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The Commissioner of Customs (Export) Versus M/s. Reliance Industries Ltd.

2015 (9) TMI 399 - BOMBAY HIGH COURT

Levy of Education-cess – Exemption of duty under Notification No.45/02/Customs – Respondent-assessee filed about 16 bills of entries and claimed benefit of Notification No.45/02/Customs – On finalization of assessment, benefit of notification was extended to all bills of entries, exempting duties leviable subject to conditions that duties leviable were debited from relevant pass book under scheme known as DEPB scheme – Education cess at 2% on these duties was also debited from duties of DEPB as .....

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icy adopted by Government of India – Education cess on imported goods shall be in addition to any other duties of customs chargeable on such goods under Customs Act, 1962 or any other law for the time being in force – As per view taken by Gujarat high court in case of Gujarat Ambuja Exports Ltd. [2012 (7) TMI 679 - GUJARAT HIGH COURT] if customs duty is exempted in favour of assesse, then education cess on imported goods is also not to be levied and collected – Following High Court Gujarat Judgm .....

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he order dated 6 December 2004, that was delivered by the Commissioner of Customs (Appeal) Mumbai. 3) This appeal has been admitted on the following substantial questions of law. (a) Whether the CESTAT is vested with powers or has jurisdiction to hold and declare that notification/circulars issued by the Board are inconsistent to legislature? (b) Whether Education Cess is leviable on imports made under DEPB Scheme as per Finance (No.2) of 2004 read with Board's Circular NO.5/2005 dated 312/1 .....

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ect to the conditions that the duties leviable were debited from the relevant pass book under a scheme known as DEPB scheme. The education cess at 2% on these duties was also debited from the duties of DEPB as per clause of the Finance Bill 2004. 6) The respondent protested against the debit of education cess by submitting various letters addressed to the Assistant Commissioner of Customs. They did not insist on issuance of show cause notice. However, they did not get satisfactory solution and t .....

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e find that the DEPB Scheme operates under an exemption notification No.45/2002 Customs dated 22 April 2002. The said notification specifically exempts goods imported under DEPB scheme from basic, additional and special additional duties of customs. However, in terms of the conditions specified in the said notification, the exemption operates by allowing duty credit in the Duty Entitlement Pass Book on exports at the rate specified and subsequently by debiting an amount equal to duty payable, ag .....

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find that the provisions in the said Finance Act specify the Education Cess as 2% of the customs duty levied and collected. In the case of imports under the DEPB scheme, which are fully exempt, the customs duty is nil. Hence, the education cess being 2% of the customs duty is also nil. If it were the intention of the Parliament to debit and credit education cess for imports under DEPB scheme, then the quantum of cess would have been specified in absolute terms with a notification similar to Noti .....

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2004 read with Notification No.45/2002-Customs dated 22 April 2002.The revenue appeal is, therefore, rejected. 9) It is the correctness of this view of the Tribunal which is challenged before us. Mr. A.S. Rao appearing on behalf of the revenue submits that merely because there is a scheme and an exemption is granted that does not wipe out the duties. The customs duty is leviable and recoverable. In the light of the exemption it cannot be said that these duties are not legally recoverable. There .....

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Commissioner of Customs vs. Pasupati Acrylon Ltd. 2013 (296) E.L.T. 182 (Guj.) He submits that the view taken by Gujarat High Court in Pasupati (supra) has been not interfered with by the Hon'ble Supreme Court and the revenue's appeal is dismissed on 8 May 2013. 11) The Tribunal's view is endorsed not only by the High Court of Gujarat but equally by the High Court of Madras in Commissioner of Customs, Tuticorin vs. DCW Ltd. 2014(306) E.L.T. 398 (Mad.) and the High Court of Andhara Pr .....

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