2025 (9) TMI 1171

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....ade a request to the Development Commissioner, APSEZ at Visakhapatnam/respondent No. 3, to procure Chrome Concentrate from the Domestic Tariff Area without payment of the prescribed export duty. The said request was rejected vide the communication, dated 26.04.2024, by placing reliance upon the 5th proviso to sub-rule (1) of Rule 27 of the Special Economic Zones Rules, 2006 (for short, "the Rules of 2006"). 3. In the present petition, the petitioner challenges the vires of the 5thproviso to sub-rule (1) of Rule 27 of the Special Economic Zones Rules, 2006, as also the decision, dated 26.04.2024, as being ultra vires the Special Economic Zones Act, 2005 (for short, "the SEZ Act of 2005"). 4. The Special Economic Zones Act, 2005, was enacted primarily for promoting exports through an expeditious single window approval mechanism and to make available goods and services free of taxes and duties supported by integrated infrastructure for such export production. It was found that while there were incentives provided, it did not attract Foreign and Direct Investments and it was only with a view to provide a suitable policy framework with minimum regulatory regime and a single window....

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....provided in, a Special Economic Zone or a Unit, to carry on the authorized operations by the Developer or entrepreneur; Section 26(b) of the SEZ Act, 2005, envisages exemptions from any duty of customs on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India; Section 26(c) of the SEZ Act, 2005, envisages exemption from any duty of excise, under the Central Excise Act, 1944, or the Central Excise Tariff Act, 1985, on goods brought from Tariff Economic Zone to a Special Economic Zone or Unit, to carry on the authorized operations by the Developer or the entrepreneur; Section 30 of the SEZ Act, 2005, provides thus: "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 antidumping, 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 goo....

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....e petitioner would submit that while Section 2(m)(ii) of the Act, 2005, deems a supply made from Domestic Tariff Area to Special Economic Zone as 'Export', the same is made a legal fiction for the purposes of Special Economic Zones Act, 2005, and does not create a charge for export duty under the Act. 10. It is urged that there was no charging provision for levy of export duty on supplies made from Domestic Tariff Area to Special Economic Zone unlike Section 30 which specifically envisages levy of customs duty on movement of goods from Special Economic Zone to Domestic Tariff Area and further that while the erstwhile Section 76F(a) of the Customs Act, 1962, specifically envisaged levy of export duty on supplies from Domestic Tariff Area to Special Economic Zone, the same was consciously made inoperative by the Legislature vide Section 52(1) of the Special Economic Zones Act, 2005, and further that even under the Customs Act, 1962, the omission of Chapter XA containing Section 76F reflected the legislative intent to not impose a levy on the supply of goods from Domestic Tariff Area to a Unit in the Special Economic Zone. 11. Learned counsel for the respondents, on the other ha....

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....ower of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied. This power can be exercised in any of its manifestation only under any law authorising levy and collection of tax as envisaged under Article 265 which uses only the expression that no "tax" shall be levied and collected except authorised by law. It in its elementary meaning conveys that to support a tax legislative action is essential, it cannot be levied and collected in the absence of any legislative sanction by exercise of executive power of State under Article 73 by the Union or Article 162 by the State. 22. Under Article 366(28) "Taxation" has been defined to include the imposition of any tax or impost whether general or local or special and tax shall be construed accordingly. "Impost" means compulsory levy. The well-known and well-settled characteristic of "tax" in its wider sense includes all imposts. Imposts in the context have following characteristics: (i) The power to tax is an incident of sovereignty. (ii) "Law" in the context of Article 265 means an Act of le....

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....ed from payment of tax, duty or cess under Section 7 of the Special Economic Zones Act, yet, Section 55 does not at all authorize, in any manner, the Central Government to levy customs duty on account of movement of goods from Domestic Tariff Area to Special Economic Zone. 19. A reading of Section 30 of the SEZ Act, 2005, which was reproduced in the preceding paragraphs, would make it clear that this Section specifically makes goods leviable to customs duty, where such goods are removed from a Special Economic Zone to Domestic Tariff Area. There is no other provision in the Act which makes removal of goods from a Domestic Tariff Area to a Special Economic Zone susceptible to levy of such customs duty. 20. It is also not out of place here to mention that prior to the enactment of the Special Economic Zones Act, 2005, the Customs Act, 1962, contained Chapter XA, which specifically dealt with Special Economic Zones. This Chapter inter alia contained Section 76F dealing with levy of duties of customs and provided as under: "76F. Subject to the conditions as may be specified in the rules made in this behalf, - a. any goods admitted to a special economic zone from....