SEZ supply exemption and export treatment required fresh consideration after failure to address relevant circular and notification.

Failure to consider the petitioner's reliance on the circular dated 11.02.2010 and Notification No. 25/2016 dated 14.06.2016 concerning supplies to a Special Economic Zone rendered the excise demand order unsustainable. The Court found that the authority had proceeded on a different footing without meaningfully examining the amended exemption notification, the treatment of SEZ supplies as exports, and the contention that no duty accrues to the Government under the applicable export scheme. The availability of an appellate remedy did not bar interference in these circumstances. The impugned order was set aside and the matter was remanded for fresh consideration after personal hearing and decision on merits in accordance with law.

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Issues: Whether the order confirming central excise duty, interest and penalty was liable to be set aside for failure to consider the petitioner's reliance on the relevant circular and notification concerning supplies to a Special Economic Zone, and whether the matter required remand for fresh consideration.

Analysis: The impugned order was found to have proceeded on a different footing without addressing the petitioner's specific objections based on the circular dated 11.02.2010 and Notification No. 25/2016 dated 14.06.2016. The order did not meaningfully examine the legal effect of the amended exemption notification and the position that supplies to SEZ are to be treated as exports, including the consequence that no duty accrues to the Government when such clearances are made under the applicable excise export scheme. Since the relevant contentions were not taken into account, the order could not be sustained. The availability of an appellate remedy did not prevent interference in the circumstances.

Conclusion: The impugned order was set aside and the matter was remanded to the respondent for fresh consideration after granting personal hearing and deciding the issue on merits and in accordance with law.

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