9911796707
TMI Blog2015 (3) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case are the following. 2. The petitioner is an industrial unit set up within the Cochin Special Economic Zone ('CSEZ' for short). The same is a company incorporated under the Companies Act, 1956. It had set up the industrial unit in the CSEZ in the year 2001 for the manufacture and export of PVC Free Foam Sheets. Ext.P1 is a copy of the permission granted to the petitioner to set up the manufacturing unit on 29.5.2001. A copy of the green card issued to the petitioner is Ext.P2. For the purpose of their manufacturing process, the petitioner imported the necessary machinery, without paying any Customs Duty. This is for the reason that, the Special Economic Zone is treated as foreign territory under the Export-Import Polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleging that Sales Tax under the CST Act was payable in respect of the goods. 4. The petitioner thereupon challenged the said proceedings before this Court in WPC 19871/2004. As per Ext.P13 judgment dated 7.7.2004 this Court directed the second respondent to pass final orders in the matter under Section 29A of the KGST Act. Accordingly, the matter was considered by the second respondent and Ext.P15 order has been passed holding that, the petitioner is liable to pay Sales Tax under the CST Act in respect of the goods that were detained. As per Ext.P16 proceedings dated 21.7.2004 the petitioner was also directed to produce the warehousing certificate in respect of the machinery that was detained. The present writ petition was filed in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unter affidavit has been filed on behalf of respondents 2 and 3. According to the counter affidavit, the petitioner does not have a registration under either the KGST or the CST Acts. It is stated that, the goods have actually been sold to the sixth respondent and that the transaction is an interstate sale worth Rs. 4.75 crores. The tax due thereon is to the tune of Rs. 65.66 lakhs. Therefore, detention of the goods demanding security for the tax that is due, is perfectly in terms of Section 29A of the KGST Act. According to the counter affidavit, only the goods manufactured or produced by the petitioner qualify for exemption from the various enactments. In the present case the petitioner has not commenced production though he had imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced indigenously could be deposited. Therefore, the goods were warehoused in accordance with the terms of Ext.P3 bond with the Deputy Commissioner of Customs, CSEZ, Cochin. In other words, the goods were continuing to remain in a customs warehouse, without crossing the customs frontiers of India. 9. As per Ext.P4 Export-Import Policy units within the Special Economic Zone are entitled to exemption from Central Sales Tax as evident from paragraph 7.9, apart from the various other concessions granted. The expression "capital goods" is defined in Clause 9.10 which reads as under:- "9.10 'Capital Goods' means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of trade operations, duties and tariffs. Units like that of the petitioner are permitted to import capital goods without paying Customs Duty to the Special Economic Zone for the purpose of manufacture of their products. Such capital goods are also permitted to be transferred to other units located in similar Special Economic Zones with the permission of the fifth respondent. The petitioner has obtained Ext.P7 permission from the fifth respondent permitting such transfer. Ext.P5 is the agreement pursuant to which, the goods were being transported. Therefore, the goods that were exported to the Special Economic Zone which is to be treated as a foreign territory for the purposes of trade and tariffs, had not crossed the customs frontiers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Zone shall, with effect from such date as the Central Government may notify, be deemed to be a port, airport, inland container depot, land station and land customs stations, as the case may be under Section 7 of the Customs Act, 1962 (52 of 1962) Provided that for the purposes of this Section, the Central Government may notify different dates for different Special Economic Zones." In view of the above provisions of law as well as the terms of the Export - Import Policy, there cannot be any doubt regarding the fact that the goods are not liable to tax under the Sales Tax Act of our country. The counsel for the petitioner has placed reliance on the dictum of the Hon'ble Supreme Court in Kiran Spinning Mills v. Collector of Customs [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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