Page 120 - ELT_1st August 2020_Vol 373_Part 3

302 EXCISE LAW TIMES [ Vol. 373

2015, the 2nd respondent, the Development Commissioner, MEPZ, Chennai-45
has issued the impugned SCN dated 30-3-2016 bearing reference No.
25/SO/2015-MP EZ-SEZ to the petitioner and has called upon the petitioner to
pay a sum of Rs. 11,13,78,979/- in terms of Rule 27(3) of Special Economic Zone
Rules, 2006 read with Section 26 of the Special Economic Zones Act, 2005.
4. The petitioner has therefore challenged the aforesaid show cause no-
tice dated 30-3-2016 bearing reference No. 25/SO/2015-MPEZ-SEZ (hereinafter
referred to as the impugned show cause) issued by the 2nd respondent, the De-
velopment Commissioner, MEPZ, Chennai- 45 in W.P. No. 25838 of 2016.
5. The petitioner is a Co-Developer of Information Technolo-
gy/Information Technology Enabled Services located in a Special Economic
Zone (SEZ) in Pour, Chennai.
6. The petitioner was approved as a co-developer by the Board of Ap-
proval, Ministry of Commerce by an approval order dated 17-6-2008 and 7-10-
2008 to generate 84 MW power for being supplied to units located in SEZ, that
was being developed by DLF Info City Developers (Chennai) Ltd.
7. The petitioner was procuring High-Speed Diesel (HSD) without
payment of Excise duty from a local refinery in terms of Section 26(1)(c) of the
Special Economic Zones Act, 2005 read with Rule 27 of the SEZ Rules, 2006 for
carrying on authorised operation in the “Processing Area”.
8. It is the case the petitioner that the impugned 2015 Guidelines cannot
deny the exemptions provided under the provisions of the Special Economic
Zones Act, 2005 and the aforesaid Rules by altering the location of the power
plant of the petitioner to an area in a “Non Processing Area” to make all the pro-
curements dutiable for generation of electricity for being supplied to units locat-
ed in the Special Economic Zones. It is submitted that the impugned show cause
notice dated 30-3-2016 by the 2nd respondent seeking to recover an amount of
Rs. 11,13,78,979/- as Excise duty from the petitioner on HSD Oil supplied be-
tween 1-4-2015 to 2-10-2015 was liable to be quashed.
9. It is further submitted that even if Excise duty has to be collected, it
has to be collected from the manufacturer/refinery concerned which supplied
HSD Oil to the petitioner and therefore the proposed demand was contrary to
the well-known canons of law and contrary to the provisions of the Act.
10. It is further submitted that there is no method provided either un-
der the Act or the Rules made thereunder to order recovery of the Excise duty
from the recipient like the petitioner even if it is assumed procurement was
without any authority of law.
11. It is further submitted that, the Large Tax Unit of the Excise De-
partment has issued a notice dated 6-4-2016 to Chennai Petroleum Corporation
Ltd. for supplies effected without payment of duty to similarly placed person. It
is therefore submitted that at best notice could have been issued to the supplier
who supplied HSD Oil to the petitioner without duty. As such, the impugned
show cause notice was without the authority of law.
12. It is further submitted that the impugned 2015 Guidelines dated 6-
4-2015 was later replaced with a new Guidelines dated 16-9-2016 as a result of
which the status quo ante that was prevailing immediately prior to the impugned
2015 Guideline has been partly restored.
13. It is therefore submitted that all procurement after 16-9-2016 are
without payment of tax. It is therefore submitted that benefit of Guidelines dated
EXCISE LAW TIMES  1st August 2020  120