TaxTMI 
TaxTMI 
2023 (11) TMI 1176
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.... as SEZ Act, 2005) read with the Customs Act, 1962. The appeal filed by the appellant challenging the order in original dated 01.12.2021 was also dismissed by the Commissioner (Appeals) vide impugned order. Hence the present appeal has been filed before this Tribunal. 3. The issue which arises for consideration here is whether the goods removed from SEZ to DTA (initially procured from DTA) are chargeable to customs duties in terms of section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006. 4. I have heard the learned counsel for the appellant and also the Authorised Representative for the revenue and have perused the records of the case. 5. The basic submission of the appellant is that in terms of rule 48 (3) of the SEZ Rules, 2006 if the goods procured from DTA are cleared back to DTA by SEZ unit without undertaking any manufacturing activity, such goods shall be treated as re-import and the said rule postulates deeming fiction with regard to non-leviability of basic customs duty on the re-imported goods. The revenue on the other hand relied on the findings of the authorities below referring to the provisions of rule 47 of SEZ Rules read with section 30 of SEZ Ac....
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....ted that the petitioner had accepted the terms prescribed in the approved letter dated 7-3-2011 for its setting up in SEZ unit, of which, one of the conditions is that the petitioner can supply/sell the goods or services in the domestic tariff area in terms of the provisions of the Special Economic Zones Act, 2005 and rules and orders made thereunder. In this regard, it is relevant to extract Section 30 of the Special Economic Zones Act, 2005, which deals with 'Domestic clearance by units', which reads as under : "30. Domestic clearance by Units. - Subject to the conditions specified in the rules made by the Central Government in this behalf :- (a) any goods removed from a Special Economic Zone to the Domestic Tariff Area shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975, where applicable, as leviable on such goods when imported; and (b) the rate of duty and tariff valuation, if any, applicable to goods removed from a Special Economic Zone shall be at the rate and tariff valuation in force as on the date of such removal, and where such date is not ascertainable, on the date of payment....
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....ved from a Special Economic Zone shall be at the rate and tariff valuation in force as on the date of such removal, and where such date is not ascertainable, on the date of payment of duty." Rule 47. Sales in Domestic Tariff Area.- (1) A Unit may sell goods and services including rejects or wastes or scraps or remnants or broken diamonds or by products arising during the manufacturing process or in connection therewith, in the Domestic Tariff Area on payment of Customs duties under section 30, subject to the following conditions, namely:- (a) Domestic Tariff Area sale under sub-rule (1), of goods manufactured by a Unit shall be on submission of import licence, as applicable to the import of similar goods into India, under the provisions of the Foreign Trade Policy: Provided that goods imported or procured from the Domestic Tariff Area and sold as such without being subjected to any manufacturing process shall be subject to the provisions of the Foreign Trade Policy as applicable to import of similar goods into India. (b) Domestic Tariff Area sale under sub-rule (1) of rejects or scrap or waste or remnants arising during the manufacturing pr....
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....ll be made in accordance with Customs Act and rules made thereunder. "Rule 48. Procedure for Sale in Domestic Tariff Area. - (1) Domestic Tariff Area buyer shall file Bill of Entry for home consumption giving therein complete description of the goods and/or services namely, make and model number and serial number and specification along with invoice and packing list with the Authorised Officers: Provided that the Bill of Entry for home consumption may also be filed by a Unit on the basis of authorization from a Domestic Tariff Area buyer. (2) Valuation of the goods and/or services cleared into Domestic Tariff Area shall be determined in accordance with provisions of Customs Act and rules made thereunder as applicable to goods when imported into India. (3) Where goods procured from Domestic Tariff Area by a Unit are supplied back to the Domestic Tariff Area, as it is or without substantial processing, such goods shall be treated as re-imported goods and shall be subject to such procedure and conditions as applicable in the case of normal re-import of goods from outside India: Provided that in the case where such goods are supplie....
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....the issue, however, I am not repeating the same. 11. In view of the substantive provisions of section 30 specifically providing for clearance of goods from SEZ to DTA on payment of customs and other duties, the submission sought to be made by the appellant that rule 48(3) carved out a deeming fiction of non leviability of BCD and SWS on the imported goods is not correct on the simple principle that the rules cannot go contrary to the substantive provisions of the Act. When section 30 in clear terms says that goods cleared from SEZ units shall be chargeable to duties of customs etc., and though the same are subject to the conditions specified in the rules made by the Central Government in that regard yet the interpretation given by the appellant is unsustainable. Rule 48 sets out the procedure for sale in domestic tariff area and clause (3) thereof merely says that goods procured from domestic tariff area by a unit are supplied back to the domestic tariff area without processing, such goods shall be treated as re-imported goods and shall be subject to such procedure and conditions as applicable in the case of normal re-import of goods from outside India. It nowhere says that no d....
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....Excise, Hyderabad Vs. Collector of Central Excise, Hyderabad - 1999 (113) ELT 24 (SC). On perusal of these judgements I am of the view that they are not relevant in the present context. 12. The Adjudicating Authority made the observations as under:- "In a normal import, the importer is the one who discharges the duty, but as per the special provisions of SEZ, the unit which is supplying the goods is discharging the duty liability. The fact that the supplier is discharging the duty does not give the supplier the status of an importer. When goods are supplied by a unit in SEZ to a DTA purchaser, the transaction is an import for the purchaser and the supplier cannot be an importer. The claim of the noticee is that the goods supplied by them should be treated as a re-import of goods which is without any logic because the supplier is not procuring any goods to the Indian territory from a foreign territory and cannot be an importer by any stretch of imagination. The purchaser of goods located in the DTA is the importer who is procuring the goods from the deemed foreign territory of SEZ. c. Further, Rule 48(3) based on which the entire refund claim is preferred by the....