Relief to Tata Motors: CESTAT Rules No Social Welfare Surcharge When Basic Customs Duty is Zero [Read Order]
CESTAT rules in favor of Tata Motors, confirming no Social Welfare Surcharge on imported goods under MEIS when Basic Customs Duty is exempt
![Relief to Tata Motors: CESTAT Rules No Social Welfare Surcharge When Basic Customs Duty is Zero [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/CESTAT-CESTAT-Mumbai-Tata-Motors-tax-relief-Basic-Customs-Duty-TAXSCAN-1.jpg "Relief to Tata Motors: CESTAT Rules No Social Welfare Surcharge When Basic Customs Duty is Zero [Read Order]")
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Social Welfare Surcharge (SWS) is not payable when Basic Customs Duty (BCD) is zero. Tata Motors Ltd., the appellant, had imported goods under the Merchandise Exports from India Scheme (MEIS) and claimed exemption from BCD as per Notification No. 24/2015-Customs dated 08.04.2015. The...
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Social Welfare Surcharge (SWS) is not payable when Basic Customs Duty (BCD) is zero.
Tata Motors Ltd., the appellant, had imported goods under the Merchandise Exports from India Scheme (MEIS) and claimed exemption from BCD as per Notification No. 24/2015-Customs dated 08.04.2015. The Commissioner of Customs (Appeals), Mumbai-II upheld the assessment order, directing Tata Motors to pay SWS separately in cash, even though BCD was fully exempted.
Read More: Trump Hits India with New Reciprocal Tariffs, Effective April 2
Tata Motors paid the SWS under protest and challenged the assessment, arguing that SWS is calculated as a percentage of BCD. Since BCD was nil, SWS should also be nil, in line with the Bombay High Court's ruling in LA TIM Metal & Industries Ltd. v. Union of India (2022). The appellant also relied on CBIC Circular No. 3/2022-Cus. (01.02.2022), which clarified that if aggregate customs duty is zero, the SWS payable should also be nil.
Expert-Led PF & ESIC Course - Enroll Now & Get Certified
The revenue countered that SWS is not explicitly exempted under the law and that even if BCD is paid through duty credit scrips, SWS must still be paid separately in cash. The department’s counsel argued that the exemption under MEIS did not cover SWS and relied on previous assessments where SWS had been collected.
The two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) agreed with Tata Motors, holding that the issue was already settled by the Bombay High Court. The tribunal observed that the customs department's review petition against the High Court ruling had been dismissed, making the matter final and binding.
The tribunal set aside the Commissioner’s order, ruling that SWS cannot be charged when BCD is nil. The tribunal granted the refund of the SWS paid in cash. The appeal was allowed, along with any consequential benefits as per law.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
