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TMI Blog2024 (2) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was not required to be worked out on the basis of a Nil Excise Duty which in that case was specifically exempted for Area Based Exemption Notification. However, in the instant case as has been upheld in the matter in their own case LOUIS DREFUS COMPANY INDIA P LTD VERSUS COMMISSIONER OF CUSTOMS (IMPORT II) , MUMBAI [ 2023 (11) TMI 972 - CESTAT MUMBAI] which followed decision of LA TIM METAL INDUSTRIES LIMITED VERSUS THE UNION OF INDIA AND ORS. [ 2022 (11) TMI 1099 - BOMBAY HIGH COURT] , it has been held that when cess as in this case was collected as percentage of duty liability and which is exempted under any notification the cess could not be computed in the face of Zero duty liability. We have agreed with the proposition that the Cess based on Nil total duty has to be Nil if machinery provision are clothed in such language and do not make levy an independent ad velorem duty. But same needs to be examined in detail to the specifics of the case including for C.V.D/ I.G.S.T component, if any during impugned period and language of the statutory provision relied upon by the appellant. Same therefore is remanded back. Other question relating to limitation and penalty shall be decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Union of India - 2022 (11) TMI 1099. Relevant portion of the above Order is reproduced herein below: In terms of the decision of Hon'ble High Court of Bombay in re LA Tim Metal Industries Limited, it would appear that the proposal for recovery itself was flawed inasmuch as any cess collectible as percentage of duty liability, and which is exempted thereof under any notification, could not be computed in the absence of any duty liability. It is also on record that circular no. 3/2022 dated 1st February 2022 of Central Broad of Indirect Taxes Customs (CBIC) relates to 'social welfare surcharge' and it is quite likely that lack of specific reference to this surcharge precluded acceptance of the submission in the impugned order. 2.1 It is further submitted that in respect of demand of EC and SHEC in identical facts and circumstances, in a recent judgment in the case of CJ Shah Co. vs. Commissioner of Customs, Mumbai, vide, Final Order No. A/85315-85316/2023, Hon'ble CESTAT, Mumbai set aside the demand of EC/SHEC. In this decision, reliance was placed upon the judgment of Hon'ble Madras High Court in the case of KTV Health Food Pvt. Ltd. vs. Commissioner of Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable at 7.5% on the goods imported and the same was paid/debited by using the Merchandise Export from India Scheme (MEIS) Scrips issued under Notification No.24/2015-Customs dated 08.04.2015. In response Mr. Shah relied upon General Exemption No.162 by which the Central Government, exercising its powers under Section 25 of the Customs Act, has exempted goods when imported into India against duty credit scrip from the whole of the customs duty leviable thereon and the whole of the additional duty leviable thereon under the Customs Tariff Act. The fact that the goods imported under the concerned Bill of Entry has been cleared with Nil BCD is not disputed. 8. Therefore, in our view if the SWS is payable at 10% on BCD but where the BCD is Nil, SWS shall also be computed Nil. ...(Emphasis Supplied) 3. In the present case, as is evident from the bill of entry the amount of BCD levied and collected 'ZERO' by virtue of the exemption governing the duty free scrips. Since the BCD levied and collected is ZERO, the other duties viz., EC, SHEC and SWS levied and collected as a per centage of the BCD, should have also been ZERO or 'Nil'. 4. In fact, in the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption from all duties and debits the amount equal to all the duties payable. Further none of the situations mentioned in Section 114AA exists in the present case. 6. The scrips were valid for import and had adequate credit left to cover the imports. Hence, Section 114AA is not at all invokable. Section 114AA was introduced by the Taxation Laws (Amendment) Act, 2006 with effect from 13.07.2006. Further, as per the 27th Report of the Standing Committee of Finance (2005-06) on whose recommendation this Section was introduced, applies to fraudulent export transactions only as has also been held in the case of Interglobe Aviation Ltd. vs. Principal Commissioner of Customs, Bangalore, 2022 (379) ELT 235 (Tri-Bang.) 7. Learned AR on the other hand relies upon the Order-in-Original seeking to justify various demands on the ground that payment through MEIS (Merchandise Exports from India Scheme) scrips and SEIS (Service Exports from India Scheme) scrips was not allowed the same was required to be paid in cash in respect of Education Cess(EC) and Secondary and Higher Education Cess (SHES) etc. He relies upon the decision in the matter of 2020 (1) TMI 2012 MADRA HIGH COURT in the case of GEMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re LA Tim Metal Industries Limited, it would appear that the proposal for recovery itself was flawed inasmuch as any cess collectible as percentage of duty liability, and which is exempted thereof under any notification, could not be computed in the absence of any duty liability. It is also on record that circular no. 3/2022 dated 1st February 2022 of Central Broad of Indirect Taxes Customs (CBIC) relates to 'social welfare surcharge' and it is quite likely that lack of specific reference to this surcharge precluded acceptance of the submission in the impugned order. The Hon'ble High Court of Madras in KTV Health Food P Ltd v. Commissioner of Customs (Preventive), Tiruchirappalli [2021 (10) TMI 119 - MADRAS HIGH COURT] had held that 25. When that being the statutory declaration made by the Act of Parliament ie., The Finance Act, 2004 and 2007, we cannot have any different view to state that there were different components. What is the duty to be imposed on the imported goods first be calculated and accordingly, 2% of education Cess and 1% of secondary and higher education cess shall be levied and imposed. Hence, when the importer pay-the duty, he shall also pay the cess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orn Ltd. (cited supra) and therefore did not examine the proposition of Nil total customs duty will mean Nil cess in relation to relevant notification as taken, as a ground by the appellant. We have agreed with the proposition that the Cess based on Nil total duty has to be Nil if machinery provision are clothed in such language and do not make levy an independent ad velorem duty. But same needs to be examined in detail to the specifics of the case including for C.V.D/ I.G.S.T component, if any during impugned period and language of the statutory provision relied upon by the appellant. Same therefore is remanded back. Learned Commissioner will need to thoroughly consider on remand the aspect of cess coming into play only if aggregate of customs duty is not Nil as is the requirement of statutory provision. Other question relating to limitation and penalty shall be decided accordingly, considering quantum, legality of issues and malicious intention objectively. 9. Appeal of LOUIS DREYFUS COMPANY INDIA PVT LTD allowed by remand. 10. However, as far as penalty under Section 117 on appellant M/s. NARENDRA FORWARDERS P LTD is concerned. It is noted that breach of sub-regulation of Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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