Bombay High Court
La Tim Metal And Industries Limited vs The Union Of India Thr. Sec. Ministry Of ... on 15 November, 2022
Author: K.R. Shriram
Bench: K.R. Shriram
1/7 915-WP-12183-2022.doc
Digitally
signed by IN THE HIGH COURT OF JUDICATURE AT BOMBAY
PURTI
PURTI PRASAD
PRASAD PARAB CIVIL APPELLATE JURISDICTION
PARAB Date:
2022.11.21
14:43:13
+0530
WRIT PETITION NO. 12183 OF 2022
LA TIM Metal & Industries Limited ....Petitioner
V/s.
The Union of India and Ors. ...Respondents
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Mr. Prakash Shah i/b PDS Legal for Petitioner.
Mr. Jitendra B. Mishra a/w Mr. D.B. Deshmukh for Respondents.
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CORAM : K.R. SHRIRAM &
ARIF S. DOCTOR, JJ.
DATED : 15th NOVEMBER 2022 P.C. :
1. Prayers in the petition reads as under :
a. that this Hon'ble Court be pleased to issue Writ of Prohibition or any other appropriate writ, order or directions under Article 226 of Constitution of India prohibiting the Respondents from any manner collecting the notional Social Welfare Surcharge on the goods cleared without payment of Basic Customs Duty and Additional Duty Customs under Notification No.24/2015 - Customs dated 08.04.2015 as amended;
b. that this Hon'ble Court may be pleased to issue Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India ordering and directing Respondents by themselves, their subordinates, servants and agents to forthwith:
i. re-assess the Bills of Entry detailed in Exhibit hereto and assessed the SWS as nil in compliance of the Circular No. 3/2022-Customs dated 1 st February, 2022;
ii. refrain from collecting notional SWS on the goods cleared without payment of Basic Customs Duty and Additional Duty Customs under Notification No.24/ 2015-Customs dated 08.04.2015 as amended;
Purti Parab
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iii. Refund INR. 22,56,650.80/- collected in the guise of notional Social Welfare Surcharge on the goods imported by the Petitioner without payment of Basic Customs Duty and Additional Duty Customs under Notification No.24/2015-Customs dated 08.04.2015 as amended; and iv. make necessary changes to the ICEGATE portal to ensure that no notional Social Welfare Surcharge is assessed on the goods assessed without payment of Basic Customs Duty and Additional Duty Customs under Notification No.24/2015-Customs dated 08.04.2015 as amended.
2. Petitioner is a trader engaged in trading of colour coated coils and profile sheets. Petitioner filed Bill of Entry No.6532249 dated 18 th January 2020 and Bill of Entry No. 2485287 dated 17 th September 2022. Petitioner thereafter also filed 12 other Bills of Entry referred to in paragraph no.9 of the petition. It is petitioner's case that in each of the Bill of Entry, petitioner claimed and was allowed exemption under Notification No. 24/2015-Customs dated 08.04.2015. The proper officer assessed zero/nil Basic Customs Duty (BCD) and Additional Customs Duty (ACD). The proper officer, however, notionally assessed SWS, i.e., Social Welfare Surcharge and collected amount in cash from petitioner.
3. Petitioner states that with respect to the recent Bill of Entry No.2485287 dated 17th September 2022, respondents have assessed the Bill of Entry and the proper officer has assessed BCD and ACD at zero/nil. The proper officer, however, notionally assessed SWS at 10% of the BCD. It is Purti Parab 3/7 915-WP-12183-2022.doc not in dispute that SWS is levied and calculated at 10% of the BCD. It is petitioner's case that if the BCD is Nil whatever may be the percentage of SWS, the amount will also be Nil because anything multiplied by zero is zero. Mr. Shah submitted that this has been confirmed in Circular No.3/2022-Customs dated 1st February 2022 issued by the Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India. Mr. Shah submitted that in an identical matter of the same petitioner being Writ Petition No. 8677 of 2019 this court in order dated 10th August 2022 after considering Notification dated 1st February 2022 has held that there was no SWS payable.
4. Mr. Mishra submitted that in the Bill of Entry itself it is mentioned that the Basic Customs Duty on the goods imported was 7.5%. Mr.Mishra also submitted that the Madras High Court in the matter of M/s.Gemini Edibles and Fats India Pvt. Ltd. vs. Union of India and Ors. 1 has held that appropriate SWS on BCD was payable. Mr. Mishra also submitted that the Madras High Court has relied upon the judgment of the Hon'ble Apex Court in Unicorn Industries vs. Union of India2 where also the court had held that SWS was payable.
5. In rejoinder, Mr. Shah submitted that in Unicorn Industries (supra) the excise duty recovered under diverse names/nomenclature and 1 Writ Petition No. 24490 and 27452 of 2019 dated 03.01.2020 2 2019 (370) E.L.T. 3 (S.C.) Purti Parab 4/7 915-WP-12183-2022.doc rates were on the value of the goods and not on the BCD. Mr. Shah submitted that if the SWS was on diverse names or value of the goods petitioner will have no case. But since SWS is directly linked to BCD anything multiplied with zero is zero.
6. Mr. Mishra also relied upon the Circular dated 10th January 2020. Mr. Shah submitted and rightly says after those judgments and the circular relied upon by Mr. Mishra the Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India had issued Circular dated 1st February 2022 where it has clarified that where the SWS applied is at percentage of the aggregate of customs duty payable on import of goods and not on the value of imported goods, the SWS shall be computed on the percentage of value equal to Nil (as aggregate amount of customs duty payable is zero). For ease of reference, the Circular dated 1 st February 2022 is scanned and reproduced herein below :-
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7. Mr. Mishra also submitted that petitioner's claim about assessment and recovery of amounts in the guise of Social Welfare Surcharge on the goods cleared without payment of BCD is factually incorrect as BCD was chargeable at 7.5% on the goods imported and the same was paid/debited by using the Merchandise Export from India Scheme (MEIS) Scrips issued under Notification No.24/2015-Customs dated Purti Parab 7/7 915-WP-12183-2022.doc 08.04.2015. In response Mr. Shah relied upon General Exemption No.162 by which the Central Government, exercising its powers under Section 25 of the Customs Act, has exempted goods when imported into India against duty credit scrip from the whole of the customs duty leviable thereon and the whole of the additional duty leviable thereon under the Customs Tariff Act. The fact that the goods imported under the concerned Bill of Entry has been cleared with Nil BCD is not disputed.
8. Therefore, in our view if the SWS is payable at 10% on BCD but where the BCD is Nil, SWS shall also be computed Nil.
9. Respondents are directed to re-credit the refund of Notional Social Welfare Surcharge in the duty credit scrips in the goods imported by petitioner within 8 weeks from the date of receipt of copy of this order.
10. Petition accordingly stands disposed.
(ARIF S. DOCTOR, J.) (K.R. SHRIRAM, J.) Purti Parab