A Division Bench of the Bombay High Court ruled that Customs Act has no jurisdiction with in Special Economic Zone (SEZ)Act, 2005and held that M/s. Renaissance Global Limited eligible for Customs Duty Exemption on import of scrap jewellery.
The petitioner,M/s. Renaissance Global Limited is engaged in the manufacture and export of gold, platinum and silver jewellery. Its unit is located within the Santacruz Electronic Export Processing Zone (SEEPZ). SEEPZ is a notified export processing zone and is covered by the SEZ Act. The Petitioner was granted a Letter of Permission (LOP) by the Joint Development Commissioner, SEEPZ (DC) being a license to manufacture and export all kind of jewellery – plain as well as studded. Upon coming into force of the SEZ Act, in terms of the proviso to Section 15(1) thereof, existing units did not require approval under the SEZ Act.
The petitioner has been importing jewellery for remaking, which is subsequently melted, and the precious metal derived therefrom is used for the manufacture of fresh pieces of jewellery. During the period April 2005 to May 2009, an aggregate of 1160 consignments of finished unsold jewellery were imported by petitioner.
In the course of its business, petitioner imported a consignment of gold and silver jewellery for remaking with an assessable value of Rupees Five Lakhs.The Consignment was intercepted by the Air Intelligence of the Commissioner of Customs even before it reached SEEPZ. The Consignment was later detained.
The common issue which arises for consideration is whether petitioners were permitted to import new or unused jewellery for remaking after melting and whether respondents have properly exercised jurisdiction and whether the provisions of the Customs Act as stated in the show cause notice are applicable in the facts of the present case.
Moreover, there are divergent views taken by two Government of India authorities, viz., Development Commissioner under SEZ Act and the Customs Authorities.
The Bench had to therefore, validate which of the conflicting views is correct, that is, whether the view of the DC, that import of new or unused jewellery for remaking by petitioner was permissible under the SEZ Act and the Rules or whether the provisions of the Customs Act under which the impugned order has been passed.
A Bench consisting of Justice AS Doctor and Justice K R Shriram observed that the Customs Act have no jurisdiction to investigate, seize and issue SCN under SEZ Act and quashed all the notices and orders issued by the Respondents. The petitioner was also held eligible for customs duty exemption on import of scrap jewellery.
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