Division Bench Upholds Exemption for Supplies to SEZ, Dismisses Writ Appeal

The Division Bench admitted the writ appeal challenging the maintainability ruling by the Single Bench, citing exceptions to the restriction on entertaining writ petitions with alternate remedies. Regarding the exemption from excise duty, the court noted the appellant's favorable history in similar cases and upheld the exemption for supplies to the Special Economic Zone. The court dismissed the writ appeal, directing the appellant to pursue the available appellate remedy and admonishing them for their conduct. The appellant was allowed to file an appeal before the Tribunal within a specified timeframe.

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Issues Involved:
1. Maintainability of the writ petition despite the availability of an alternate remedy.
2. Exemption from excise duty for supplies from the Domestic Tariff Area to the Special Economic Zone under Rule 19 of the Central Excise Rules, 2002.
3. Compliance with previous court orders and directions.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:
The writ appeal was filed challenging the dismissal of the writ petition by the Single Bench on the ground of alternate remedy. The Single Bench relied on the Supreme Court decision in Assistant Collector of Central Excise Vs. Dunlop India Ltd. However, the Division Bench noted that exceptions exist to the self-imposed restriction on entertaining writ petitions when alternate remedies are available. Citing the case of Mahindra & Mahindra Ltd. Vs. Joint Commissioner (CT), the Bench held that the writ petition was maintainable and admitted the writ appeal, deciding to consider the case on merits.

2. Exemption from Excise Duty:
The core issue was whether supplies from the Domestic Tariff Area to the Special Economic Zone were exempted from excise duty under Rule 19 of the Central Excise Rules, 2002. The appellant had previously succeeded in similar cases before the Tribunal for other periods. The appellant relied on Notification No. 67/1995, the circular issued by the Commissioner of Central Excise dated 11.2.2016, and Notification No. 25/2016-C.E. dated 14.6.2016, which substituted 'free trade zone' with 'special economic zone'. The court noted that the same issue had been favorably decided for the appellant in previous instances, highlighting a pattern of favorable judgments from the Tribunal.

3. Compliance with Previous Court Orders:
The appellant contended that the directions issued by the court in W.P.No.40100 of 2016 had not been complied with by the Department. The court observed that the Department had not filed any appeal against the order in W.P.No.40100 of 2016, and non-compliance could lead to contempt proceedings. However, the Additional Commissioner of GST & Central Excise filed an affidavit confirming compliance with the court's directions, indicating that orders had been passed and dispatched to the appellant. The court found the appellant's claim of non-compliance to be a false statement, emphasizing the appellant’s duty to inform their counsel about the received orders.

Conclusion:
The court dismissed the writ appeal, confirming the Single Bench's order. The appellant was admonished for their conduct and directed to pursue the appellate remedy available. The court refrained from imposing costs or making strong observations against the appellant, given their realization of the mistake. The court allowed the appellant to file an appeal before the Tribunal, with the period of limitation computed excluding the duration from the date of filing the writ petition until 15 days from receiving the certified copy of the judgment.

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