TUF Metallurgical Private Limited Vs Union of India and others (Andhra Pradesh High Court)
Andhra Pradesh High Court held that 5th Proviso to Rule 27(1) of the Special Economic Zone Rules, 2006 imposing export duty on supplies from Domestic Tariff Area [DTA] to Special Economic Zone [SEZ] is ultra vires. Accordingly, the proviso is struck down and petition is allowed.
Facts- The petitioner, M/s. TUF Metallurgical Private Limited, is a company, which is engaged in the business of manufacturing Low Carbon Ferro Chrome (LCFC) falling under ‘HSN Code – 7202 4900’ from its unit which is located within the Andhra Pradesh Special Economic Zone. The entire production of LCFC is stated to be intended for export outside India.
The primary raw material required for the manufacture of LCFC is Chrome Concentrate which falls under ‘HSN Code – 2610 0040’, which the petitioner procures from a mine located in Orissa, which is a part of the Domestic Tariff Area of India.
The petitioner claims to have made a request to the Development Commissioner, APSEZ at Visakhapatnam/respondent No.3, to procure Chrome Concentrate from the Domestic Tariff Area without payment of the prescribed export duty. The said request was rejected vide the communication, dated 26.04.2024, by placing reliance upon the 5th proviso to sub-rule (1) of Rule 27 of the Special Economic Zones Rules, 2006. In the present petition, the petitioner challenges the vires of the 5thproviso to sub-rule (1) of Rule 27 of the Special Economic Zones Rules, 2006, as also the decision, dated 26.04.2024, as being ultra vires the Special Economic Zones Act, 2005.
