of duties of customs is zero. 10. We find that the ratio of the judgement relied upon by the learned Advocate for the appellant squarely apply to the facts of the present case. In those decided cases, it has been clarified that the amount of SWS payable would be NIL , in the cases, where the aggregate of customs duties is zero , even though SWS has not been specifically exempted through issuance of notification. 11. Reliance placed by learned AR for Revenue on the letter dated 14.11.2022 has no relevance to the case in hand, inasmuch as no clarification was furnished therein with regard to levy of SWS on the imported goods. Rather, the said letter has only referred to the Circular No.2/2020-Customs dated 10.01.2020 issued by CBEC and no clarification with regard to the subject issue was furnished therein. On examination of the said circular dated 10.01.2020, we find that with reference to the judgement of Hon ble Supreme Court in the case of Unicorn Industries (supra), the Board has clarified that SWS cannot be debited through duty credit scrips and therefore has to be paid by the importer in cash. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f SWS to be paid in Rs. Situation Case 1: BCD at 20% adv. SWS at 10% 1,00,00,000 Tariff rate @20% No exemption Rs.20,00,000 10% No exemption Rs.2,00,000 Rs.2,00,000 Situation Case 2: BCD at 10% adv. through exemption under Sec.25(1) of Customs Act, 1962 SWS at 10% 1,00,00,000 Tariff rate @20% Effective rate@10% thro Notification Rs.10,00,000 10% No exemption Rs.1,00,000 Rs.1,00,000 Situation Case 3: BCD wholly exempt through exemption under Sec.25(1) of Customs Act, 1962 SWS at 10% 1,00,00,000 Tariff rate @20% Effective rate @NIL thro Notification NIL/Rs.0 10% No exemption NIL/Rs.0 NIL/Rs.0 Situation Case 4: BCD at 20% adv. SWS wholly exempt through exemption under Sec.25(1) of Customs Act, 1962 read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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