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TMI Blog2022 (11) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... it for supply of plastic injection moulded components, wire wound components and electronic assembly and other parts to units in the said SEZ - At the time when the petitioner obtained the allotment letter from the first respondent, there was a global meltdown. Therefore, there was a delay in commencing and completing the construction by the petitioner. By the time the construction was completed, the two units for whom the petitioner was conceived to supply the plastic injection moulded components, wire wound components and electronic assembly exited from Special Economic Zones (SEZ). Thus, the petitioner was left in the lurch. The continuance of the petitioner as a Special Economic Zones (SEZ) Unit supplying to a unit in the Domestic Tariff Area (DTA) would render the petitioner an unviable unit. If the unit is de-notified, the petitioner will be liable to refund the duty concession availed on the goods that were imported into Special Economic Zones (SEZ) Area i.e., the goods used for constructing the factory and for installing, commencing and erecting of capital goods. The petitioner will have to repay the concession availed in terms of Section 29 read with Section 26(d) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner agrees to such terms as may be imposed by the first respondent to safeguard the interest and integrity of SEZ. The petition is disposed off. - W.P.No.18768 of 2020 And W.M.P.Nos.23331 & 23328 of 2020 - - - Dated:- 9-11-2022 - Hon'ble Mr.Justice C.Saravanan For the Petitioner : Ms.Prerna Khatri for M/s.A.K.Mylasamy and Associates For the R1 R3 : Mr.M.Karthikeyan ORDER The petitioner has challenged the impugned order dated 29.09.2020 issued by the first respondent bearing reference P-III/SPR/SEZSparrow/ 25/2008. 2. By the impugned order, the allotment of land to the petitioner in the SIPCOT Hi-Tech SEZ, Sriperumpudur has been cancelled. 3. The petitioner had earlier filed an application dated 21.01.2008 to manufacture plastic injection moulded components, wire wound components and electric assembling with the respondents subject to approval of the Unit Approval Committee/Development Commissioner of MEPZ, the second respondent herein. The petitioner was allotted a land in the midst of a Special Economic Zone in Sriperumpudur called SIPCOT Hi-Tech SEZ in the year 2008. 4. The petitioner was allotted a total extent of 2 acres of land on 27.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner had difficulty in commencing the construction and therefore approached the second respondent for extension of time. The second respondent by a communication dated 22.03.2010 extended the time for a period of one year from 29.07.2009 to 28.07.2010 in terms of Rule 19(4) of Special Economic Zones Rules,2006. Rule 19 (4) of the SEZ Rules, 2006, reads as under: The letter of Approval shall be valid for one year within which period the Unit shall commence production or service or trading or Free Trade and Warehousing activity and the Unit shall intimate date of commencement of production or activity to Development Commissioner: Provided that upon a request by the entrepreneur, further extension may be granted by the Development Commissioner for valid reasons to be recorded in writing for a further period not exceeding two years: Provided further that the Development Commissioner may grant further extension of one year subject to the condition that two-thirds of activities including construction, relating to the setting up of the Unit is complete and a chartered engineer s certificate to this effect is submitted by the entrepreneur: [Provided also that the Board o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Heavy Industries India Private Limited and Dell International Services India Private Limited had moved out of the said SEZ. However, the petitioner was forced to stay back in the SEZ, on account of the on-going construction and the time and capital invested in the development of the unit. 17. It was further highlighted that the petitioner was incapable of supplying to these companies while still operating as a SEZ Unit. The petitioner categorically stated that all the raw materials were available in the local market and that the unit will not be importing any duty free material, whereas applicable custom duty will be paid on sale of its product to domestic customers and this made the project uneconomical. Hence, requested for de-notifying the petitioner s unit as a SEZ Unit and to permit manufacturing of goods as a job worker for other units in the Domestic Tariff Area, (DTA). 18. After several rounds of discussion, the petitioner s request was not acceded. By a communication dated 15.09.2014, the office of the second respondent informed the petitioner that de-notification of the unit can be made only by the developer i.e.,the first respondent herein. The second respondent, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-Tech SEZ, Sriperumbudur site allotted to you but the unit is idle as the project is unviable under the SEZ rulings applicable and requested to de-notify you SEZ Unit. You have already been informed through Government that the plot allotted to you is in the midst of the SEZ and de-notification could not be considered. However, you have not taken any concrete steps till date to utilize the land for the purpose for which it was allotted. The above default amounts to non-observance and breach of the conditions of allotment order/lease deed. Please note that if you fail to implement the project within 90 days from the date of this notice, we will be constrained to cancel the allotment and thereafter, we will proceed to resume the plot under TNPPE Act. We request you to acknowledge receipt of this letter. 25. The petitioner replied to the same, which has culminated in the impugned order dated 29.09.2020, reads as under: P-III/SPR/SEZ-Sparrow/25/2008 Dated :29.09.2020 M/s.Sparrow Television Pvt. Ltd., 344, Raheja Arcade, 1/1, Koramangala Industrial Area, Bangalore 560 095. BY ROAD/MAIL Sirs, Sub: Hi-Tech SEZ, Sriperumpudur, Plot No.DV-4/1 measuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s faithfully, Sd/- MANAGING DIRECTOR 26. Thereafter, the petitioner has also been issued with a notice under Section 4 of the Tamil Nadu Public Premises (Eviction Of Unauthorised Occupants) Act, 1975. The petitioner has replied to the same. 27. The specific case of the petitioner is that the petitioner is entitled for de-notification of the land allotted to the petitioner from the purview of the Special Economic Zones Act, 2005, as it has been done in the case of few others. 28. A specific reference has been made to the case of the following allottees for whom the land allotted by the first respondent has been identified by separate Notifications : - S.No. Notification No. Notification Date Notified Area(in Hectares) De-Notified Area (In Hectares) Total Area(In Hectares) 1 S.O.2141(E) 22.12.2006 189.771 - 189.771 2 S.O.1308(E) 31.07.2007 41.369 - 231.140 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the land allotted to the petitioner is not feasible as it was in the midst of the SEZ Unit and de-notification of which would affect the contiguity. 36. It has been further stated that there was also no possibility to provide separate access to the petitioner after de-notification of the land without affecting the continuity of the SEZ. 37. It was further submitted that the petitioner also failed to commence either the construction within the stipulated time or complete the construction within the stipulated time or commence trial production or commercial production. 38. A reference was made to a decision of this Court in the case of M/s.Saravana Sastha Steel India Private Limited Vs. The Managing Director, SIPCOT Limited and two Ors., in W.P.No.14877 of 2020 and etc batch, vide its common order dated 24.09.2021, wherein, this Court directed the petitioners to either opt to surrender the land allotted to them and get the refund of the amount paid by them after deduction of the amount as per the prevailing policy of the first respondent or if the petitioners are willing to retain the lands allotted to them despite such delay in implementing the project, they sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition. 47. I have considered the arguments advanced by the learned counsel for the petitioner and the learned counsel for the respondents and perused the affidavit and counter affidavit and also the provisions of SEZ Act, 2005 and the rules made thereunder. I have also perused the documents filed. 48. The petitioner appears to have built up building / shed in 2 Acres allotted to the petitioner vide allotment letter dated 27.03.2008. It was intended to manufacture plastic injection moulded components, wire wound components and electronic assembly for Samsung Heavy Industries India Private Limited and Dell International Services India Private Limited. Thus, the petitioner was conceived as an ancillary unit for supply of plastic injection moulded components, wire wound components and electronic assembly and other parts to units in the said SEZ. 49. At the time when the petitioner obtained the allotment letter from the first respondent, there was a global meltdown. Therefore, there was a delay in commencing and completing the construction by the petitioner. By the time the construction was completed, the two units for whom the petitioner was conceived to supply the plastic i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .... (d) drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into a Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the authorised operations by the Developer or entrepreneur; 52. The petitioner therefore wants to be de-notified. On the other hand, it is case of the first respondent that the petitioner's unit is located in the midst of the Special Economic Zones (SEZ) and therefore, the petitioner's unit cannot be de-notified under Rule 8 of the Special Economic Rules, 2006. 53. It is further case of the respondents that no separate access can be provided to the petitioner as the Domestic Tariff Area (DTA) Unit. It is the stand of the first respondent that by de-notifying, the land / area allotted to the petitioner separately has been objected by the units in SIPCOT Hi Tech SEZ, Sriperumbudur. It is submitted that de-notification of the land allotted to the petitioner is not feasible as it would alter the integrated congruity. 54. Thus, the question that arises for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that was allotted to the petitioner in the midst of the Special Economic Zones (SEZ). 59. The petitioner has heavily invested to the said unit as is evident from the counter affidavit filed by the first respondent and the communications of the respondents indicating that the petitioner has put up a construction. Prima facie, it appears by de-notifying, the petitioner's unit as a Domestic Tariff Area (DTA), no prejudice would be caused either to the first respondent or the second respondent or the units in the neighbourhood. Ultimately, the interest of the revenue has to be protected. 60. Though the intention of the petitioner was to operate as a Special Economic Zones (SEZ) unit, the fact remains that it was intended to supply the plastic injection moulded components, wire wound components and electronic assembly and other parts of Samsung Heavy Industries India Private Limited and Dell International Services India Private Limited. However, these units have exited from the Special Economic Zones (SEZ) units making the petitioner's unit unviable as a SEZ unit. 61. The petitioner has heavily invested in the land by paying the lease amount to the first respondent an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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