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TMI Blog2024 (6) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... re, form and appearance to discern the true character and nature of the benefit conferred under each notification - it is necessary for the Courts not to assume that all notifications under Section 25 of the Customs Act would constitute exemption from the levy itself, but, would depend on the substance of the notification. Whether a notification containing a reference only to Section 25(1) of the Customs Act can be understood as granting exemption to other levies such as Education Cess, Secondary and Higher Education Cess, SWS, etc.? - HELD THAT:- There is no doubt that Notification Nos.24 and 25 of 2015 are limited / confined in their operation only to customs duty and cannot be understood as resulting in exemption of SWS, inasmuch as, the notifications do not bear any reference to the provisions providing for the levy of SWS which has been found relevant by the Supreme Court in understanding the legislative intent as to whether the benefit of exemption must be limited / confined to Customs Duty or must be treated as covering other levies as well. What is the effect of debit of duty scrips? viz. , whether it is a mode of payment of duty (or) it is merely procedural and an administ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, Senior Counsel for Mr.Adithya Reddy For the Respondents in both Appeals : Mr.M.Santhanaraman, Senior Standing Counsel for R2, R3 R4 in WA No.831/2020, Ms.Anu Ganesan Junior Panel Counsel for R2 in WA Nos.830 and 831/2020, Dr.G.Babu, CGSC for R1, R3 and R4 in WA No.830 of 2020 COMMON JUDGMENT MOHAMMED SHAFFIQ, J. The present appeals are filed challenging the order of the learned Judge insofar as it finds that the appellant is liable to pay Social Welfare Surcharge (hereinafter referred to as SWS ) and it cannot be discharged by debiting from the MEIS / SEIS Scrips, while directing the appellant to pay SWS either in cash or in any other mode. 2. Brief Facts: 2.1. The appellant is in the business of manufacturing and marketing of edible oils and fats. Importing of goods is part and parcel of the appellant's business activities ordinarily attracting levy of Customs Duties. The appellant procured Merchandise Exports from India Scheme (hereinafter referred to as MEIS ) and Service Exports from India Scheme (hereinafter referred to as SEIS ) Scrips, from various exporters, who had obtained such scrips under Chapter 3 of the Foreign Trade Policy (hereinafter referred to as the FTP ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, offences and penalties shall, as far as may be, apply in relation to the levy and collection of the Social Welfare Surcharge on imported goods as they apply in relation to the levy and collection of duties of customs on such goods under the Customs Act, 1962 or the rules or the regulations, as the case may be. (emphasis supplied) 2.3. During the periods viz., July 2018 July 2019 and February 2018 to July 2019, the appellant imported goods including RBD Palm Oil Edible Grade in bulk at Karaikal and Chennai Ports. The Bills of Entry were assessed and the appellant claimed exemption under Notification Nos. 24 and 25 of 2015 dated 08.04.2015 whereby goods imported against MEIS /SEIS Scrips were exempt from Customs Duties under the First Schedule to the Customs Tariff Act and Additional Duties leviable thereon under Section 3 of the Customs Tariff Act, 1975. SWS was also debited from MEIS / SEIS Scrips by including the same as part of custom duties. 2.4. The methodology adopted by the authorities concerned, after taking one of the Bills of Entry as an illustrative example, is summarized as follows:- i) The assessable value of Bill of Entry No. 3151249 dated 30.05.2019 is Rs. 1,43,58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llected (iii) In the present case, by virtue of operation of Notification No.24/2015-Customs (MEIS) and Notification No.25/2015-Customs (SEIS), both dated 08.04.2015, issued under Section 25 of the Customs Act, 1962, Customs Duty is neither levied nor collected and thus, the pre-requisite viz. , levy and collection of Customs duty being absent, SWS can neither be computed nor levied. 3. Order of the learned Single Judge: a) Notification Nos. 24 and 25 of 2015 dated 08.04.2015 provide exemption from customs duty leviable on the imported goods. However, all they do is exempt the payment of such duty in cash. In other words, the duty is levied and paid by debiting the same from the value of MEIS / SEIS scrips. b) SWS is not in the nature of duties of customs, it is an independent levy imposed and collected under a different enactment. c) The exemption granted under Notification Nos.24 and 25 of 2015 is only in respect of payment of customs duty in cash as evident from the fact that appropriate customs duty is debited from the value of the above scrips. In other words, the above adjustment by debiting the MEIS / SEIS scrips towards the duty leviable and payable is an act of duty neutra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt within a period of four weeks from the date of receipt of a copy of this order. (d) On receipt of such payment, the respondents are directed to recredit the value of the Social Welfare Surcharge so far debited from the scrips held by the petitioner, within a period of two weeks thereafter. 4. Case of the Appellant: a) SWS is calculated at the rate of 10% on the aggregate of custom duties levied and collected. Levy and collection of customs duty is, thus, a precondition for computing and levying SWS. b) Notification Nos.24 and 25 of 2015 exempt goods when imported into India against a duty credit scrip from the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975, and additional duty leviable thereon under Section 3 of the Customs Tariff Act. c) Levy includes declaration of charge / liability and assessment i.e., particularization / computation of the duty that is due. Exemption Notifications ought to be taken into account while making assessment. (See Rayalseema Constructions v. Deputy Commercial Tax Officer, Mannaday Division, Madras, 1 and others [1959 SCC Online Mad 12] , Assistant Collector of Central Excise, Calcutta Division v. National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal duty. g) Reliance was placed on what the appellant referred to as the Doctrine of Source of Power , on the basis of which, it was submitted that in view of the language contained in Section 25(1) of the Customs Act, any notification issued by the Central Government in exercise of its powers under Section 25(1) of the Customs Act would result in exemption from levy (See Union of India v. Modi Rubber [(1986) 4 SCC 66] and Unicorn Industries v. Union of India [(2020) 3 SCC 492] ). h) Incentive schemes under MEIS and SEIS are essentially Duty Foregone by the Government of India and do not form part of the Consolidated Fund of India which would again demonstrate absence of collection. Perusal of the Union Budget, in particular, Receipt Budget, would reveal that incentives granted under the MEIS and SEIS scheme form part of a Duty Foregone , by the Government of India. It is, thus, clear that there is neither any levy nor collection of duty under the Customs Act. There is no concept of deemed collection or payment of tax under the Customs Act (See G.Viswanathan v. Hon'ble Speaker, Tamil Nadu Legislative Assembly, Madras [(1996) 2 SCC 353] ) . i) There was no concept of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional customs duty against the amount debited in the scrips. Thus, on a reading of the Notifications as a whole, it is evident that there is, really speaking, no exemption from customs duty, but, the Notifications only provide for payment of duty by debit of the scrips. e) SWS is computed at 10% of the aggregate of Customs duties levied and collected. Only if the Customs duty is 'zero' without any condition attached to it, SWS would also be 'zero'. In the present case, the Customs Duty is levied and recovered by debit of the MEIS/SEIS scrips issued by the DGFT. The importer is, thus, actually paying the Customs duties not by cash, but, by debiting the scrips. f) Exemptions should be interpreted strictly and any ambiguity must be resolved in favour of the revenue. Reliance was placed on the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Commissioner of Customs, Mumbai v. Dilip Kumar [(2018) 9 SCC 1)] in support thereof. g) The learned counsel for the respondents relied upon Circular No.02/2020-Customs dated 10.01.2020, in particular para 9, wherein it has been clarified as under: 9. In view of above there appears no exemption from SWS in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le thereon . 7.2. A reading of the above provision would show that sub-section (1) of Section 25 of the Customs Act confers power on the Central Government to grant exemption either absolutely or subject to conditions from the whole or any part of duty of customs leviable thereon. Notification Nos.24 and 25 of 2015 grant exemption from the whole of the Customs duty and additional duties of customs leviable under the Customs Tariff Act, subject to condition attached thereto. 7.3. It was submitted by the learned Senior Counsel for the appellant that the very fact that Notification Nos.24 and 25 refer to Section 25 of the Customs Act as the source of their power, would, by itself, show that the benefit granted under the notifications is in the nature of exemption. In other words, any notification issued under Section 25 of the Customs Act can only be in the nature of exemption and no further enquiry is warranted in determining the nature of the benefit. The above contention was sought to be supported by the appellant by placing reliance on what the appellant would refer to as Doctrine of Source of Power . 7.4. To the contrary, it is submitted by the learned counsel for the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 25 of 2015 do not, in substance, provide for an exemption from the levy itself, but, only dispense with the requirement of discharging the liability to pay the customs duty by cash, instead, enables discharging the obligation to pay customs duty by debiting the MEIS / SEIS scrips which, in turn, has money value. 7.8. From the above discussion, we have no doubt in our mind that the contention of the appellant that by mere virtue of reference to Section 25 (1) of the Customs Act, the Notifications must be treated as granting exemption from levy itself is liable to be rejected and we would have to travel beyond the nomenclature, form and appearance to discern the true character and nature of the benefit conferred under each notification. 7.9. Before proceeding further, it may be relevant to refer to the notifications issued under Section 25 of the Customs Act in varying forms and nature viz., a) Absolute exemption from the whole of customs duty i.e., exemption from the levy of Customs duty: Notification No. 14/2024 Customs Date: 12th March, 2024 G.S.R. 180(E). In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lculated at the rate of 30% ad valorem , the following shall be substituted , namely:- from the whole of the duty of Customs leviable thereon under the said First Schedule in respect of goods specified in column (2) of TABLE-I annexed hereto and from so much of the duty of Customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate of 15% ad valorem in respect of goods specified in column (2) of TABLE-II annexed hereto. (emphasis supplied) c) Exemption against duty credit scrips: Notification No. 13/2020 Customs New Delhi, the 14th February, 2020 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the said Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods, when imported into India against a duty credit scrip (hereinafter referred to as the said scrip) issued by the Regional Authority under the Scheme for Rebate of State and Central Taxes and Levies (hereinafter referred to as the RoSCTL scheme) in accordance with paragraph 4.01(c) of the Foreign Trade Policy read with paragraphs 4.95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally / commonly understood. c. Exemption against duty credit scrips. 7.11. While the first category of notifications referred to above results in exemption from the levy, the second category of notifications results in reduction in the rate of tax and the levy continues to operate, while the third category of notifications is grant of exemptions against credit scrips. 7.12. We had referred to the above notifications only to show that the Central Government, in exercise of its powers under Section 25 of the Customs Act, had issued notifications which vary in nature and scope, some of which do not conform as exemption in its classical sense. This would only show, rather, reinforce our view that it is necessary for the Courts not to assume that all notifications under Section 25 of the Customs Act would constitute exemption from the levy itself, but, would depend on the substance of the notification. (b) Whether a notification containing a reference only to Section 25(1) of the Customs Act can be understood as granting exemption to other levies such as Education Cess, Secondary and Higher Education Cess, SWS, etc.? 7.13. The above issue had come up for consideration before the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons relating to other levies in respect of which the exemption was sought to be extended in addition to Rule 8(1) of the Central Excise Rules. It was then held that in the absence of reference to Subsection (4) to Section 32 in the notification, the exemption cannot be construed as covering other levies such as Special Excise Duties. The relevant portion of the judgment is extracted hereunder: 9. ..... Undoubtedly, by reason of sub-section (4) of section 32 of the Finance Act, 1979 and similar provision in the other Finance Acts, rule 8(1) would become applicable empowering the Central Government to grant exemption from payment of special duty of excise, but when the Central Government exercises this power, it would be doing so under rule 8(1) read with sub-section (4) of section 32 or other similar provision. The reference to the source of power in such a case would not be just to rule 8(1), since it does not of its own force and on its own language apply to granting of exemption in respect of special duty of excise, but the reference would have to be to rule 8(1) read with sub-section (4) of section 32 or other similar provision. It is significant to note that during all these ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Central Excises and Salt Act, 1944. ..... 10. We may incidentally mention that in the appeals a question of interpretation was also raised in regard to Notification bearing No. 249/1967 dated November 8, 1967 exempting tyres for tractors from 'so much of the duty leviable thereon under item 16 of the First Schedule to the Central Excises and Salt Act, 1944 as is in excess of 15 per cent.'. The argument of the respondents in the appeals was that the exemption granted under this notification was not limited to the duty of excise payable under the Central Excises and Salt Act, 1944 but it also extended to special duty of excise, additional duty of excise and auxiliary duty of excise leviable under other enactments. This argument plainly runs counter to the very language of this notification. It is obvious that the exemption granted under this notification is in respect of 'so much of the duty leviable thereon under item 16 of the First Schedule to the Central Excises and Salt Act, 1944 as is in excess of 15 per cent.' and these words describing the nature and extent of the exemption on their plain natural construction, clearly indicate that the exemption is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said sections 91 and 94 of the said Finance Act, which is in excess of the amount calculated at the rate of two per cent. of the aggregate of duties of customs which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under section 12 of the said Customs Act, and any sum chargeable on such goods under any other law for the time being in force, in addition to and in the same manner as, a duty of customs, but not including- (i) the additional duty referred to in sub-section (5) of section (3) of the said Customs Tariff Act; (ii) the safeguard duty referred to in sections 8B and 8C of the said Customs Tariff Act; (iii) the anti-dumping duty referred to in section 9A of the said Customs Tariff Act; (iv) the Education Cess on imported goods; and (v) the Secondary and Higher Education Cess leviable on the said goods under clause 126 read with clause 129 of the Finance Bill, 2007, which, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), has the force of law. Notification No. 20/2005-Customs New Delhi, dated the 1st March , 2005 G.S.R. (E).- In exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on being satisfied that it is necessary in the public interest so to do, hereby exempts gold falling under Customs Tariff Heading 7108 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by Reserve Bank of India , from the whole of the duty of customs leviable thereon as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of Agriculture Infrastructure and Development Cess, leaviable under Section 124 of the Finance Act, 2021 (13 of 2021). (emphasis supplied) 7.20. Similarly, whenever the Central Government intended to grant exemption to SWS, the recitals in the notification referred to the provision under the Finance Act provided for such levy. The following illustrative notifications are relevant and thus extracted: Notification No. 34/2022-Customs Dated June 30, 2022 G.S.R. 487(E). In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) read with section 110 of the Finance Act, 2018 (13 of 2018), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under heading 7108 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is ordinarily treated as embraced within that topic in legislative practice and particularly in the legislative practice of the State which has conferred the power. Wallace Bros. Co. Ltd. v. CIT, [AIR 1948 PC 118 : 75 IA 86] Lord Uthwatt observed : 'Where Parliament has conferred a power to legislate on a particular topic it is permissible and important in determining the scope and meaning of the power to have regard to what is ordinarily treated as embraced within that topic in the legislative practice of the United Kingdom. The point of the reference is emphatically not to seek a pattern to which a due exercise of the power must conform. The object is to ascertain the general conception involved in the words in the enabling Act.' 7.22. We see no reason why legislative practice cannot be looked upon as a guide to understand the scope, purport and ambit of a subordinate legislation which is essentially quasi legislative in character. (See Subash Photographics Ors v. Union of India Ors. [(1993) Supp (3) SCC 323] , Chandappa v. Sadruddin Ansari [AIR 1958 Mys 132] , S.K.Dutta, Income Tax Officer v. Lawrence Singh Ingty [(1968) 68 ITR 272] , Association of Natural Gas Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is more rational to accept the aforesaid position as clarified by the Ministry of Finance in the aforesaid circulars. Education cess is on excise duty. It means that those assessees who are required to pay excise duty have to shell out education cess as well. This education cess is introduced by Sections 91 to 93 of the Finance (No. 2) Act, 2004. As per Section 91 thereof, education cess is the surcharge which the assessee is to pay. Section 93 makes it clear that this education cess is payable on excisable goods, i.e., in respect of goods specified in the First Schedule to the Central Excise Tariff Act, 1985. Further, this education cess is to be levied @ 2% and calculated on the aggregate of all duties of excise which are levied and collected by the Central Government under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force. Sub section (3) of Section 93 provides that the provisions of the Central Excise Act, 1944 and the Rules made thereunder, including those related to refunds and duties, etc. shall as far as may be applied in relation to levy and collection of education cess on excisable goods. A conjoint reading of these provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies , supra, was dealing with the question whether a notification granting exemption from Central Excise Duty and Additional Excise Duties would also result in exemption of the other duties, viz ., National Calamity Contingent Duty (NCCD), Education Cess and Higher Education Cess, inasmuch as, according to the appellant, they are also in the nature of excise duty. 7.28. We may note the facts considered by the Supreme Court very briefly. The Central Government, with a view to promote industrial development in the north eastern region, announced fiscal incentives, including total exemption from tax to new industrial units and units undertaking substantial expansion for a period of 10 years from the date of commencement of production vide Office Memorandum dated 24.12.1997. This was followed by notification No. 71 of 2003 dated 09.09.2003 issued by the Central Government, whereby, exemption from payment of duty of excise was granted in respect of goods specified in the notification and cleared from a unit located in the Industrial Growth Centre or specified areas within the State of Sikkim. In terms of the above notification, the manufacturer was required to first utilize the CENVAT c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Auto , supra , while also placing reliance on the circulars dated 10.08.2004 and 08.04.2011 issued by the Central Board of Excise and Customs. 7.31. Against this background, the Apex Court framed the following question: 22. The main question arising for consideration is when 100 per cent exemption had been granted for excise duty for a period of 10 years, whether the exemption notification issued for the state of Sikkim on 9.9.2003 shall be confined to the basic excise duty under the Act of 1944, additional duty under the Act of 1957 and additional duty under the Act of 1978, which were specifically mentioned in the notification issued on 9.9.2003, or it also include cess/duty imposed by Finance Acts of 2001, 2004 and 2007. 7.32. Reliance was placed on the 2 Judge Bench Judgment of the Apex Court in the case of SRD Nutrients , supra , which considered the Finance Act, of 2004 and 2007 by which Education Cess and Secondary and Higher Education Cess were imposed. The Apex Court proceeded to find that Notification No.71 of 2003 dated 09.09.2003 covers excise duty and additional duty of excise under the 1957 and 1978 Acts and cannot be understood as covering / including NCCD, Educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icular Education Cess and Secondary Education Cess provided for computation at the rate of 2% and 1% of the aggregate of all duties of excise. The provisions levying Education Cess and Secondary and Higher Education Cess are extracted below as they would have a material bearing on the issue on hand: 19. ..... 93. Education Cess on Excisable Goods. - (1) The Education Cess levied under Section 81, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two. per cent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue) under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods under the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms officers, is of no avail as such circular has no force of law and cannot be said to be binding on the court. Similarly, the circular issued by the Central Board of Excise and Customs in 2011, is of no avail as it relates to service tax and has no force of law and cannot be said to be binding concerning the interpretation of the provisions by the courts. The reason employed in SRD Nutrients P. Ltd.*** that there was nil excise duty, as such, additional duty cannot be charged, is also equally unacceptable as additional duty can always be determined and merely exemption granted in respect of a particular excise duty, cannot come in the way of determination of yet another duty based thereupon. The proposition urged that simply because one kind of duty is exempted, other kinds of duties automatically fall, cannot be accepted as there is no difficulty in making the computation of additional duties, which are payable under NCCD, education cess, secondary and higher education cess. Moreover, statutory notification must cover specifically the duty exempted. When a particular kind of duty is exempted, other types of duty or cess imposed by different legislation for a different purpose ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs, Cuddalore [2009 (240) ELT 341] , dealt with the question as to whether adjustment of credit granted by the Government on export of goods under the DEPB scheme towards customs duty payable, but for the exemption, is equivalent to payment of duty in cash. This Court referred to a Circular dated 20.07.2007 wherein it was, inter alia, clarified that clearances under the DEPB scheme require debiting from the DEPB scrips. Further, CENVAT credit or duty drawback is available even when the scrip is debited, which would show that the goods are not unconditionally exempt from duty. After referring to the above circular, this Court held that importers who use the DEPB scrip paid duty not by cash but by way of credit and debiting of the scrip is a mode of payment of duty. The relevant portions of the circular and the orders of this Court are extracted hereunder: 3. In brief, the issue involved is, whether the duty paid through debits under DEPB is to be treated as payment of duty of exemption from duty. Hitherto, the stand taken by the Department was that goods cleared through debit under DEPB are exempted goods and accordingly, no CENVAT or draw back was allowed for such payments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed DEPB scrips which allows them specific amounts to be utilised for payment of customs duty. Therefore, the importers, who use DEPB scrips, pay duty not by cash but only by way of credit. This is clear from the judgment of the Supreme Court extracted above. Therefore, the goods cleared under the DEPB Scheme cannot be treated as exempted goods, but they can only be treated to be duty-paid goods and therefore, the interest is payable as per section 61(2) of the Act. The debit of any amount under the DEPB scheme is a mode of payment of duty on the imported goods and cannot be treated as exempted goods, unlike the goods under the DEEC scheme. We are unable to answer the questions raised by the appellant in its favour. Therefore, the civil miscellaneous appeals are dismissed. (emphasis supplied) 7.39. From the above extracts, the following positions emerge viz. , a) The DEPB Scrips allow specific amounts to be utilised for payment of Customs Duty. b) Importers use DEPB scrips to discharge obligation to pay duty not by cash but by way of credit. c) Goods cleared under DEPB cannot be treated as exempted goods but only duty paid goods. d) Debit under the DEPB Scheme is a mode of payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as duty-paid goods. 30. With respect, we are unable to concur with such a view. Firstly, in the said decision, the question of levy of education cess was not involved. More particularly in our view, exemption Notification No. 45/2002 is issued under the exercise of powers under section 25 of the Customs Act, 1962. Such notification grants total exemption from payment of customs duty and additional duty on all goods other than edible oils which are imported under the DEPB Scheme. It is, of course, subject to conditions specified in the notification itself. Such conditions require adjustment of the credit in the DEPB scrip against the customs duty liability. However, such adjustment is only procedural in nature. As noted earlier, paragraph 7.14 of the Export-Import Policy clearly provided that the exporter who does not desire to go through the licensing route would have an optional facility of being governed under the DEPB Scheme. 31. We may note that in cases of the Advance Licence Schemes under which imports are being made and which are exempt from customs duty under various notifications issued by the Central Government under section 25 of the Customs Act, 1962, no educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether goods fully exempt from excise duty or cleared without payment of excise duty / customs duty (such as clearance under bond of fulfillment of certain condition) would be subject to cess, it was held that since Education Cess is to be calculated at a percentage of the duty liability. Thus, when goods are exempt or chargeable to nil duty or cleared without payment of duty under specified procedure such as clearance under bond, question of levy of Education Cess does not arise. The following portions of the order are relevant and extracted hereunder: 3. We have perused the decision of the Mumbai Tribunal. We find that Ministry of Finance clarified in the proceedings dated 8-7-2004 in D.O.F. No. 334/3/2004-TRU on the specific issue as to whether goods that are fully exempted from excise duty/customs duty or are cleared without payment of excise duty/customs duty (such as clearance under bond of fulfilment of certain conditions) would be subjected to Cess. It was stated therein that since education cess has to be calculated at the percentage on the duty liability, when the goods are fully exempted from excise duty or customs duty, are chargeable to Nil duty or are cleared without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the High Court gives a decision on a question of law, it should generally be followed by a co-ordinate Bench of the same High Court. If the co-ordinate Bench in the subsequent case wants the earlier decision to be reconsidered, it should refer the question at issue to a larger Bench. .... 20 (d) The decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its own territorial jurisdiction. It is well-settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgments of one High Court be given the status of a binding precedent so far as other High Courts or courts or Tribunals within their territorial jurisdiction are concerned. Any such attempt will go counter to the very doctrine of stare decisis and also the various decisions of the Supreme Court which have interpreted the scope and ambit thereof. The fact that there is only one decision of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force. A decision should not be treated as given per incuriam, however, simply because of a deficiency of parties or because the Court had not the benefit of the best argument and, as a general rule, the only cases in which decisions should be held to be given per incuriam are those given in ignorance of some inconsistent statute or binding authority. Even if a decision of the Court of Appeal has misinterpreted a previous decision of the House of Lords, the Court of Appeal must follow its previous decision and leave the House of Lords to rectify the mistake . (emphasis supplied) 7.47. Yet another reason why we would think that the decision in DCW , supra , may not have a bearing is in view of the fact that the effect of debiting of scrips was never an issue before the Madras High Court and thus, the decision in DCW , supra , is sub silentio on the above aspect and thus, loses its significance as a binding precedent. It is trite law that a judicial decision is an authority for what it actually decides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to provide rewards to exporters to offset infrastructural inel. ficiencies and associated costs involved and to provide exporters a level playing field. 3.01 Exports from India Schemes There shall be following two schemes for exports of Merchandise and Services respectively: (i) Merchandise Exports from India Scheme (MEIS). (ii) Service Exports from India Scheme (SEIS). 3.02 Nature of Rewards Duty Credit Scrips shall be granted as rewards under MEIS and SEIS. The Duty Credit Scrips and goods imported/domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for: (i) Payment of Customs Duties for import of inputs or goods, except items listed in Appendix 3A. (ii) Payment of excise duties on domestic procurement of inputs or goods, including capital goods as per DoR notification. (iii) Payment of service tax on procurement of services as per DoR notification. (iv) Payment of Customs Duty and fee as per paragraph 3.18 of this Policy. ..... 3.07 Objective Objective of Service Exports from India Scheme (SEIS) is to encourage export of notified Services from India. ..... 3.15 CENVAT / Drawback Additional Customs duty / excise duty / Service Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is liable to be rejected, for, it is inappropriate, rather, illegitimate to enquire into the manner in which funds raised are utilised and the mere fact that it did not go to the Consolidated Fund of India would have no bearing on the validity of the levy. In this regard, it may be relevant to refer to the judgment in Jaora Sugar Mills (P) Ltd. v. State of M.P. [AIR 1966 SC 416] : 17. ..... It will be noticed that the contention raised by Mr Pathak on the basis of Article 266 makes an assumption and that is that the cesses already recovered by the different States will not be transferred to the Consolidated Fund of India, but will remain with the respective States; and that such a position would invalidate the law itself. We are not prepared to accept this argument as well. What happens to the cesses already recovered by the respective States under their invalid laws after the enactment of the impugned Act, is a matter with which we are not concerned in the present proceedings. It is doubtful whether a plea can be raised by a citizen in support of his case that the Central Act is invalid because the moneys raised by it are not dealt with in accordance with the provisions of Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Fund of India is unsustainable and liable to be rejected as lacking merit. We stand fortified by the decision of the Division Bench of this Court in the cases of TANFAC Industries , supra and SPIC Heavy Chemicals Division , supra , wherein, it was held that goods cleared under duty credit scrips cannot be treated as exempted goods but only as duty paid goods. 8. To sum up: a) A Notification, merely by virtue of having been issued under Section 25(1) of the Customs Act, cannot be understood as granting exemption from levy of Customs Duty, instead, one must enquire and find the substance of the notification. b) The subject notifications viz ., Notification Nos.24 and 25 of 2015 cannot be understood as granting exemption from levy of SWS, inasmuch as, the notifications only refer to Section 25(1) and bear no reference to Section 110 of the Finance Act under which SWS is levied. c) The effect of debiting of duty scrips is not administrative, but, is, a mode of payment of duty and thus, the argument that there is neither levy nor collection of customs duty is untenable. d) The fact that duty does not form part of Consolidated Fund of India does not have any bearing on determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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