Strict compliance with foreign currency account governs SEZ drawback claims; inapplicable rupee reimbursement relief could not save the claim.

Rule 30(8) of the SEZ Rules, 2006 treated payment from the SEZ unit's Foreign Currency Account as a mandatory condition for drawback or DEPB credit on supplies from a Domestic Tariff Area supplier. On the stated facts, payment was made from a current account, not a foreign currency account, and no valid documentary proof established compliance, so the drawback claim could not be sustained. A notification dated 3-2-2009 permitting reimbursement in Indian rupees was confined to reimbursement of duty in lieu of drawback for supplies by DTA suppliers to SEZ developers and could not override the rule for the claim in question. The text records that the revision succeeded and the original rejection was restored.

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Issues: (i) Whether drawback under Rule 30(8) of the SEZ Rules, 2006 was admissible when payment to the Domestic Tariff Area supplier was not made from the Foreign Currency Account of the Unit; (ii) Whether the notification dated 3-2-2009 permitting reimbursement in Indian rupees applied to the present claim.

Issue (i): Whether drawback under Rule 30(8) of the SEZ Rules, 2006 was admissible when payment to the Domestic Tariff Area supplier was not made from the Foreign Currency Account of the Unit.

Analysis: Rule 30(8) makes payment from the Foreign Currency Account of the SEZ unit a mandatory condition for admissibility of drawback or Duty Entitlement Pass Book credit against supply by a Domestic Tariff Area supplier. The payment in the case was made from a current account, and the record showed that it was not a foreign currency account. In the absence of valid documentary proof to establish compliance with the prescribed condition, the claim could not be sustained.

Conclusion: The drawback claim was not admissible on this ground and the finding was against the assessee.

Issue (ii): Whether the notification dated 3-2-2009 permitting reimbursement in Indian rupees applied to the present claim.

Analysis: The notification relied upon was confined to reimbursement of duty in lieu of drawback against supply of goods by Domestic Tariff Area suppliers to SEZ developers. The present claim did not fall within that category, so the amended proviso could not be invoked to override the statutory requirement under Rule 30(8).

Conclusion: The notification did not assist the assessee and was inapplicable to the claim.

Final Conclusion: The revision succeeded, the appellate order was set aside, and the original rejection of the drawback claim stood restored.

Ratio Decidendi: Where a fiscal concession is made conditional upon payment from a prescribed account, strict compliance with that condition is required, and an inapplicable subsequent relaxation cannot be used to validate a claim outside its scope.

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