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amounts to double taxation inasmuch as the petitioners continue to be liable for
payment of duty on raw materials and consumables, coal etc., under Rule 47(3)
of the rules and shall now be required to pay further customs duty @ 16% on
electrical energy removed from SEZ and a totally new and additional liability in
respect of electricity removed into non-processing areas of SEZ although there is
no liability to do so under the SEZ Act and the SEZ Rules. Again in paragraph 62
of the judgment the Division Bench has observed that the case of the petitioner is
that the levy of customs duty for the power supplied to DTA from SEZ amounts
to double taxation as the petitioner was liable to pay duty on the raw material,
namely, coal he had paid the duty on raw materials. Since the petitioner had al-
ready paid duty on raw materials, namely, coal and consumables under Rule
47(3) of the SEZ Rules, he cannot be subjected to double taxation. The Division
Bench found force in the contention that the petitioner should not be made liable
to suffer double taxation, and if the petitioner is made to pay the customs duty
for the energy supplied then payment on duty of raw materials or any other duty
on inputs should not be levied on the petitioner, and the duty paid by the peti-
tioner on raw materials is liable to be refunded, as otherwise, the levy of duty on
the power supplied to DTA from SEZ amounts to double taxation and it would
be in violation of Article 265 of the Constitution of India. However, as pointed
out by the Learned Assistant Solicitor General, by virtue of Instruction No. 67,
dated 28th October, 2010, in order to implement Customs Notification No.
91/2010, dated 6-9-2010, it had been decided that operation of Rule 47(3) of the
SEZ Rules, 2006 be kept in abeyance with effect from 6-9-2010. Therefore, with
effect from 6-9-2010, the petitioners were no longer liable to pay duty on raw ma-
terials and inputs. Therefore, if the petitioners do not pay the duty to the extent
specified in the Notification No. 91/2010, dated 6-9-2010 and subsequent notifi-
cations, the petitioners would be enjoying double benefits of not paying duty on
raw materials and inputs and also not paying any customs duty on removal of
electricity from the SEZ to DTA. It appears that therefore, the Division Bench has
restricted the relief to the period up till 6-9-2010, as granting relief beyond that
period would amount to entitling the petitioners to double benefit of exemption
from payment of duty on raw materials and inputs and exemption from pay-
ment of customs duty.
19. Besides, it may be noted that the Notification No. 91/2010 and sub-
sequent notifications are exemption notifications and not notifications imposing
customs duty. The rate of duty is provided under the Customs Tariff Act, 1975,
the notifications issued under Section 25 of the Customs Act merely grant ex-
emption from payment of duty to the extent specified thereunder.
20. It may be noted that in the above writ petition, the petitioners had
challenged (i) Notification No. 25/2010-Cus., dated 27th February, 2010; (ii) Noti-
fication No. 21/2002, dated 1st March, 2002 as amended by clause 60 of Finance
Bill read with Notification No. 25/2010-Cus., dated 27th February, 2010; (iii) Let-
ters dated 26-2-2010 and 3-3-2010; and (iv) Notification No. 91/2010-Cus. amend-
ing Notification No. 21/2002, dated 1st March, 2002 read with Notification No.
25/2010-Cus., dated 27th February, 2010.
21. As is evident on a perusal of the reliefs prayed for in the petition,
the petitioners have sought a declaration that there is no liability on part of the
petitioners to make payment of customs duty at the rates prescribed under (i)
Notification No. 21/2002-Cus., dated 1-3-2012, (ii) Notification No. 91/2001-Cus.,
dated 6-9-2010, (iii) Notification No. 12/2012-Cus., dated 17-3-2012, and (iv) No-
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