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2024 (3) TMI 86 - CESTAT HYDERABADImports crude edible oil - crude palm oil - Whether Social Welfare Surcharge (SWS) is leviable when the Basic Customs Duty (BCD) is exempted in terms of Notification No. 24/2015-Cus & 25/2015-Cus, issued in terms of sub-section (1) of Sec 25 of the Customs Act, 1962, for the goods imported under Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS)? - HELD THAT:- It is not in dispute that the Appellant had imported goods by availing benefit of exemption Notification Nos. 24/2015 & 25/2015 and were allowed the exemption from BCD on finding that the Appellant fulfilled the conditions thereunder. The aforementioned notifications have been issued in exercise of power to grant exemption u/s 25 of the Customs Act. BCD stands exempted subject to condition, inter alia, of debit to the MEIS/SEIZ scrips (as the case may be) of the BCD leviable on the goods, but for the exemption. Thus, we find that there is no actual collection of BCD in view of the exemption. As per Sec 110(3) of the Finance Act 2018, SWS leviable under sub-sec (1) has to be calculated @10% on the aggregate of duties/taxes and cesses, which are levied and collected u/s 12 of the Customs Act. Thus, in the instant case, admittedly, the aggregate of duties/taxes and cesses collected is nil, as is evident from the perusal of the Bills of Entry. Thus, we hold that SWS will be nil, as anything multiplied with zero is also zero. There is no specific provision made under Statute for calculation of SWS on notional BCD, when the actual BCD is exempted subject to fulfilment of stipulated conditions of the notification. The contention of Revenue is that debit of BCD to the scrip under the said notifications is an alternate method of payment and not an exemption, per se, so as to justify the computation of SWS on notional BCD. We find that such contention of Revenue is not in consonance with the method of calculation of SWS provided in Sec 110(3) of the Finance Act 2018. The Hon’ble Apex Court in Somaiya Organics [2001 (4) TMI 84 - SUPREME COURT], has held categorically that the expression ‘collection’ in the context of tax laws would mean physical realization of tax, whereas, in the instant case, the Commissioner (Appeals) has himself accepted in the Impugned Order that no money representing BCD goes to the exchequer under the said notifications. Meaning, thereby, that the context of physical realization of tax is clearly not met and the debit of BCD to the scrip is at best a notional collection of tax, when the said notifications are read in entirety. Had the debit to scrip been equivalent to cash payment or any other admissible mode of payment, there was no need to grant any exemption as duty levied would have been discharged in full using such scrips. The statutory provision is quite clear that power to exempt any duty of Customs is within section 25 only and thus, once BCD is exempted in terms of notification issued under Sec 25, it would tantamount to exemption from duty and no other interpretation is possible. We further find that the ruling of the Hon’ble Bombay High Court in the case of La Tim Metal & Industries [2022 (11) TMI 1099 - BOMBAY HIGH COURT] is directly on the same issue of levy of SWS, where BCD is nil and duty paid/debited using MEIS scrip. We also find that in Appellant’s own case, having similar facts, the coordinate Bench has also taken similar view. Hence, we find that goods imported under aforesaid notifications were exempted from BCD and Additional duty of Customs in full and there was no liability to pay BCD by the importer. This fact is an admitted fact. Further, the leviability of SWS is based on levy and collection of BCD, which itself is exempted. There cannot be any collection of SWS on such goods cleared under the aforesaid exemption notifications. Thus, we allow all the Appeals and set aside the Impugned Orders. The Appellant shall be entitled to consequential benefits, including refund of SWS paid with interest, as per law.
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