Orissa High Court
M/S. Dalmia Cement (Bharat) vs Union Of India And Others .... Opposite ... on 7 October, 2024
Bench: Arindam Sinha, M.S. Sahoo
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.19961 of 2019
M/s. Dalmia Cement (Bharat) .... Petitioner
Limited
Represented By Adv. -
Mr. V. Sridharan, Sr. Advocate
Mr. Shobhit Jain, Advocate
Mr. Rahol Tangri, Advocate
Mr. Mukesh Panda, Advocate
-versus-
Union of India and others .... Opposite Parties
Represented By Adv. -
Mr. T.K. Satapathy,
Senior Standing Counsel
CORAM:
THE HON'BLE MR. JUSTICE ARINDAM SINHA
AND
THE HON'BLE MR. JUSTICE M.S. SAHOO
ORDER
07.10.2024 Order No.
06. 1. Mr. Sridharan, learned senior advocate appears on behalf of petitioner and submits, his client is an importer. It imports petroleum coke required in the manufacture of cement. His client not being an exporter purchased duty credit scrip issued under Merchandise Exports from India Scheme (MEIS). As such his client, in importing the goods, is exempted from the whole of the customs duty leviable thereon. The Page 1 of 4 // 2 // scrip is at annexure-1 and clearly says it was issued in exercise of powers conferred by sub-section (1) of section 25, Customs Act, 1962.
2. In obtaining said goods by import petitioner used the scrip. There were difficulties faced and it made representation dated 27th May, 2019. The difficulties arose because of additional levy called Social Welfare Surcharge (SWS), an additional duty levied by section 110 in Finance Act, 2018.
3. Drawing attention to cause of the difficulties he refers to circular dated 10th January, 2020 issued by Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs. He points out from the circular, revenue relies on judgment of the Supreme Court in M/s. Unicorn Industries v. Union of India, reported in 2019 (370) ELT 3. It was said, ratio of the judgment is to be applied to the issue of levy of SWS on imported goods, though earlier the basic customs and additional duty of customs were debited in the scrip.
4. Mr. Sridharan explains to us working of section 110 and also section 136 in Finance Act, 2001. Section 136 is reproduced below.
"136. National Calamity Contingent duty.-(1) In the case of goods specified in the Seventh Schedule, being goods manufactured or produced, there shall be levied and collected for the purposes of the Union, by surcharge, a Page 2 of 4 // 3 // duty of excise, to be called the National Calamity Contingent duty (hereinafter referred to as the National Calamity duty), at the rates specified in the said Schedule.
(2) The National Calamity duty chargeable on the goods specified in the Seventh Schedule shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force.
(3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty, shall, as far as may be, apply in relation to the levy and collection of the National calamity duty leviable under this section in respect of the goods specified in the Seventh Schedule as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be
5. He then draws attention to M/s. Unicorn Industries (supra), inter alia, paragraph 40. We reproduce below a passage from the paragraph.
"40. ... ... ... The provisions of Act of 1944 and the Rules made thereunder shall be applicable to refund, and the exemption is only a reference to the source of power to exempt the NCCD, education cess, secondary and higher education cess. A notification has to be issued for Page 3 of 4 // 4 // providing exemption under the said source of power. In the absence of a notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted. ... ... ..."
6. He then takes us back to sub-section (3) in section 136. He lays emphasis that the mechanism is by provision in Central Excise Act, 1944 and the rules made thereunder. The additional duty of NCCD is leviable in respect of goods specified in the seventh schedule as they apply in relation of levy and collection of duty of excise. According to him, therefore, it is a charge on value of the specified goods. In the case of his client, it is exempt from paying customs duty. The SWS is a percentage of the customs duty. Customs duty being zero, levy of SWS must also be zero.
7. Mr. Satapathy, learned advocate, Senior Standing Counsel appears on behalf of revenue. He will be heard on adjourned date.
8. List on 29th October, 2024, marked at 2:00 P.M. (Arindam Sinha) Judge Signature Not Verified Digitally Signed (M.S. Sahoo) Signed by: JYOTIPRAVA BHOL Reason: Authentication Judge Location: HIGH COURT OF ORISSA Date: 08-Oct-2024 10:40:59 Jyoti Page 4 of 4