TMI Blog2011 (2) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... ns have been made in the Act, granting exemption from taxes and duties which could otherwise have been leviable in the business of any production for exemption from such duty - Therefore, the instructions issued by the department, as rightly held by the learned Single Judge, not only runs counter to the aforesaid policy but is without authority of law, illegal and rightly set aside by the learned Single Judge - Accordingly, appeals are dismissed. - 3210, 4881 and 3208-3209 of 2010 - - - Dated:- 9-2-2011 - N. Kumar and Ravi Malimath, JJ. REPRESENTED BY : Shri K.N. Mohan, Advocate, for the Appellant. Shri K.S. Ravi Shankar, Advocate, for the Respondent. [Judgment per : N. Kumar, J.]. Misc. W.No. 835/2011 is filed seeking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng through the Director of the SEZ Section, issued a communication to all the Deputy Commissioners, including 2nd respondent, stating that, export duty had been levied on export of steel products and the 2nd respondent was to allow supply of steel products to SEZs on submission of a bond and a bank guarantee to the effect that, duty would be finally payable/chargeable. On 30-6-2008, the 1st respondent modified the earlier instructions of 23-5-2008 and stated that the supply of steel products should be permitted upon payment of export duty. The resultant position would be, the Customs Exemption Notification issued under Section 25 of the Customs Act, 1962 was construed as a levying provision, enabling levy of customs duty on export by the 1s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was contended that, the basic object of levying export duty is to discourage export of steel items and augment domestic availability. The export of any item from the SEZ to a place outside India is statutorily exempted from export duty under Section 26(1)(d) of the Act. If the duty is also not applied to supply of steel made from DTA to SEZ, then the entire transaction for such supply, would escape without any levy of export duty and the basic object to the levy would be defeated. Therefore, the instructions issued by respondents 1 and 7 is well within the ambit of law and does not violate or infringe the rights guaranteed to the petitioners under Article 19(1)(g) of the Constitution of India. Therefore, they sought to justify the instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners in the SEZ. 10. In coming to the said conclusion, the learned Single Judge also relied on the judgment of the Gujarat High Court in the case of Essar Steel Limited v. Union of India reported in 2010 (249) E.L.T. 3 (Guj.). Thereafter, considering the provisions of the Act, as well as the Customs Act where it was held, that the customs duty is a duty on customs leviable under the Customs Act, 1962 on goods exported from India, under Section 12 r/w Section 51 of the said Act and the second schedule to the Export Tariff of the Customs Tariff Act, 1975, such duty is a condition precedent to sending goods out of the country to other lands. The export duty is imposed with reference to the movement of property by way of export, particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now been affirmed by the Apex Court, it is clear, there is no charging provision under the Act to levy export duty on the petitioners. 13. It is not in dispute that the preamble to the Act makes it clear, that this enactment was passed to provide for the establishment, development and management of the Special Economic Zone for the promotion of exports and for matters connected therewith or incidental thereto. 14. Section 5 of the Act makes it further clear, that the Central Government while notifying any area as a Special Economic Zone or an additional area to be included in the Special Economic Zone and discharging its functions under this Act, shall be guided by factors, namely, generation of additional economic activity, promotion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive by way of exemption from payment of import duty and export duty. The department without properly appreciating the object for which the Act was passed, has issued this notification, which is only to defeat the object of the passing of the Act. In the Act there is no charging provision. For that, they rely on the Customs Act, 1962. As held by the Apex Court, in construing fiscal statutes and in determining the liability of a subject tax, one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the revenue establishes that the case falls strictly within the provisions of the law, the subject can be taxed and if, on the other hand, the case is not covered within the fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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