TaxTMI 
TaxTMI 
2023 (6) TMI 1528
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....e (FTWZ) to Domestic Tariff Area (DTA) is the proposed activity as stated in the application and the applicant vide the aforesaid application has sought ruling on the question of applicability of serial number 5 of Notification No. 45/2017-Cus. dated 30.06.2017 for such re-import of goods/equipment from a SEZ/FTWZ to DTA. 3. The applicant vide their application for advance rulings has inter-alia stated that, they are engaged in providing mining services or support services to mining to oil & gas exploration and production companies across India such as Oil & Natural Gas Corporation and Cairn India; in pursuance to providing the mining services or support services to mining, they will be importing equipment required for providing such services; the equipment being used for oil and gas exploration projects will be imported from outside India at a concessional rate of customs duty under serial number 404 of the Notification No. 50/2017-Customs dated 30.06.2017 on the basis of an essentiality certificate from the respective customer; the said certificate is issued by the customer with a stipulated condition in the contract to export the imported equipment post completion of contract....
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....dia, the same may need to be surrendered on re-import of the said equipment; however, the purpose is not to impose any import duty on this equipment; in light of the above discussions, it can be inferred that exemption from duties, taxes and cess should be equally applicable to re-import of equipment from SEZ/FTWZ to DTA as envisaged under serial number 5 of Notification No. 45/2017-Cus. The applicant has also stated that under various legal provisions, the concept of duty exemption on re-import i.e. clearance from SEZ to DTA has been contemplated under the SEZ law, as well viz. rule 48 of Special Economic Zones Rules, 2006 dealing with procedure for sale in domestic tariff area, rule 49 of Special Economic Zones Rules, 2006 dealing with domestic tariff area removals, and stated that it is their understanding that once equipment have been brought in FTWZ without availing any drawback or exports incentives, are subsequently re-imported in the same form into the DTA, even under the SEZ laws the said transaction has to be treated as re-imports and accordingly they are not liable for discharging any customs duties or IGST in view of serial number 5 of the Notification No. 45/2017-Cus .....
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.... be applicable in present case. 6. The applicant has also given further submissions vide their letter dated 19.05.2023, wherein apart from reiterating submissions made earlier vide their application for advance ruling, the applicant has replied to the comments of the concerned Commissionerate wherein it is inter-alia stated that, - - the subject activity is ongoing and present application has been filed seeking ruling to allow the applicant for exporting the goods to LSP in FTWZ and reimporting the same into DTA by availing duty exemption under serial number 5 of Notification No. 45/2017-Cus. and they would like to highlight that the transaction is an ongoing transaction (FTWZ to DTA), however the applicant has filed the application for future transaction for sending of the goods from FTWZ to DTA; - the Specified Officer has inter-alia observed that reliance placed by the applicant on Circular No. 21/2019 dated 24 July, 2019, is incorrect as the circular was issued in a different context and the same has been read out of context by the applicant; the clarification is issued w.r.t. goods exported earlier for exhibition purpose or on consignment basis; however, i....
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....l re-import of goods from outside India into India; moreover, neither the Notification No. 45/2017-Cus. nor does the rule 48(3) of SEZ Rules contemplate the nature of transaction under which the goods should be procured in SEZ except the stipulation that there should not be any export entitlements availed when these goods were admitted into the SEZ; - as regards comments of the concerned Commissionerate that 'holding of goods by FTWZ units temporarily cannot be equated with the compliance of condition of export of SEZ for the purpose of re-export in terms of Customs Notification and then to re-export to DTA.', it is stated that in terms of section 30 of SEZ Act, the goods removed from SEZ to DTA shall be chargeable to Customs duty as leviable on such goods when imported; LSP's are practically operating in FTWZs which in common parlance are the warehousing units in FTWZ; thus comments of the Specified Officer are completely baseless, more so when there is no condition placed by Notification 45/2017 as to the purpose for which goods are exported or re-imported; - they are not governed by the second proviso to Notification No. 45/2017 which states, 'P....
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.... FTZ units in the notification no. 45/2017-Cus. are not applicable in the instant application for advance ruling, as the applicant is neither EOU nor FTZ unit. 8. Finding that the application is valid in terms of the provisions of the Customs Act and the CAAR Regulations, 2021, having gone through submissions and additional submissions of the applicant and having heard the applicant, I proceed to examine the question on merits. 9.1 I take note of the comments of the concerned Commissionerate on the application for advance ruling. I find that in-order-to avail exemption under the Notification 45/2017-Cus., the importer will have to inter-alia establish, whether the goods are re-imported, whether the re-imported goods have been exported by a hundred percent export-oriented undertaking or a unit in a Free Trade Zone (Special Economic Zone). 9.2 I note from the submissions of the applicant that condition of re-export of the equipment after their import availing exemption under Notification 50/2017-Cus. is a condition built in the contract of the importer with their Contractor and the applicants have themselves admitted that it is not a condition prescribed under Notification N....
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....- section (o) of section 2 of the Special Economic Zones Act, 2005. Thus, this activity of transfer of goods from FTWZ to DTA cannot be termed as import/re-import in terms of the Special Economic Zones Act or Customs Act, 1962, thus not covered under section 7 of the SEZ Act, 2005 and hence no exemption from duties/taxes is admissible. 9.4 I also note that as per Sub-section (n) of Section 2 of the Special Economic Zones Act, 2005, "Free Trade and Warehousing Zone" means a Special Economic Zone wherein mainly trading and warehousing and other activities related thereto are carried on. In order to bring more clarity on the issues involved, reference is drawn to Sub-rule (5) of Rule 18 of the Special Economic Zone Rules, 2006 which inter-alia provides that the Units in Free Trade and Warehousing Zones or units in Free Trade and Warehousing Zone set up in other SEZ, shall be allowed to hold the goods on account of the foreign supplier for dispatches as per the owner's instructions and shall be allowed for trading with or without labelling, packing or repacking without any processing. In light of Sub-rule (5) of rule 18 of Special Economic Zones Rules, 2006, it is noticed ....