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TMI Blog2023 (6) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... ential duty along with interest, fine, penalty etc., as the case may be. It appears that the applicant has introduced concept of 'export' in relation to such imported equipment(s) in order to link it with Notification No. 45/2017-Cus which is not warranted but un-necessary as the same appears to have been done to confuse the issue for claiming undue exemption from payment of duties/taxes. Further, there is no doubt that for availment of exemption vide Notification No. 45/2017-Cus., goods have to be first exported and such exemption is not applicable to goods which have been warehoused, as in the current case. The use of words, 'imported', 'exported' and 'procured', in the provisions as per section 7 of the Special Economic Zones Act, 2005 will lead to inference that different meanings have been assigned to these words under the Special Economic Zones Act, 2005 and these words are not to be used inter-changeably. Further, as per the instant application, goods shall be first imported in a Domestic Tariff Area which after usage by a Sub-contractor gets transferred/warehoused to/in FTWZ by the importer of the goods i.e the applicant. As such this acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods cannot be treated as 'reimport' for application of procedures and conditions as applicable in the case of normal re-import of goods from outside India. Notification No. 45/2017-Cus is not applicable in the instant case. The facts of the application amply indicate that goods have been exported by units in FTWZ, which again makes the said Notification, inapplicable in view of the second proviso of the Notification. Moreover, there is no condition for 're-export' of goods under the Notification 50/2017-Cus., however a deeming fiction has been created by bringing in 're-export' which appears to have been done to deviate from the issue and the word 'export/re-export' is being un-necessarily equated with warehousing of goods. - CAAR/Del/09/2023 In Application No. VIII/CAAR/Delhi/11/2023 - - - Dated:- 28-4-2023 - SAMAR NANDA (CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI) Present for the Applicant: Shri K. Sivarajan Kalyanraman, Shri Gautam Khattar, Shri Vikash Agarwal, Shri Jayanta Kalita, Shri Manish Singhal Present for the Department : None RULING M/s Baker Hughes Oilfield Services India Pvt. Ltd., Khasra No. 1138/683 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional customs duty on the basis of essentiality certificate issued by the new customer; the Ministry of Finance, vide serial no. 5 of the Notification No. 45/2017-Customs dated 30.06.2017 has exempted basic customs duty, IGST and cess upon re-import of goods from outside into India, subject to the conditions that the same equipment has been reimported which was earlier exported, the importer is not a 100% EOU or unit of FTWZ, the equipment is not imported from any licensed warehouse under Customs and the equipment does not fall in the fourth schedule of the Central Excise Act 1944; on the basis of exemption under the Notification No. 45/2017, the applicant wishes to claim exemption from Basic Customs Duty, IGST and compensation cess; in view of the above, ruling on the following question has been sought: Whether the applicant is eligible to claim exemption from payment of customs duty, IGST and compensation cess on reimport of equipment from SEZ/FTWZ into DTA as per serial no. 5 of the Notification No. 45/2017, considering the fact the equipment is the same that were brought from the DTA earlier and admitted into the SEZ/FTWZ? ; 4. The applicant has further stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and must be entitled for the exemption from customs duties, IGST and compensation cess as provided in the Notification No. 45/2017-Cus. 5. Comments in the matter have been received from the concerned Commissioner of Customs, Nhava Sheva-General, JNCH, wherein, it is inter-alia stated that on perusal of the condition of Notification No. 45/2017-Cus., it is apparent that the Notification had clearly denied the duty exemption to the goods exported from 100% EOU or a unit in FTWZ; therefore the answer for the question asked by the applicant in present application for advance ruling, is in negative; the applicant has sought support for their claim relying on the clarification in Circular No. 21/2019 dated 24.07.2019 to explain the intent of the government to allow the goods to be cleared under Notification No. 45/2017-Cus.; the circular has been issued in a different context and the applicant has tried to read it out of context; it is apparent that the clarification vide the said circular has been issued w.r.t. goods which were exported earlier for exhibition purpose or on consignment basis however the applicant does not intend to export the goods either for exhibition or on consignm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the SEZ must not avail yet another benefit under Notification 45/2017-Cus. when they are re-imported. The applicant submits that the restriction contained under the second proviso does not apply to a situation where the applicant never exported goods from an export-oriented undertaking or a Free Trade Zone. In fact, the applicant merely exported goods to the FTWZ and it never exported goods from an FTWZ. Therefore, the Department has erred in misconstruing the facts of the Application vis-a-vis the second proviso to Notification 45/2017-Cus. The applicant has also made following point-wise submissions: (i) In the present case, the applicant is not a 100% EOU or a FTWZ unit and the goods are not exported by a 100% EOU or a unit in the Free Trade Zone hence the proviso will not be applicable in the instant case. (ii) The said Circular was issued in the context of goods sent for exhibition or on consignment basis. However, the purpose of the applicant in highlighting the Circular is that the Circular clarifies that a movement of goods from India to outside India, not being pursuant to a transaction of supply, shall be entitled for exemption under residual entry at SI. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategorically stated that activity of movement from FTWZ to DTA has not happened in the past and as such the subject activity is not an ongoing activity but a proposed activity. Referring to Notification 50/2017-Cus., it was stated that the notification does not stipulate any condition for reexport of goods; the goods are only re-exported to meet with a condition of contract with the customer; the proviso of notification 45/2017-Cus. is not applicable in the instant application for advance ruling. The other submissions made during the personal hearing are reiteration of their submissions made vide letter dated 18.03.2023 of the applicant. 8. Further submissions vide letter dated 10.04.2023 have also been given by the applicants, clarifying points arising out of discussion during the personal hearing. Point-wise explanation given by the applicant is as below: (i) Indian Government awards contract for exploration and production of oil and gas to these oil companies, these oil companies are being referred as 'Contractor(s)'. To execute the aforesaid contracts i.e., to explore and produce oil and gas, oil companies' or 'Contractors' further hires various compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f multiple contracts for petroleum operations, the applicant would re-import the goods under a fresh EC from respective Contractor/ customer. In this re-import, the applicant will claim benefit of BCD under S.No. 404 of Notification 50/2017-Cus. and Sl.no 5 of Notification 45/2017-Cus. for IGST. Since, the applicant has already paid IGST at the rate of 12% at the time of original import. Denial of benefit of Notification 45/2017-Cus. would lead to the payment of IGST again i.e. double taxation on the same goods/equipment. In case, the applicant re-imports the goods/equipment upon payment of IGST at 12% every time on every re-import, the entire purpose of providing concessional rate on imports for petroleum gas operations would get defeated. This would be against the intent of the Government. In addition to above, the goods/equipment would always be under the control responsibility of the applicant under an operating lease model and will be used for more than one contract. Hence, payment of duties again and again on the same goods/equipment at the time of reimport (i.e., FTWZ to DTA) will cause un-due hardships to the applicant. In view of the aforesaid submissions, the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y,- (i) a Unit in a Special Economic Zone; or (ii) a Developer, shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from payment of taxes, duties or cess under all enactments specified in the First Schedule. The use of words, 'imported', 'exported' and 'procured', in the above provisions will lead to inference that different meanings have been assigned to these words under the Special Economic Zones Act, 2005 and these words are not to be used inter-changeably. Further, as per the instant application, goods shall be first imported in a Domestic Tariff Area which after usage by a Sub-contractor gets transferred/warehoused to/in FTWZ by the importer of the goods i.e the applicant. As such this activity is covered under the term, 'export' as defined under the Special Economic Zones Act, 2005 as under Subsection (m) of section 2 of the Special Economic Zones Act, 2005, meaning of 'export' inter-alia includes supplying goods, or providing services, from the Domestic Tariff Area to a Unit or Developer. However, when these goods are transferred from FTWZ to DTA or DTA to FTWZ, such transfer of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Circular states that the clarification shall apply to all pending matters involving similarly placed exporters and importers, as the case may be. 'Exporter and Importers', referred in the instant application cannot be said to be similarly placed as the 'exporters and importers' referred to in the Circular. 10.6 I also note that applicant has drawn attention to rule 48 of the SEZ Rules, 2006, however this rule inter-alia states that where goods procured from DTA by a Unit are supplied back to the DTA, as it is or without substantial processing, such goods shall be treated as re-imported goods and shall be subject to such procedure and conditions as applicable in the case of normal re-import of goods from outside India. In light of the above, it can be convincingly stated that under the SEZ Act, 2005 read with SEZ Rules, 2006, words 'import' and 'procure' have been assigned different meanings. It is also important to note that activity of bringing goods from a Unit or Developer in SEZ to DTA is not covered under the definition of the term, 'import ' under the SEZ Act, 2005, therefore such transfer from SEZ to DTA cannot be termed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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