Case Law Details
Gemini Edibles and Fats India Pvt. Ltd. Vs Union of India (Madras High Court)
Point for consideration in this writ petition is as to whether the Revenue is justified in debiting the Social Welfare Surcharge (SWS) also from and out of the value of the relevant scrips issued under two schemes viz., MEIS and SEIS, while debiting the customs duty from those two scrips.
SWS is an independent levy imposed and collected under a different enactment viz., the Finance Act, 2018. Notification Nos.24/2015 and 25/2015 specifically entitle the Revenue to debit the duties leviable viz., duty of customs under the First Schedule to the Customs Tariff Act, 1975 and additional duties leviable thereon under Section 3 of the Customs Tariff Act, 1975. Except these two duties, the above exemption notifications do not empower the Revenue to make debit of any other levy or duty or surcharge or cess either under the Customs Act, or under other enactment. It is well settled that the exemption notifications are to be construed strictly. Scope and ambit of exemption notifications cannot be enlarged or extended beyond its intend as specifically spoken to therein. A benefit given in an exemption notification must be confined only with such of those benefits referred to therein in strict sense and not to be extended beyond there is no need to interpret the same. Thus, under the guide of interpreting an exemption notification, a benefit conferred on a person cannot be extended as an “undue benefit”, which he is not entitled to otherwise under the notification. Going by the terms of the above exemption notifications and in view of the fact that levy and collection of Social Welfare Surcharge is an independent levy, that too, under a different enactment viz., the Finance Act, 2018, I am of the view that the respondents/Revenue are not empowered to make the debit of Social Welfare Surcharge, from and out of the value of the scrips apart from making debit of the duties leviable on the subject matter goods.
Exemption granted in respect of a particular excise duty cannot be a bar for determination of yet another duty levied and collected under different enactment, even though such levy and collection was based upon the particular excise duty exempted. The Hon’ble Supreme Court has clearly held that when a particular kind of duty is exempted, other types of duty or cess imposed by legislation for a different purpose cannot be said to have been exempted. Therefore, I am of the firm view that assuming the subject matter exemption notifications grant exemption in respect of the customs duty in toto, the petitioner is not justified in contending that the other duties or levy payable under different enactment are also exempted. In this case, I have already pointed out that exemption granted is against payment of duty in cash and not the liability itself in toto, as such duty is admittedly, debited from the value of the scrips. In other words, the Social Welfare Surcharge being a levy imposed under the Finance Act, 2018 and an independent levy, the petitioner is bound to pay the same. If the liability to pay the customs duty element is discharged by effecting adjustment from the value of the scrips, the liability to pay the Social Welfare Surcharge is also by the petitioner either by way of cash or by other mode, since the scrips cannot be used for discharging such liability. The above three questions thus, are answered accordingly.
In the result, the Writ Petitions are disposed of as follows:
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What if when BCD is adjusted through MEIS/SEIS Scrips and the customs portal automatically debit SWS? No importer pays SWS through any scrip but due to the error in the system of the govt. importers are being served notices to pay SWS along-with interest and ask for the refund of SWS paid/utilized through scrips.