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2015 (11) TMI 1466 - HC - CustomsLevy of customs duty on goods cleared from SEZ to DTA and non-processing area of the SEZ - retrospective levy - Challenge the constitutionality and legality of Government Notification No.25/2010-Customs dated 27.2.2010 - levy of customs duty at the rate of 16% advalorem has been levied on electrical energy removed from Special Economic Zone - The power supply from the power plant which is inside the SEZ area from where the power is supplied outside the SEZ area is in dispute in this petition. - Held that:- Petitioner should not be made liable to suffer double taxation, and the petitioner is made to pay the custom duty for the energy supplied then payment on duty of raw materials or any other duty on inputs should not be levied on the petitioner, and the duty paid by the petitioner on raw materials is liable to be refunded, as otherwise, the levy of duty on the power supplied to DTA from SEZ amounts to double taxation and it would be in violation of Article 265 of the Constitution of India. Custom duty at the rate of 16% advalorem levied by Notification dated 27.2.2010 could not be imposed retrospectively w.e.f. 26.6.2009 and, therefore, retrospective amendment is illegal and arbitrary and deserves to be set aside. Petitioner is entitled for exemption from payment of custom duty for the period 26.6.2009 to 15.9.2010 on the electricity cleared to DTA from SEZ. We are further of the considered opinion that the entire proviso to Government Notification No.25/2010-Customs dated 27.2.2010 is violative of Section 25(1) of the Customs Act, 1962 read with Section 30(a) of the SEZ Act, arbitrary and liable to be quashed. In view of the above, the said Notification No.25/2010-Customs dated 27.2.2010 as well as Notification No.21/2002-Customs as amended by Clause 60 of the Finance Bill, 2010 (Second Schedule thereto) are ultra vires Entry 83 of List I of Seventh Schedule of the Constitution of India, Section 12 of Customs Act, 1962 and Section 30 of SEZ Act, 2005 as well as Articles 14 and 265 of the Constitution of India and consequently deserves to be quashed and set aside. - Decided in favour of assessee.
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