TMI Blog2011 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... eign territory comes into picture - the goods which have been destroyed have to be held to have been destroyed in the deemed foreign territory and if that is so no customs duty can be demanded - Appeal is allowed - C/669-671/2006 - A/286-288/2011-WZB/AHD - Dated:- 17-2-2011 - Ms. Archana Wadhwa, Shri B.S.V. Murthy, JJ. REPRESENTED BY : S/Shri V. Rama Rao and R. Vijay, Advocates, for the Appellant. Shri J.S. Negi, SDR, for the Respondent. [Order per : B.S.V. Murthy, Member (T)]. All the three appeals, though are against different orders, involve a common issue and have arisen under the same set of circumstances. The three appellant units are located adjacent to each other and on 4-12-04 midnight, there was a fire in one of the units which spread to the other units also. The fire was finally brought under control in the morning of 8-12-04. In the case of M/s. Satguru Polyfab Pvt. Ltd. (SPPL for short) the stock verification was conducted on 6-1-05, shortage was noticed and consequently it was calculated that the duty payable on the raw materials amounted to Rs. 11,16,751/-. In the case of M/s. Kutch Polymers, (KP for short), officers visited the unit on 31-12-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the foreign trade policy according to which goods going into the SEZ and from DTA shall be treated as deemed export and goods coming from SEZ into DTA shall be treated as import. The deemed status cannot be ignored for the purpose of demanding duty. 3. Learned DR submitted that Section 23 of Customs Act, 1962 is rightly not applicable as explained by the learned Commissioner in his order. Once the goods are said to have been cleared for home consumption, question of remission does not arise. Whatever be the reason for non-utilization of raw material, in the absence of specific provision, the appellants are liable to pay duty. 4. We have considered the submissions made by both the sides. 5. Section 76-A and Section 76-F of Customs Act, 1962 read as under : 76-A. Notification of special economic zone. The Central Government may, by notification in the official gazette, specify special economic zones comprising specifically delineated areas where any goods admitted shall be regarded, insofar as duties of customs are concerned, as being outside the customs territory of India as provided in this Chapter. 76-F. Levy of duties of customs. - Subject to the conditions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be in foreign territory. Therefore the provisions relating to imported goods and awaiting clearance from customs cannot be applied to the goods lying in SEZ. Further Section 23 provides for remission of duty on the goods where it is shown that imported goods have been lost or destroyed at any time before clearance for home consumption. This is further confirmed when we consider Regulation-4 in the Regulations notified under Notification No. 53/2003-N.T., dated 22-7-03. According to Regulation-4(4), the SEZ unit is required to file a bill of entry for home consumption in quadruplicate for clearance of imported goods at port/customs station/ICD etc. It has to be noted that bill of entry to be filed in this case is the bill of entry for home consumption and not for warehousing as in the case of 100% EOU or customs and bonded warehouse etc. Further Regulation-4(4)(viii) provides that the SEZ unit is required to obtain notional outer charge on goods from the proper officer of the SEZ. These regulations show that even though SEZ is treated as a foreign territory for the purpose of levy of customs duties, yet when it comes to procedure to be followed for clearance of goods to the SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -03 respectively. The learned advocate has not placed any successor notification or has not made any submission to show that the observations of the Commissioner were wrong. 12. The next submission that is to be considered is the submission that the deemed fiction has to be given full effect to. The learned advocate relied upon the decision of the Hon ble Supreme Court in the case of Jalyan Udyog referred to above. In this case the Hon ble Supreme Court observed as follows : It is not disputed that it is this exemption notification which is applicable herein. Now what does the notification say? In our opinion, it is couched in simple and clear language. It admits of no ambiguity or doubt. It says that ocean-going vessels other than vessels imported to be broken-up are exempt from payment of customs duty leviable thereon. It then says that where any such ocean-going vessel is subsequently broken-up it shall be chargeable with the duty which would be payable if it were imported then for being broken-up. The idea behind the notification evidently was to encourage the import of ocean-going vessels. The notification also contemplates and provides for the situation where an imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumption. Since SEZ is located within India and there is a possibility of diversion of the goods to DTA, exemption notification has also been issued under Customs Act even though the relevant exemption notification covering the present imports and goods lying in the SEZ have not been produced before us. In fact, in this case this non-availability of exemption to the SEZ unit which has created a problem for the appellants. As can be seen Rule 8 of SEZ Rules 2003 and Notification No. 52/2003-N.T. dated 22-7-03 provides that where goods admitted duty free in the SEZ are used for the purposes other than authorised operations or where the units fail to account the goods, duty has to be paid as if the goods have been removed for home consumption. In this case the custom s notification is recognizing the fact that when the goods are lying in the SEZ they have to be treated as existing in the foreign territory and only when the same are not used or not accounted for, they have to be treated as cleared for home consumption. Therefore the whole issue in this case boils down to the fact as to whether the fire accident which lead to the destruction of goods can be said to be a breach of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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