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2009 (12) TMI 439 - HC - CustomsSEZ Jurisdiction Show cause notice issued by Commissioner of Custom to unit in SEZ. Revenue contending that section 2 21 and 22 of SEZ Act 2005 yet to be operationlised and Commissioner of Custom empowered to issue SCN and adjudicate. Contention also that Development Commissioner vested with administrative control of SEZ not empowered to adjudicate offence under Custom Act. Held that contention prima facie not acceptable. Power to issue SCN cannot be usurped until such authority satisfies court about locus standi and jurisdiction. Interim relief continue till final disposal.
Issues:
1. Jurisdiction of the authority in issuing Show Cause Notice under SEZ Act, 2005. 2. Applicability of Customs Act, 1962 in SEZ units. 3. Valuation of export goods under section 14 of the Customs Act. Analysis: Issue 1: Jurisdiction of the authority in issuing Show Cause Notice under SEZ Act, 2005 The petitioner challenged the Show Cause Notice issued under the SEZ Act, 2005, arguing that the authority lacked jurisdiction as per the provisions of the Act. The petitioner's senior advocate highlighted various sections of the SEZ Act and the Special Economic Zones Rules, emphasizing that the authority had overstepped its jurisdiction in issuing the notice. The High Court observed that the authority had issued the notice without proper jurisdiction, as the provisions of the SEZ Act did not empower it to do so. The Court found no valid reason for the petitioner to be accused of over-valuing goods, especially considering the significant disparity in cost per unit figures provided by different experts. Issue 2: Applicability of Customs Act, 1962 in SEZ units The respondent argued that until sections 20, 21, and 22 of the SEZ Act, 2005 were operationalized, the Commissioner of Customs would have the authority to issue Show Cause Notices and adjudicate cases in SEZ units. The respondent contended that the provisions of the Customs Act, 1962 were applicable to SEZ units until specific regulations were framed under the SEZ Act. However, the Court disagreed with this argument, stating that the Customs authorities were no longer competent to handle matters concerning units in SEZs after the SEZ Act came into force. The Court emphasized that the establishment of SEZs would be undermined if Customs authorities continued to exercise jurisdiction over SEZ units. Issue 3: Valuation of export goods under section 14 of the Customs Act The respondent further argued that the valuation of the petitioner's product per unit should be subject to section 14 of the Customs Act. However, the Court found this argument unconvincing, noting that after the enactment of the SEZ Act, specific authorities were designated to handle such matters. The Court emphasized that the Customs authorities were no longer authorized to intervene in issues related to SEZ units. Citing a Supreme Court decision, the Court reiterated that the authority issuing the Show Cause Notice must establish its jurisdiction and 'locus standi' before proceeding. The Court maintained the rule issued and extended the interim relief granted to the petitioner until the final disposal of the case. This detailed analysis of the judgment highlights the key legal issues surrounding the jurisdiction of authorities in SEZ matters and the applicability of relevant laws in the context of SEZ units.
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