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TMI Blog2024 (11) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... gency duty (NCCD). A finding by the Supreme Court that appeared to be obvious from the beginning was, absence of any notification issued under the legislation or Act providing for the levy and charge for collection of NCCD, being Finance Act, 2001. On behalf of petitioner clear submission is, for furthering challenge in the writ petition reliance is not placed on M/s. Unicorn Industries (supra) nor SRD Nutrients Private Limited [ 2017 (11) TMI 655 - SUPREME COURT] . The challenge mounted is on case that where the charge is on amount of customs duty paid and such duty is exempt, the charge being a percentage of duty paid, must be zero. No duty was paid so there cannot be a percentage of it, to result in any sum payable as SWS. Upon a person obtaining exemption, he cannot be said to be discharging liability to pay duty. There is no fact of collection following the levy. The charging provision by sub-section (3) in section 110 is a percentage of customs duty paid, as collected by the Central Government. The duty paid being zero, collection is zero and percentage of it must also be zero. Our reasoning might appear to be similar to that made by the Supreme Court in SRD Nutrients [supra] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India, reported in 2019 (370) ELT 3. It was said, ratio of the judgment is to be applied to the issue of levy of SWS on imported goods, when the basic customs and additional duty of customs are debited in the scrip. Paragraph 7 from said circular 2/2020-Cus. dated 10th January, 2020 is reproduced below. 7. The ratio of the afore cited judgment is seen to apply to the issue at hand of levy of SWS on imported goods when the Basic Customs Duty and Additional Duties of Customs are debited through duty credit scrips. 5. Mr. Sridharan explained to us working of section 110 and also section 136 in Finance Act, 2001. Section 136 is reproduced below. 136. National Calamity Contingent duty.-(1) In the case of goods specified in the Seventh Schedule, being goods manufactured or produced, there shall be levied and collected for the purposes of the Union, by surcharge, a duty of excise, to be called the National Calamity Contingent duty (hereinafter referred to as the National Calamity duty), at the rates specified in the said Schedule. (2) The National Calamity duty chargeable on the goods specified in the Seventh Schedule shall be in addition to any other duties of excise chargeable on such g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the interpretation of the provisions made by one of the Customs 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 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 Private Limited (supra) 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Customs and others. He submits, the Division Bench differed from similar views taken by the Andhra Pradesh, Gujarat and Bombay High Courts, including earlier view taken by another Division Bench of the same Court in Commissioner of Customs, Tuticorin v. DCW, reported in (2014) 306 ELT 398. 13. He refers us to article 265 in the Constitution. The article is reproduced below. 265. Taxes not to be imposed save by authority of law. No tax shall be levied or collected except by authority of law. ( emphasis supplied ) He submits, word collected used in the article stood interpreted by the Supreme Court in Somaiya Organics v. State of Uttar Pradesh, reported in 2001 (13) E.L.T.3 (S.C.). Mr. Sridharan relies on a passage in paragraph-28, reproduced below. ... ... ... In taxing statute the words levy and collect are not synonymous terms (refer to Assistant Collector of Central Excise, Calcutta Division v. National Tobacco Co. of India Ltd. 1978 (2) E.L.T. (J 416) (S.C.)= (1972) 2 SCC 560 at page 572, while levy would mean the assessment or charging or imposing tax, collect in Article 265 would mean the physical realization of the tax which is levied or imposed. Collection of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Sections 3(1), 3(3) and 3(5) of the Customs Tariff Act, 1975 and fee as per paragraph 3.18 of this Policy. Merchandise Exports from India Scheme (MEIS) (emphasis supplied) He reiterates, no exemption is available to petitioner since levy of SWS is under Finance Act, 2018 and there stood no notification issued under said Act exempting anyone from payment of SWS. Debit in the scrip denotes discharge of the payment. The percentage of the duty discharged is the SWS levied. 16. We understand that petitioner is not claiming exemption. Petitioner s contention is based on section 110 of Finance Act, 2018. Reproduced below are sub-sections (1) and (3) of section 110. 110. (1) There shall be levied and collected, in accordance with the provisions of this Chapter, for the purposes of the Union, a duty of Customs, to be called a Social Welfare Surcharge, on the goods specified in the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act), being the goods imported into India, to fulfil the commitment of the Government to provide and finance education, health and social security. (2) ... ... (3) The Social Welfare Surcharge levied under subsection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision Bench in the Madras High Court on judgment dated 10th May, 2024 (supra). Upon a person obtaining exemption, he cannot be said to be discharging liability to pay duty. There is no fact of collection following the levy. The charging provision by sub-section (3) in section 110 is a percentage of customs duty paid, as collected by the Central Government. The duty paid being zero, collection is zero and percentage of it must also be zero. Our reasoning might appear to be similar to that made by the Supreme Court in SRD Nutrients (supra) but petitioner is not relying on the judgment, understandably so. Petitioner s case is of submitting to provisions in section 110 of Finance Act, 2018, as applicable to it but, working of the charging provision releasing it from paying SWS. Debits in the scrip is for purpose of measure of quantum of exemption utilized under it. 20. Having said that, it appears petitioner has prayed for exemption in its prayer. It is competent for us to mould the prayer. On query made Mr. Sridharan submits, his client protested but the new system in place does not permit registration of any protest. As such, his client was compelled to pay. In the circumstances, pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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