9911796707
TMI Blog2024 (6) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... rief 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"). The appellant offset Customs Duties, by utilizing such MEIS/ SEIS scrips, in terms of Chapter 3 of the FTP. 2.2. SWS was introduced vide Section 110 of the Finance Act, 2018. SWS was to be levied at the rate of 10% of the "aggregate of duties of customs levied and collected" by the Government under Section 12 of the Customs Act. Section 110 of the Finance Act, which provides for SWS, reads as under: "110. Social Welfare Surcharge on imported goods. (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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 1,43,58,919.73. ii) The rate of Basic Customs Duty (BCD) applicable is at 45%. iii) 45% of Rs. 1,43,58,919.73 comes to Rs. 64,61,513.88. iv) However, instead of debiting Rs. 64,61,513.88 from the scrips of the appellant, the respondents have debited Rs. 71,07,665.30/-. v) The figure of Rs. 71,07,665.30 actually debited by the respondents is not 45% of Rs. 1,43,58,919.73 but at 49.5% of Rs. 1,43,58,919.73, which includes SWS calculated at 10% of aggregate duties of Customs levied and collected i.e. 45% on the assessable value of the goods imported. 2.5. It is stated that the appellant, during the course of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 neutralization and to see that the import duty component is neutralized. To put it more clearly, in effect, though no money representing the duty is physically paid nor goes to the Government exchequer, it is deducted from the value of the scrips, which has money value. The debiting of the scrip amounts to payment of duty. d) Scrips have money value and the act of debiting of the scrips towards Customs duty, in effect, amounts to levy and collection of duty from the importer. It is only that the duty is not paid in cash, instead, it is discharged by utilizing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tobacco Co. of India Ltd. [(1972) 2 SCC 560], Mafatlal Industries Ltd. v. Union of India and others [(1997) 5 SCC 536], Hico Products Ltd. v. CCE [1994 (71) ELT 339 (SC)] and Associated Cements Companies Ltd. v. State of Bihar and Others [(2004) 7 SCC 642]). Thus, Notification Nos.24 and 25 of 2015 dated 08.04.2015 ought to be taken into account / factored while making assessment. As a result, there is exemption from levy of customs duty in terms of the said notifications. d) Notification Nos. 24 and 25 of 2015 dated 08.04.2015 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssentially "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 duty through debit of scrips under the Customs Act until introduction of the Finance Act, 2020. It is only after the introduction of the Finance Act, 2020, that the concept of payment of duty through identified scrips was introduced. Section 51B of the Customs Act, 1962, contemplated that there shall be certain duty scrips notified by the Central Government which may be used towards making payment of duties. 5. Case of the Respondents: a) MEIS and SEIS are export incentives. Under both schemes, duty credit scrips are gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 the FTP and the relevant Customs exemption notifications. Keeping in view the ratio laid down by Hon'ble Supreme Court in judgment dated 6-12-2019 (supra), it is clarified that SWS is not exempted and has to be levied and collected on the imported goods." 6. Discussion and analysis: 6.1. On considering the submissions made by both sides, the following questions of law arise for consideration: a) Whether a notification, only by virtue of having been issued under Section 25(1) of the Customs Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 that mere reference to Section 25(1) of the Customs Act, in the notifications is not conclusive that exemption from levy is granted. Rather, Court must enquire and find the substance of the notifications to understand the scope and the nature of the benefit granted under each notification. 7.5. We agree with the contention of the revenue that while examining the nature and scope of the benefit conferred under a notification issued under Section 25(1) of the Customs Act, one canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (12) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), the Central Government, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umn (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 and 4.96 of the Handbook of Procedures from- (a) the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Customs Tariff Act); and (b) the whole of additional duty leviable thereon under sub sections (1), (3) and (5) of section 3 of the said Customs Tariff Act: Provided that the said scrip, against which goods when im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Court earlier and it was held that exemption under Section 25 of the Customs Act does not extend to other levies, unless reference is made to the provisions of those levies or the other levies are expressly exempt. 7.14. A Larger Bench of 3 Judges of the Apex Court, in Modi Rubber, supra, considered the scope of the expression "Duty of Excise" employed in notifications granting exemption a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eunder: "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 years, whenever exemption is sought to be granted by the Central Government from payment of special duty of excise or additional duty of excise, the recital of the source of power in the notification granting exemption has invariably been to rule 8(1) read with the relevant provision of the statute levying special duty of excise or additional duty of excise, by which the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in respect of duty of excise leviable under the Central Excises and Salt Act, 1944 and does not cover any other kind of duty of excise. No more discussion is necessary in regard to this question beyond merely referring to the language of this notification." (emphasis supplied) 7.17. The above judgment of the Hon'ble Supreme Court was followed by another Bench of 3 Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) read with sections 91 and 94 of the Finance (No.2) Act, 2004 (23 of 2004), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in column (2) of the Table in the notification of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India, from the whole of the Social Welfare Surcharge leviable thereon under the section 110 of the said Finance Act." Notification No. 13/2018-Customs Dated February 2, 2018 "G.S.R. 116(E).- In exercise of the powers conferred by sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. v. Union of India & Others [(2004) 4 SCC 489]. Now, if we apply legislative practice, in particular, as to the manner in which power has been exercised by the Central Government while granting exemption from Customs and also from other allied/incidental levies, it would be clear and beyond t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced 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 provisions would amply demonstrate that education cess as a surcharge is levied @ 2% on the duties of excise, which are payable under the Act. It can, therefore, be clearly inferred that when there is no excise duty payable, as it is exempted, there would not be any education cess as well, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 credit for discharging duty liability on final products and the remaining amount of duty was to be paid through Personal Ledger Account (PLA) or Current Account i.e., in cash. The manufacturer was entitled to claim refund or re-credit of the duties paid in cash. The appellant esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, Education Cess and Higher Education Cess. It was held that in the absence of a notification including such levies, exemption cannot be extended to such other levies. The relevant portion is extracted hereunder : "Notification dated 9-9-2003 issued in the present case makes it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Excise Act, 1944 (1 of 1944) or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cannot be said to have been exempted." (emphasis supplied) 7.35. From the above discussion, there is no doubt in our mind that Notification Nos.24 and 25 of 2015 are limited / confined in their operation only to customs duty and cannot be understoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Para 4.3.5., of the foreign Trade Policy, 2004009 was amended allowing additional Customs duty paid through debit under DEPB to be adjusted as Cenvat credit or duty drawback. The said position was clarified vide Circular No.50/2004-Cus. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment 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 of duty and cannot be treated as grant of exemption from levy. 7.40. A Special Leave Petition was filed against the above order of this Court in TANFAC Industries, supra, before the Supreme Court which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 education cess is demanded by the respondents. In fact, the impugned notification itself is sufficiently clear and records that imports against advanced licences are exempt from all duties of customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 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 payment of duty under specified procedure such as clearance under bond, the question of education cess to be levied does not arise. 4. Having regard to the specific understanding given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 one High Court on a particular point or that a number of different High Courts have taken identical views in that regard is not at all relevant for that purpose. Whatever may be the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 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 and not for what can be read into it by implication or by assigning an assumed intention to the judges, and inferring from it, a proposition of law which the judges have not specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia 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 Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. Basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 XII generally or particularly the provisions of Article 266. We will, however, assume that such a plea can be raised by a citizen for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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 scope and nature of an exemption notification nor would have relevance in determining as to whether there was any levy/ collection of ..... 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