Case Law Details
Emami Agrotech Ltd Vs Commr. of Customs (Port) (CESTAT Kolkata)
CESTAT Kolkata held that when the Basic Customs Duty (BCD) is “Nil”, Social Welfare Surcharge (SWS), being computed at the rate of 10% of BCD, will also be “Nil”.
Facts- The Appellant is engaged in the business of refining and selling edible oils. For the said purpose, the Appellant imports Crude Edible Oil from various countries and carries out refining thereof at its manufacturing facility located at Haldia (West Bengal). During the period April 2020 to September 2020, the Appellant filed 160 Bills of Entry for the import of 160 consignments of crude palm oil by availing the benefit of Exemption Notification Nos. 24/2015 – Cus. and 25/2015 – Cus. both dated 08.04.2015 issued under MEIS/SEIS Scheme, which was an export promotion schemes. While Basic Customs Duty stood specifically exempted under these notifications, the Appellant was constraint to pay the Social Welfare Surcharge computed @10% on the notional BCD in cash, for causing clearance of these consignments.
The Appellant was of the view that since BCD was not collected pursuant to the exemption (supra), no liability for SWS could have been determined with reference to the notional BCD. Consequently, the Appellant challenged the assessment of SWS in each of these BOEs by filing as many appeals before the Appellate Commissioner. All these appeals were rejected by the Appellate Commissioner vide the impugned orders, which are the subject matter of challenge in these proceedings.
Conclusion- The CBIC in its later Circular No. 03/2022- dated 01.02.2022 has also clarified the said position that the amount of Social Welfare Surcharge payable would be ‘Nil’ in cases where the aggregate of customs duties (which form the base for computation of SWS) is zero even though SWS has not been exempted.
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