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2019 (10) TMI 826 - HC - CustomsAuction sale - demand of customs duty prior to removing these goods out of the Special Economic Zone and into the Domestic Tariff Area - HELD THAT:- The customs duty could have been levied at the time of removal of the goods from the SEZ only if customs duty was chargeable on these goods at the time of their import into the SEZ, although such import duty into SEZ may be exempted in view of other provision of the Special Economic Zone Act, 2005. In view of the provisions namely Section 26(1) a and 30(a) and in view of what has been held by the Division Bench of the Gujarat High Court in the judgment in M/s Adani Power Limited Vs. Union of India, [2015 (11) TMI 1466 - GUJARAT HIGH COURT], this Court is constrained to hold that since no duty was leviable upon the goods while entering the Special Economic Zone, the same when being removed as scrap are not chargeable to any customs duty as it consisted of scrap machine parts. The machine parts which were scrap on the date of their removal, even when new were exempt from customs duty under Section 26(1)(a) of the Special Economic Zone Act, 2005 as they were taken into the Special Economic Zone (imported) to carry on the authorized operations of the Company (in liquidation). The amount realised as customs duty by respondent no. 2 from the auction purchaser M/s Shree Ganesh Trading Company, was therefore wholly unwarranted, cannot be sustained and is hereby, set aside - Respondent no. 2 is directed to refund the amount realised as customs duty from the applicant, M/s Ganesh Trading Company - decided in favor of respondent.
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