Customs powers in Special Economic Zones stayed on legal findings, but release of goods remained operative.

The Gujarat HC stayed the Tribunal's declaration on customs powers under Rule 29 of the Special Economic Zones Rules, 2006 and Section 14 of the Customs Act, 1962, which had stated that customs authorities could not assess or confiscate goods meant for a Special Economic Zone and that valuation under Section 14 would not arise. The Court declined to stay the Tribunal's final direction granting release of the goods, so the operative relief in favour of the importer remained in force while the legal observations were suspended.

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Issues: Whether the Tribunal's observations and declaration of law on the powers of customs authorities under Rule 29 of the Special Economic Zones Rules, 2006 and Section 14 of the Customs Act, 1962 should be stayed, while leaving undisturbed the Tribunal's final direction granting release of the goods.

Analysis: The relief sought was confined to interim stay of the legal observations made by the Tribunal in the impugned order. The order records that the Tribunal had made a declaration that customs authorities were not empowered to assess or confiscate goods meant for a Special Economic Zone and that valuation under Section 14 of the Customs Act, 1962 would not arise. The Court stayed that declaration of legal position, but expressly declined to stay the final direction reversing the Commissioner's order. The consequence was that the importer continued to benefit from the Tribunal's operative relief for release of goods.

Conclusion: The Tribunal's observations and declaration of law were stayed, but its final direction in favour of release of the goods remained operative.

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