Request for clarification - Payment of customs duty as per Notification No. 91/2010 dated 6-9-2010, on clearance of electrical energy from SEZ to DTA or non-processing areas of SEZ in case of partial usage of imported coal as fuel for generation of power - Regarding. - Customs - F. No. 354/291/2011-TRU

Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi dated 15-12-2011 Subject : Request for clarification - Payment of customs duty as per Notification No. 91/2010 dated 6-9-2010 , on clearance of electrical energy from SEZ to DTA or non-processing areas of SEZ in case of partial usage of imported coal as fuel for generation of power - Regarding. A representation has been received from Trade seeking clarification on whether customs duty is leviable on clearances into the DTA or non-processing areas of the SEZ of the electrical energy produced when the same is generated using a blend of imported coal and domestic coal. 2. The matter has been examined. Currently, while a specific rate of basic customs duty is applicable to removals into the DTA or non-processing areas of SEZ of electricity generated using imported coal, removals into the DTA or non-processing areas of SEZ of power generated using domestic coal is subject to Nil basic customs duty. It has been pointed out that in practice most power SEZs use a mixture of imported and domestic coal and not any one of these exclusively. The Notification in question does not prescribe a rate for removal of electricity by such units. In the absence of such a provision, it is clarified that when a SEZ power unit uses a mix of both imported and domestic coal for generation of electricity which is removed into the DTA or non-processing areas of the SEZ, customs duty would be chargeable on a pro-rata basis in the same ratio as the ratio between imported and domestic coal in the mixture. For example, if a unit uses a mixture of 7 metric tonnes of imported coal and 3 metric tonnes of domestic coal (during a period for which the payment if due), it would be required to pay 70 per cent of the rate prescribed for units using imported coal. 3. The above position may be brought to the notice of Commissioners under your charge so that pending disputes, if any, may be decided accordingly. [F. No. 354/291/2011-TRU]