TaxTMI 
TaxTMI 
2011 (2) TMI 460
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....nging the order passed by the learned Single Judge, who has held that, the instructions issued by respondent No. 3 in these appeals under the impugned notification are wholly illegal and cannot be sustained and accordingly declared that, no export duty is payable for supply of goods by the parties in the Domestic Tariff Area (for short, hereinafter referred to as 'DTA') to the petitioners in the Special Economic Zone (for short, hereinafter referred to as 'SEZ'] and all proceedings initiated in this regard are liable to be quashed. 3. For the purpose of convenience, parties would be referred to, as they are referred to in the original writ petitions. 4. The petitioners before the learned Single Judge were all developers and entr....
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.... fact that both the DTA units and SEZ units were intended to be developed by the petitioners being physically situated within the territory of India. The order has the effect of levying duty on export of goods which are factually not leaving out of the territory of India as export of goods outside India and import of goods from outside India into India, which is illegal and unconstitutional. Therefore, they preferred writ petitions challenging the aforesaid instructions. 7. The respondents filed their counter, contending that, Section 53 of the Act provides that, a SEZ shall be deemed to be a territory outside the customs territory of India, for purpose of undertaking authorized operations. Accordingly, in view of the deeming provisio....
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....ment of goods from DTA to SEZ is treated as an export under the Act only by a legal fiction for purposes of the Act, namely, for making available benefits as in the case of actual exports like duty draw back and other export benefits to the SEZ units or the developer or a DTA supplier at their option. To construe this movement of goods as entailing a liability of payment of duty, would run counter to the purpose for which the legal fiction is created under the SEZ Act. The levy of export duty as is evident arises under the Customs law and not under the SEZ Act. The levy of customs duty on exports is sanctioned by Entry 83 of List I of the VII Schedule to the Constitution. The respondents, seeking to rely on the provisions of the SEZ Act, wo....
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....port' and 'India' in the Customs Act, 1962 or any amendment in the charging section i.e., Section 12 or insertion of a charging provision contemplating the movement of goods from the Domestic Tariff Area to the Special Economic Zone is a taxable event, levy of export duty cannot be justified under the provisions of the Customs Act, 1962. To depart is, seeking to levy and recover the duty under the Customs Act, 1962. However, the provisions of the Act do not envisage the movement of goods from the Domestic Tariff Area to the Special Economic Zone to be a taxable event as the said provisions do not contain any charging provisions providing for the levy and imposition of export duty and the said Act does not contain any provisions for recovery....
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....y of India, the security of the State and friendly relations with foreign states. Therefore, the main object behind this legislation is to generate economic activity, which in turn, shall promote investment from domestic and foreign sources and also provide employment opportunities, apart from development of infrastructure facilities. Any export made from these units situated in SEZ, outside the territory of India are completely exempted from Customs Act. Under the Act, if goads are procured from DTA, such imports are also exempted from payment of tax which is in the nature of an incentive under the plan of the Government. As these petitioners are not paying export duty, the persons who are supplying materials, though they are not liable to....