GUJARAT AMBUJA EXPORTS LTD. Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) The petitioners have, in this petition, challenged the legality and validity of circular No.5/2005-Cus. dated 31-1-2005 (hereinafter referred to as 'the impugned circular'). The petitioners have also prayed for quashing demand notices dated 24-3-2005 and 28-3-2005 as at Annexure 'H' collectively issued by the respondents seeking to recover Education Cess from the petitioners on the customs duty payable on the goods imported by the petitioners. The petitioners have further prayed for permanent prohibition against the respondents from charging any amount of Education Cess on the imports made by the petitioners under the Duty Entitlement Passbook Scheme (hereinafter to be referred to as 'the DEPB scheme').

(2.) The petition arises in the following factual background. The petitioner No.1 is a company registered under the Companies Act. The petitioner No.2 is its Chairman and Managing Director. The petitioners are engaged in manufacturing various goods and also exporting such goods to various countries. To encourage exports, the Government of India has been framing several schemes, all in different forms granting duty exemption to the exporters. The petitioners have been availing of the DEPB scheme with respect to which, exemption from payment of import duty is granted at the specified rates for the specified commodities under Notification No.45/2002-Cus. dated 22-4-2002 (hereinafter to be referred to as 'the exemption notification No.45/2002).

(3.) In the Union Budget of the year 2004-05, the Central Government imposed a levy of education cess as surcharge for the purpose of fulfilling the commitment of the Government to provide and finance quality basic education. To collect such cess, provisions were made in the Finance Act, 2004 wherein particularly sections 81 to 85 pertained to education cess.