2023 (11) TMI 1176 - AT - Customs

Exemption from Levy of Customs Duty - goods removed from SEZ to DTA (initially procured from DTA) are chargeable to customs duties in terms of section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006 or not - re-import of goods - DTA unit has already claimed export benefits - HELD THAT - The provisions of section 30 of the SEZ Act permits DTA clearances by a SEZ unit on certain conditions and that is goods to be removed from SEZ to DTA would be chargeable to duties of customs etc. It is a settled principle of law that once the provisions of an enactment are simple and there is no ambiguity there is no scope for interpretation. A three Judge Bench of the Apex Court in KALYAN ROLLER FLOUR MILLS (P) LTD. VERSUS COMMISSIONER OF COMMERCIAL TAXES, ANDHRA PRADESH 2014 (1) TMI 1802 - SUPREME COURT , observed that when the language is clear and plain, the courts cannot enlarge the scope by interpretative purposes. The appellant has raised the contention that he has been wrongly denied the benefit of the exemption Notification No. 45/2017-Cus., which provides different levels / measures of exemption benefits to the re-imported goods depending upon which export benefits, like duty drawback, rebate etc., were availed and subject to several conditions - the Commissioner has noted, that the appellant has submitted few sample invoices and on perusal of one tax invoice issued by the DTA, namely M/s Lupin Limited, Palghar to the appellant bearing Invoice No. 0000002152 dated 08.03.2017, it is observed that it has been dispatched on payment of Central Excise duty and drawback too have been claimed, however, the appellate authority has failed to examine the issue of exemption benefit under the said notification in detail, giving specific reasons. The matter needs to be remanded on the applicability of the exemption notification and whether the appellant is entitle to any benefit in terms thereof - Appeal partly dismissed and part matter on remand.

Summary

Issues Involved:
1. Whether goods removed from SEZ to DTA are chargeable to customs duties under section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006.
2. Applicability of exemption Notification No. 45/2017-Cus. to the re-imported goods.

Summary:

Issue 1: Chargeability of Customs Duties on Goods Removed from SEZ to DTA
The primary issue was whether goods removed from the Special Economic Zone (SEZ) to the Domestic Tariff Area (DTA), initially procured from DTA, are chargeable to customs duties under section 30 of the SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006. The appellant argued that under rule 48(3) of the SEZ Rules, 2006, goods procured from DTA and cleared back to DTA without manufacturing should be treated as re-imports, thus not liable for basic customs duty. The Tribunal, however, held that section 30 of the SEZ Act clearly mandates that any goods removed from SEZ to DTA are chargeable to customs duties, including anti-dumping, countervailing, and safeguard duties. The Tribunal emphasized that the provisions of section 30 are unambiguous and must be interpreted as they stand, without any scope for interpretative purposes. The Tribunal referenced multiple judgments, including Roxul Rockwood Insulation India Pvt. Ltd Vs Union of India, and Essar Project India Ltd. Vs. Commissioner of Customs, which consistently upheld that goods cleared from SEZ to DTA are subject to customs duties under section 30 of the SEZ Act.

Issue 2: Applicability of Exemption Notification No. 45/2017-Cus.
The appellant contended that they were wrongly denied the benefit of exemption Notification No. 45/2017-Cus., which provides various levels of exemption benefits to re-imported goods depending on the export benefits availed. The Tribunal noted that the Commissioner had observed that the appellant submitted sample invoices showing that goods were dispatched on payment of Central Excise duty and drawback was claimed. However, the appellate authority failed to examine the issue of exemption benefit under the said notification in detail. Consequently, the Tribunal remanded the matter for further examination on the applicability of the exemption notification and whether the appellant is entitled to any benefit under it.

Conclusion:
The appeal was partly dismissed, and the matter was remanded on the limited issue of the applicability of exemption Notification No. 45/2017-Cus. and the appellant's entitlement to benefits under it.

(Pronounced on 29th Nov. 2023).