SEZ goods removed to DTA chargeable to customs duties under section 30 of SEZ Act, exemption notification requires proper examination

CESTAT NEW DELHI held that goods removed from SEZ to DTA are chargeable to customs duties under section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006, as the statutory provisions are clear and unambiguous. The appellant's claim for exemption under Notification No. 45/2017-Cus for re-imported goods was not properly examined by the Commissioner despite evidence showing DTA unit had claimed export benefits including duty drawback. The appellate authority failed to analyze the exemption notification in detail. Matter partially remanded to determine applicability of exemption notification and appellant's entitlement to benefits. Appeal partly dismissed with partial remand for proper examination of exemption claims.

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Issues Involved:
1. Whether goods removed from SEZ to DTA are chargeable to customs duties under section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006.
2. Applicability of exemption Notification No. 45/2017-Cus. to the re-imported goods.

Summary:

Issue 1: Chargeability of Customs Duties on Goods Removed from SEZ to DTA
The primary issue was whether goods removed from the Special Economic Zone (SEZ) to the Domestic Tariff Area (DTA), initially procured from DTA, are chargeable to customs duties under section 30 of the SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006. The appellant argued that under rule 48(3) of the SEZ Rules, 2006, goods procured from DTA and cleared back to DTA without manufacturing should be treated as re-imports, thus not liable for basic customs duty. The Tribunal, however, held that section 30 of the SEZ Act clearly mandates that any goods removed from SEZ to DTA are chargeable to customs duties, including anti-dumping, countervailing, and safeguard duties. The Tribunal emphasized that the provisions of section 30 are unambiguous and must be interpreted as they stand, without any scope for interpretative purposes. The Tribunal referenced multiple judgments, including Roxul Rockwood Insulation India Pvt. Ltd Vs Union of India, and Essar Project India Ltd. Vs. Commissioner of Customs, which consistently upheld that goods cleared from SEZ to DTA are subject to customs duties under section 30 of the SEZ Act.

Issue 2: Applicability of Exemption Notification No. 45/2017-Cus.
The appellant contended that they were wrongly denied the benefit of exemption Notification No. 45/2017-Cus., which provides various levels of exemption benefits to re-imported goods depending on the export benefits availed. The Tribunal noted that the Commissioner had observed that the appellant submitted sample invoices showing that goods were dispatched on payment of Central Excise duty and drawback was claimed. However, the appellate authority failed to examine the issue of exemption benefit under the said notification in detail. Consequently, the Tribunal remanded the matter for further examination on the applicability of the exemption notification and whether the appellant is entitled to any benefit under it.

Conclusion:
The appeal was partly dismissed, and the matter was remanded on the limited issue of the applicability of exemption Notification No. 45/2017-Cus. and the appellant's entitlement to benefits under it.

(Pronounced on 29th Nov. 2023).

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