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2018 (10) TMI 1372 - HC - Central ExciseSEZ Unit - sub-contract - benefit of exemption from Central Excise to the sub-contractor - case of petitioner is that merely because the manufacturer’s dispatch to the SEZ is linked through a chain of which a sub-contractor is a party, the benefit of exemption from Central Excise should not be denied to the contractor. Held that:- From reading of the Statement of Objects and Reasons of the Special Economic Zones Act, 2005, it is evident that one of the prime objectives of creation of such zones was to make available goods and services free of taxes and duties supported by integrated infrastructure for export production, expeditious and single window approval mechanism. For such implementation, Units were to be set up in such zones. The term “Unit” as defined under Section 2(zc) of the Act would mean a Unit set up by an entrepreneur in such Special Economic Zone. From the facts on hand, it is evident that Torrent Energy Limited was the SEZ “Unit” and the identity entitled to exemption. Reading Section 26 with Rule 27 of the Rules suggests that, when raw materials are procured for such a unit, such exemptions shall be allowed to a Unit and such benefit shall be available to contractors and for the purposes of such exemption a joint document is to be filed. This Rule i.e. Rule 27 falls under the Chapter prescribing procedure for establishment of a Unit. The privity of contract for claiming the benefit of exemption is strictly between Torrent Energy Limited, the “Unit” and available contractor, “the petitioner. If respondent No.4, Simplex has procured such raw material and paid excise and raised a claim for reimbursement, will not clothe such an entity to claim exemption, under the guise of it supplying goods to a Unit, through the petitioner. Merely because Siemens, as a Contractor has been saddled with a liability to reimburse the excise duty to Simplex Limited, respondent No.4, in itself, will not make the petitioner to avail the benefit of exemption, de-hors the mandate of Rule 27 read with Rule 30. In fact, the benefit of the Act is to a Unit who in turn by deeming fiction passes it on to a Contractor who has produced goods and services for manufacture etc., i.e. raw materials. It cannot, through the cloak of a sub-Contractor Simplex Ltd., respondent No.4, approach this Court, in a petition to seek exemption, which is not otherwise available to Simplex Industries – respondent No.4. What cannot be done directly cannot certainly be done indirectly - No petition would therefore be maintainable at the instance of the petitioner Siemens Ltd. The petition, therefore, is accordingly dismissed. The petitioner as a Contractor is not entitled to the benefit of exemption of Central Excise - petition dismissed.
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