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TMI Blog2019 (10) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... f what has been held by the Division Bench of the Gujarat High Court in the judgment in M/s Adani Power Limited Vs. Union of India, [ 2015 (11) TMI 1466 - GUJARAT HIGH COURT ], this Court is constrained to hold that since no duty was leviable upon the goods while entering the Special Economic Zone, the same when being removed as scrap are not chargeable to any customs duty as it consisted of scrap machine parts. The machine parts which were scrap on the date of their removal, even when new were exempt from customs duty under Section 26(1)(a) of the Special Economic Zone Act, 2005 as they were taken into the Special Economic Zone (imported) to carry on the authorized operations of the Company (in liquidation). The amount realised as customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was being demanded by the respondent prior to removing these goods out of the Special Economic Zone hereinafter referred to as SEZ and into the Domestic Tariff Area. The objection that has been filed to this application by Shri S.K. Mishra on behalf of the Development Commissioner, Noida Special Economic Zone, states that duty has been charged on M.S. Scrap. This duty was chargeable in view of Section 12 of the Customs Act read with Section 30 of the Special Economic Zone Act, 2005 and in accordance with Schedule 1 Chapter 172, heading 7204, of the Customs Tariff Act, 1975. In this regard, the submission of Shri Rajnath N. Shukla, counsel for the Official Liquidator is that the inventory of goods put to auction and actually purchased by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Domestic Tariff Area and non-processing areas of the zone was under challenge. The dispute arose because the petitioner Company was generating, transmitting and selling electrical energy generated from its plant situated in Mundra Port and Special Economic Zone. Some of the electricity generated was liable to be transferred from the Special Economic Zone to the Domestic Tariff Area and on its transfer that customs duty was sought to be charged. The Division Bench of the Gujarat High Court allowed the petition and quashed the notification under challenge. What is relevant for the case at hand is that which has been stated in paragraphs 47 and 48 of the said judgment of the Gujarat High Court, extracted below:- 47. The SEZ Act was enacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Central Government in this behalf :- (a) any goods removed from a Special Economic Zone to the Domestic Tariff Area shall be chargeable to duties of customs including antidumping, countervailing and safeguard duties under the Customs Tariff Act, 1975 (51 of 1975), where applicable, as leviable on such goods when imported; and (b) the rate of duty and tariff valuation, if any, applicable to goods removed from a Special Economic Zone shall be at the rate and tariff valuation in force as on the date of such removal, and where such date is not ascertainable, on the date of payment of duty. 48. Thus, from the above, it can be seen that in order to give an impetus to exports, the SEZ Act was enacted. The SEZ Act envisages a deeming ficti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Developer or entrepreneur; b. exemption from any duty of customs, under the Customs Act, 1962 (52 of 1962) or the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India; c. exemption from any duty of excise, under the Central Excise Act, 1944 (1 of 1944) or the Central Excise Tariff Act, 1985 (5 of 1986) or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorised operations by the Developer or entrepreneur; d. drawback or such other benefits as may be admissible from time to time on goods brought or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975 (51 of 1975), where applicable, as leviable on such goods when imported; and b. the rate of duty and tariff valuation, if any, applicable to goods removed from a Special Economic Zone shall be at the rate and tariff valuation in force as on the date of such removal, and where such date is not ascertainable, on the date of payment of duty. In view of the aforesaid provisions namely Section 26(1) a and 30(a) especially the portions underlined by me for emphasis and in view of what has been held by the Division Bench of the Gujarat High Court in paragraph 48 of the judgment in M/s Adani Power Limited Vs. Union of India, this Court is constrained to hold that since no duty was leviable upon the goods while entering the Special Economic Zo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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