Court rules export duty on iron and steel products from DTA to SEZ unconstitutional.

The Court declared the Circular dated 30.06.2008 as ultra-vires the SEZ Act, SEZ Rules, Customs Act, and the Constitution of India. It directed not to impose export duty on iron and steel products procured from DTA suppliers for SEZ operations, challenging specific Customs Notifications. The Court found similarities with a prior case and ruled against levying export duty on goods supplied from DTA to SEZ, granting relief to the petitioners in the present case without costs and staying the order's implementation for four weeks.

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Issues:
Challenge to Circular dated 30.06.2008 as ultra-vires SEZ Act, SEZ Rules, Customs Act, and Constitution of India; Direction sought to not levy export duty on iron and steel products procured from DTA suppliers for SEZ operations; Challenge to Notification No.66/08 & 77/08 - Cus regarding DTA supplies to SEZ.

Analysis:
The petitioners filed two petitions under Article 226 of the Constitution seeking a declaration that the impugned Circular dated 30.06.2008 is ultra-vires the SEZ Act, SEZ Rules, Customs Act, and certain Articles of the Constitution. They also requested a direction to not impose export duty on iron and steel products procured from DTA suppliers for SEZ operations, challenging Notification No.66/08 & 77/08 - Cus related to DTA supplies to SEZ.

The Court issued a rule on 01.12.2008 returnable on 17.12.2008, with Mr. P.S. Champaneri, learned Assistant Solicitor General appearing for the respondents. Mr. Hardik P. Modh, representing the petitioners, argued that the issue aligns with a previous decision by the Court in Special Civil Application No.9656 of 2008 and urged for similar relief in the present petitions. Mr. Champaneri did not distinguish between the previous case and the current petitions but mentioned the respondents' intention to appeal to the Apex Court.

After considering arguments from both sides and reviewing the petitions, the Court found that the issue in the present petitions was akin to the one addressed in Special Civil Application No.9656 of 2008. In the earlier case, the Court had ruled that levying export duty on goods supplied from DTA to SEZ was unjustified, absolving petitioners from paying such duty on such movements.

Consequently, the Court allowed the present petitions to the extent mentioned above, making the rule absolute without costs. Responding to Mr. Champaneri's request, the Court stayed the operation, implementation, and execution of the order for four weeks from the date of the judgment.

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