2024-VIL-203-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Import of crude edible oil availing exemption of BCD under Notification No. 24/2015-Cus & 25/2015-Cus, issued under the MEIS/SEIS Scheme - 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 dt.08.04.2015 for the goods imported under Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) – HELD - The exemption Notification Nos. 24/2015 & 25/2015 have been issued in exercise of power to grant exemption under Sec 25 of the Customs Act whereby BCD stands exempted subject to condition of debit to the MEIS/SEIZ scrips, as the case may be. Thus, 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 under Sec 12 of the Customs Act - in the instant case, admittedly, the aggregate of duties/taxes and cesses collected is nil, thus, the SWS as well be nil. 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 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, is not in consonance with the method of calculation of SWS provided in Sec 110(3) of the Finance Act 2018 - 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 – when 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 – the impugned orders are set aside and appeal is allowed
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