Commissioner of Customs Vs C J Shah (CESTAT Mumbai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, heard appeals filed by the Revenue against Orders-in-Original dated 26.02.2020 passed by the Commissioner of Customs (Import), Air Cargo Complex, Sahar, Mumbai. The Adjudicating Authority had relied upon CBIC Circular No. 02/2020-Customs dated 10.01.2020 and held that payments of Education Cess (EC), Secondary & Higher Education Cess (SHEC), and Social Welfare Surcharge (SWS) through debit in Merchandise Exports from India Scheme (MEIS) duty credit scrips constituted valid discharge of duty liability.
The respondent-importers had imported goods and discharged customs duties by utilizing MEIS scrips. During audit, the department observed that SWS from 01.02.2018 onwards at 10% of Basic Customs Duty, and EC at 2% and SHEC at 1% prior to 01.02.2018, were also being paid through MEIS scrips. According to the department, such payments were not permissible under the governing notifications and the Foreign Trade Policy.
Show cause notices were issued to multiple importers under Section 28 read with Section 124 of the Customs Act, 1962, alleging short levy or non-levy of customs duty on account of incorrect discharge of EC, SHEC, and SWS through MEIS duty credit scrips. Differential duty demands, along with interest, were raised against various companies including C.J. Shah, Cadila Healthcare Ltd., Bharat Forge Ltd., Cipla Ltd., Reliance Industries Ltd., Tata Motors Ltd., Lupin Ltd., and others.
