THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA CENTRAL EXCISE APPEAL No.53 of 2011 March 31, 2011 Between: The Commissioner of Central Excise, Visakhapatnam-II Commissionerate, Port Area, Visakhapatnam – 530 035. … Appellant And M/s.Kedia Overseas Ltd., represented by its Managing Director, Hyderabad ... Respondents THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE B.N.RAO NALLA CENTRAL EXCISE APPEAL No.53 of 2011 JUDGMENT: (Per Hon’ble Sri Justice V.V.S.Rao) The Commissioner of Central Excise, Visakhapatnam–II Commissionerate, filed this appeal under Section 130 of Customs Act, 1962, feeling aggrieved by the Final Order No.1347/2007 dated 28.11.2007 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench at Bengaluru. The respondent is importer of edible refined oil. They imported crude palm oil through their agents, M/s.D.S.Narayana & Co. Pvt. Ltd., Kakinada under various bills of entry. The customs duty payable was discharged through Duty Entitlement Pass Book (DEPB) scrips under Notification No.45/2002-Cus, dated 22.4.2002. The provisional assessments were finalized by discharging the duty through a debit made in DEPB. However, education cess @ 2% on the customs duty was charged and collected by the Revenue. On a request made by the respondent the assessment was finalized, but their plea for non- charging of education cess on the payments/debits made through DEPB was not accepted purporting to place reliance on the Central Board for Excise & Custom’s Circular No.5/005-Cus, dated 31.1.2005. Aggrieved by the final assessment vide letter dated 03.3.2006 of the Superintendent, Kakinada the respondent filed an appeal. The same was dismissed by Order-in-Appeal, dated 10.8.2007. The respondent then moved the CESTAT. Relying on its decision in Ruchi Health Foods Ltd v CC, Cochin[1] and the decision of the CESTAT, Mumbai in CC (Exports), CC, Mumbai v Reliance Industries Ltd[2], the CESTAT allowed the appeal holding that education cess is not leviable in respect of duty free import under DEPB scheme. The Senior Standing Counsel for Central Excise submits that the exemption available under DEPB scheme is not an unconditional exemption. It is available only when the merits imports are made under normal course and the duty is debited from the credit available in DEPB scrips. While doing so, an importer is entitled to claim the benefit only with regard to basic customs duty and not the education cess. He would rely on the circular of the CBEC dated 31.3.2005. A copy of the notification No.45/2002 issued under Section 25(1) of the Customs Act, 1962 is placed before us. Under the said notification the whole of the duty of Customs leviable, the whole of the additional duty leviable under Section 3 of the Customs Tariff Act, 1975 and the whole of the special additional duty of Customs leviable under Section 3A of the Customs Tariff Act are exempted from duty. The availment of exemption is subject to inter alia the following conditions: (i) the importer has been issued DEPB in terms of paragraph 4.3 of the Export and Import Policy; (ii) the importer has been permitted credit entries in the said DEPB by the Licensing Authority at the rates notified by the Government of India; and (iii) the DEPB is produced before the proper officer of Customs for debit of the duties leviable on the goods but for exemption contained therein. The only disability is when there is no sufficient credit in the DEPB for debiting the duty leviable on the goods. A reading of the notification No.45/2002 would show that the intention of the Government is to exempt the whole of the duty, additional duty and special additional duty. It is, therefore, not possible to read any further restriction as to levy of education cess in respect of duty free imports under DEPB scheme. Further there is no dispute that the ruling of South Zone Bench of CESTAT in Ruchi Health Foods Ltd and that of the Mumbai Bench in Reliance Industries Ltd have become final and the Revenue has not challenged the same. Therefore, this appeal is misconceived. The appeal, for the above reasons, is dismissed. _______________ (V.V.S.RAO, J) ___________________ (B.N.RAO NALLA) March 31, 2011 YS [1] 2007 (81) RLT 309 (CESTAT-Ban) [2] 2005 (71) RLT 681 (CESTAT-Mum)