COMMISSIONER OF CUSTOMS Vs. RELIANCE INDUSTRIES LTD.

JUDGEMENT

(1.) Heard both sides. This appeal filed by Revenue involves a small amount of Rs. 42,789/ - (ranging from Rs. 11/ -to Rs. 19,233/ - in respect of the 16 impugned Bs/E) but relates to an important question of law as to whether the newly imposed Education Cess of 2% is leviable on goods cleared under the Duty Entitlement Pass Book (DEPB) Scheme. We are informed by both sides that there is no precedent decision on this issue.

(2.) Chapter VI of the Finance (No. 2) Act, 2004 imposes Education Cess on imported goods @ 2% of duties of customs levied and collected on such goods : - Extract from the Finance (No. 2) Act, 2004 "81. Education Cess. - (1) Without prejudice to the provisions of subsection (11) of Section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for proposes of the Union, a cess to be called the Education Cess, to fulfil the commitment of the Government to provide and finance universalized quality basic education.

(3.) It was clarified by Ministry of Finance D.O.F. No. 334/3/2004 -TRU, dated 8 -7 -2004 and further confirmed under Chief Commissioner of Customs, Mumbai Zone -H's Standing Order No. 39/2004 CCO M -II, dated 3 -8 -2004 that where customs duties are exempted, the Education Cess shall also stand exempted : - Extract from MOF DOF No. 334/3/2004 -TRU, dt. 8 -7 -2004 "Issue No. (2) : Whether goods that are fully exempted from excise duty/customs duty or are cleared without payment of excise duty/customs duty (such as clearance under bond or fulfilment of certain conditions) would be subjected of Cess. Clarification : The Education Cess is leviable at the rate of two per cent of the aggregate of all duties of excise/customs (excluding certain duties of customs like anti -dumping duty, safeguard duty etc.) levied and collected. If goods are fully exempted from excise duty or customs duty, are chargeable to Nil duty or are cleared without payment of duty under specified procedure such as clearance under bond, there is no collection of duty. Thus, no education cess would be leviable on such clearances. In this regard, letter D.O. No. 605/54/2004 -DBK, dated 21st July, 2004 issued by Member (Customs) may also be referred to.