The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Educational Cess (EC) and Social Welfare Surcharge (SWS) were in the nature of surcharge and non-levying of Educational Cess applies to Social Welfare Surcharge on imported goods, allowing the appeal by Enami Agrotech Ltd (the Appellant) against Commissioner of Customs (Port).
The appellant was in the business of refining and selling edible oils and imports Crude Edible Oil from various countries and refines it at their manufacturing facility located at Haldia (West Bengal). During the period April 2020 to September 2020, they filed 160 Bills of Entry for importing 160 consignments of crude palm oil by availing the benefit of Exemption Notification Nos. 24/2015 and 25/2025-Cus issued under MEIS/SEIS Scheme, which was an export promotion scheme in which Basic Customs Duty was specifically exempted, but the appellant was ordered to pay SWS @10% on notional BCD in cash, for clearing these consignments
The counsel who appeared on behalf of the appellant challenged the impugned order on certain grounds. (a) As per f Section 110(3) of the Finance Act, 2018 SWS was to be computed at 10% on the aggregate of duties “levied and collected” under Section 12 of the Customs Act, 1962, and as per the notification, the SWS computed at the rate of 10% on “zero” should also be “zero”. (b) this very issue was decided by the Division Bench of the Bombay High Court in the Appellant’s own case in writ petition no.1447of 2021, wherein the refund was sanctioned and the legal position was reiterated by the Bombay High Court in the case of La Tim Metal & Industries Limited Vs. The Union of India (2022). (c) the counsel submitted that the findings and observations of the Appellate Commissioner were unsustainable and inconsistent and the counter contentions of the Appellant against each of the findings/observations made by the Appellate Commissioner in a tabular form.
The counsel who appeared on behalf of the revenue submitted that Circular No. 2/2020-Cus specifically provides for levy and collection of SWS in case of goods imported against MEIS/SEIS scrips and being specific should prevail over Circular No. 03/2022-Cus and BCD is not generally exempted under Notification No. 24/2015-Cus (Tariff), but paid debit to the MEIS/SEIS Scrips. The counsel also relied on the decision of the Madras High Court in Writ Petition No. 24490 and 27459 in 2019 by Gemini Edibles and Fats India Pvt Ltd. The counsel further submitted that the decision by the Bombay High Court in LA TIM Metals could not prevail over the judgment of the Supreme Court in the Unicorn Industries case.
The two-member bench consisting of P.K Choudhary (Judicial Member) and Rajeev Tandoon (Technical Member) after hearing both sides held that “The decision of the Bombay High Court in the La Tim Metal Case is not only later in time but also takes into consideration the earlier contrary decision of the learned Single judge of the Madras High Court in the Gemini Case (supra) as also the decision of the Supreme Court in the Unicorn Case (supra)” and the appeal was allowed.
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