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2019-VIL-317-GUJ-CU

CUSTOMS High Court Case

Customs – challenge to levy of Customs duty on the removal of electricity from SEZ to DTA or non-processing area of the SEZ - levy for a period other than 26.06.2009 to 15.09.2010 – petitioner seeking refund of the amount collected on account of duty on electricity removed from SEZ to DTA - liability to make payment of customs duty at the rates prescribed under the Notification No.21/2002-Cus dated 01.03.2002, No.91/2010-Cus dated 06.09.2010, No.12/2012-Cus dated 17.03.2012, No.26/2012-Cus dated 18.04.2012 and Notification No.9/2016-Cus dated 16.02.2016 – HELD - the Division Bench, in the earlier decision has consciously restricted the relief granted to the petitioners to the period from 26.6.2009 to 15.9.2010 for the reason that while holding in favour of the petitioners the Division Bench was of the view that the provisions of rule 47(3) of the SEZ Rules are designed to align the power plants located within SEZ to be at par with power plants located outside SEZ, both being located within India - the Division Bench has observed that the case of the petitioner is that the levy of customs duty for the power supplied to DTA from SEZ amounts to double taxation as the petitioner was liable to pay duty on the raw material, namely, coal he had paid the duty on raw materials. Since the petitioner had already paid duty on raw materials under rule 47(3) of the SEZ Rules, he cannot be subjected to double taxation - However, by virtue of Instruction No.67 dated 28th October, 2010, in order to implement Custom Notification No.91/2010 dated 6.9.2010, it had been decided that operation of rule 47(3) of the SEZ Rules, 2006 be kept in abeyance with effect from 6.9.2010. Therefore, with effect from 6.9.2010, the petitioners were no longer liable to pay duty on raw materials and inputs. Therefore, if the petitioners do not pay the duty to the extent specified in the Notification No.91/2010 dated 6.9.2010 and subsequent notifications, the petitioners would be enjoying double benefits of not paying duty on raw materials and inputs and also not paying any customs duty on removal of electricity from the SEZ to DTA. It appears that therefore, the Division Bench has restricted the relief to the period up till 6.9.2010, as granting relief beyond that period would amount to entitling the petitioners to double benefit of exemption from payment of duty on raw materials and inputs and exemption from payment of customs duty - Apart from the above, the decision of the Division Bench would not be applicable for any period beyond 06.09.2010 when similar notifications were subject matter of challenge in the writ petition and the court did not deem it fit to grant relief to the petitioners in respect of such notifications - Moreover, as petitioners have only sought declaratory relief to the above extent, but have not called in question the validity of the said notifications, granting any declaratory relief would amount to rendering the said notifications nugatory without there being any challenge to the same - In view of what is held, the question of directing the appropriate authority to refund the amount collected on account of duty on electricity removed from SEZ to DTA does not arise - The petition fails and is dismissed

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