2015 (8) TMI 455 - HC - Customs

SEZ Units - powers of the customs authorities in valuing and seizing the goods imported by a unit situated in Special Economic Zone Liability to pay custom duty Valuation of goods Goods were meant for SEZ and on going to SEZ, they ought not to be liable for Customs duty - Therefore value of goods meant for SEZ could need not be determined under provisions of Section 14 of Customs Act, 1962 and could not have been confiscated Held that - Observation of the Tribunal in the paragraph 11, 12 and 13 of its order 2013 (9) TMI 424 - CESTAT AHMEDABAD stayted It is, however, clarified that there is no stay against the final direction of the Tribunal reversing the judgment of the Commissioner of Customs, Kandla. Resultantly, the respondent would get the benefit of release of goods as per the final order of the Tribunal. Nevertheless, the declaration of legal position propounded by the Tribunal in the impugned order and noted above shall stand stayed. - Decided partly in favour of Revenue.

Summary

Issues involved:
- Stay of the common judgment and order dated 01.01.2013/12.03.2013 passed by the Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad
- Interpretation of Rule 29 of SEZ Rules, 2006 regarding valuation and seizure of goods imported by a unit in a Special Economic Zone
- Confiscation of goods based on the Commissioner of Customs' assessment exceeding authority

Analysis:
The High Court of Gujarat addressed the issue of seeking a stay on the judgment and order passed by the Customs, Excise & Service Tax Appellate Tribunal. The Tribunal, in its judgment, made significant observations regarding the powers of customs authorities in valuing and seizing goods imported by a unit situated in a Special Economic Zone (SEZ). The Tribunal highlighted the provisions of Rule 29 of SEZ Rules, 2006, emphasizing the requirement for SEZ units to follow specific procedures for clearance of goods. The Tribunal found that the Commissioner of Customs had exceeded authority by assessing the Bill of Entry filed by the appellant-assessee before KASEZ authorities, which was not in line with Rule 29. The Tribunal also emphasized that goods meant for SEZ and not liable to customs duty should not be subject to valuation under the Customs Act, 1962. Citing a previous Tribunal decision, the Tribunal concluded that confiscation of goods as per Letter of Approval (LOA) was incorrect and beyond the adjudicating authority's power.

Furthermore, after considering the arguments presented by the parties, the High Court issued a stay on the observations and declaration of law made by the Tribunal regarding the interpretation of Rule 29 of SEZ Rules, 2006. However, the final direction of the Tribunal, which reversed the judgment of the Commissioner of Customs, Kandla, was not stayed. This meant that the respondent would benefit from the release of goods as per the Tribunal's final order, but the legal position established by the Tribunal in the impugned order was stayed. Consequently, the Civil Applications were disposed of based on the above terms, providing clarity on the interim orders and legal implications arising from the Tribunal's judgment.