TaxTMI 
TaxTMI 
2025 (10) TMI 17
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....andamus directing the respondents to refund the amount of Rs. 47,00,000/-, which has been deposited by the petitioner under protest on account of custom duties for seeking permission to dispose of unutilized goods under SEZ Rules, which was deposited vide challan No. 01/2016-17, dated 20.4.2016 and Rs. 6,59,700/- deposited vide challan No. 05/2015-16, dated 29.7.2015 in the interest of justice. iii) Or any other writ, order or direction which this Hon'ble Court may deem fit, just and proper in the facts and circumstances of the case may kindly be issued. iv) Dispense with the filing of certified copies of Annexures and permission to place photo copies of Annexures. v) Dispense with issuance of advance notice to the respondents. vi) Award the cost of the petition to the petitioner." 2. Brief facts necessary for adjudication of the matter are that petitioner claims to be a body incorporated under Companies Act, 1956, engaged in the business of developing industrial and urban townships, other infrastructural projects including development of First Operational Special Economic Zone (SEZ) in Punjab that is approved for IT and ITES sector. It is....
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....tioner maintaining its accounts relating to goods in question in accordance with provisions of law with rider that restraint order is subject to final decision of writ petition and in case writ petition is dismissed, petitioner shall be liable to deposit requisite duties alongwith interest in accordance with law. Said writ petition and its pendency is not an impediment in adjudication of present matter. 4. Petitioner was granted permission for procurement of goods to carry out authorised operations in SEZ at Mohali vide initial order dated 02.02.2007 for value of goods amounting to Rs. 32,40,81,567/-. This permission was renewed and extended from time to time and ultimately till 19.09.2014. In respect to request for further extension vide petitioner's letter dated 11.09.2014, it received reply from specified Officer to apply for extension under Rule 12(5) of The Special Economic Zones Rules, 2006 (for short - 'SEZ Rules') and sought information regarding complete list of goods procurement duty free in respect of which extension is sought and list of material/goods out of above duty free goods, which have become unfit for use. Such list of goods was submitted by petitioner after ....
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....ected the Developer to refund the applicable duties on the left over goods in terms of Rule 25 of the SEZ Rules 2006." 8. Petitioner then approached Chartered Engineer for evaluation of goods which were sought to be scrapped/destroyed. Certificate dated 27.07.2015 (Annexure P-19) was issued by Chartered Engineer and petitioner on this basis applied for extension for use of left over stock for a period of one year. Respondent No. 3 declined said request while stating that it has no power under the Statute to grant the relief as sought. Petitioner still persisted and submitted similar request again which was also rejected vide communication dated 26.10.2015. Sum of Rs. 6,59,700/- was deposited by petitioner on 28.10.2015 under protest. 9. Petitioner was called upon vide letter dated 04.12.2015 to refund the applicable duty on unutilized goods as per decision of UAC in its meeting held on 22.05.2015. Petitioner again sought extension of time for utilization of left over stock vide letter dated 15.02.2016 (Annexure P-25). Same was yet again rejected on 18.02.2016 (Annexure P-26). Sum of Rs. 47 lakhs was deposited by petitioner on 20.04.2016 as refund of custom duty on account of ....
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....lity of certain goods, Custom Department opposed destruction under Rule 27(9) of SEZ and insisted on refund of duties under Rule 25 of SEZ without considering petitioner's submission or even its pending request for extension. It is submitted that it was due to economic slow down and other commercial exigencies that certain goods remained unutilized and it was only to avoid disruptions of SEZ operations that petitioner deposited amount in question under protest reserving the right to challenge it. Impugned actions, it was submitted, are arbitrary, illegal and in breach of procedure established by the statute and contrary to object of SEZ Policy which aims to facilitate industrial development through exemptions and operational flexibility. Petitioner who has acted in a bona fide manner and strictly in accordance with applicable provisions should not be penalized for administrative lapses or non-application of mind by respondents. It was urged that State cannot be permitted to retract from statutory exemptions and benefits offered under SEZ Policy. Petitioner had acted in furtherance of said permissions and assurances granted by respondents. Therefore, any unilateral withdrawal or den....
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....allowed to a Unit shall also be available to the contractors appointed by such Unit and all the documents in such cases shall bear the name of the Unit along with the contractor and these shall be filed jointly in the name of the Unit and the contractor: Provided further that the unit shall be responsible and liable for proper utilization of such goods and services in all cases.] (2) In case of any doubt as to whether any goods or services are required by a Unit or Developer for authorized operations or not, it shall be decided by the Development Commissioner. (3) The import of duty free material for setting up educational institutions, hospitals, hotels, residential and/or business complex, leisure and entertainment facilities or any other facilities in the non-processing area of the Special Economic Zone shall be as approved by the Board and import of no duty free material shall be permitted for operation and maintenance of such facilities: Provided further that any goods for the personal use of, or consumption by officials, workmen, staff, owners or any other person in relation to a Unit or Developer, shall not be eligible for exemptions, draw....
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.... supply back to the Domestic Tariff Area of goods, the same shall not be insisted upon and such goods shall be destroyed with the permission of the Specified Officer: Provided further that the goods which are sent outside the Special Economic Zone for repairs are returned to the Special Economic Zone, within 180 days from the date of removal from the Special Economic Zone, under intimation to the specified officer. In case goods are sent out for replacement then on replaced goods, no Duty Entitlement Passbook Scheme, duty drawback or other export incentives shall be claimed for this purpose. Provided further that destruction shall not be permitted in case of precious and semi-precious stones and precious metals: Provided also that in case of return of goods procured from the Domestic Tariff Area, the same shall be allowed on refund of the export entitlement which have been received or availed or claimed by the Domestic Tariff Area supplier or the Unit or the Developer, as the case may be. (10) The assessment of imports and domestic procurement by a Developer or a Unit, shall be on the basis of self-declaration and shall not be subjected to routin....
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....lize or dispose off goods as provided such goods shall be liable for payment of duty as if the goods have been removed to Domestic Tariff Area on the date of expiry of the said validity period under sub-rule (1)." 17. It is apparent that fields of operation of Rule 27(9) and Rule 25 of SEZ Rules are different. Rule 27 (9) of SEZ Rules provides that goods and parts thereof imported or procured from Domestic Tariff Area [Domestic Tariff Area as per Section 2(i) means the whole of India (including territorial waters and continental shelf) but does not include area of Special Economic Zones] when found to be defective or otherwise unfit for use or which may have been damaged or become defective after such import or procurement may be sent outside SEZ without payment of duty for repairs and replacement to the supplier or its authorized dealers or be destroyed. 18. It is apparent that goods referred to in this provision would be those which when received in SEZ are found to be defective or otherwise found to be unfit and those which may have damaged or become defective after such import or procurement i.e. during use in SEZ. There is merit in the argument raised by learned counsel ....