Page 122 - ELT_1st August 2020_Vol 373_Part 3

304 EXCISE LAW TIMES [ Vol. 373

Thus, the power plant installed by the petitioner fell within the “Pro-
cessing Area” of the said Special Economic Zone. Thus, all procurements of HSD
oil for O & M operation by the petitioner were without payment of Excise duty.
A reference to the impugned Guideline will be made in the succeeding para-
graph of this Order. The impugned guideline restores the position in 2009 Guide-
lines.
23. In 2009, the 1st respondent issued 2009 Guidelines dated 27-2-2009
under Section 5 of the SEZ Act, 2005 read with Rule 12 of the Special Economic
Zone Rules, 2006. As per the aforesaid guidelines, a power plant to be set up by a
Developer in a SEZ as a part of infrastructure facility was to be located in the
Non-Processing area of SEZ and the developer which included co-developer like
the petitioner were entitled to only certain fiscal benefits for initial setting up.
24. It clarified that no fiscal benefit would be admissible for operations
and maintenance under Rule 27(3) of the SEZ Rules, 2006. It also further stipulat-
ed that there will be no obligation to achieve positive Net Foreign Exchange
Earning (NFE) for such power plants.
25. However, the 2009 Guideline was modified by 2012 Guideline dat-
ed 21-3-2012. Importantly it gave certain relaxation and stated as follows :-
“(1) Such a power plant set up in a processing area will be entitled to all
the benefits available to developers/co-developers, including fiscal
benefits under Section 26 of the SEZ Act, 2005 including benefits for
initial setting up, duty-free imports of raw materials, components and
consumables for operation and maintenance of power plant and gen-
eration of power plant.
(ii) However, a power plant set up by a developer/co-developer in an
SEZ as part of infrastructure facility in the non-processing area of an
SEZ as part of infrastructure facility in non-processing area will be enti-
tled to fiscal benefit only for its initial setting up and no fiscal benefit
would be admissible for its operation and maintenance in terms of
Rule 27(3) of SEZ Rules. There will be no obligation to achieve posi-
tive Net Foreign Exchange Earning (NFE) for such power plants.”
26. Since, the petitioner’s power plant had already been earmarked and
fell within the “Processing Area”, the petitioner procured HSD Oil without pay-
ment of Excise duty from a local supplier namely the Indian Oil Corporation Ltd.
(IOCL) located in the Domestic Tariff Area (DTA). This guideline was with-
drawn. The relevant portion of the impugned Guidelines dated 6-4-2015 which
has been (challenged in W.P. No. 25837 of 2016) reads as under :-
“With reference to subject cited above, I am directed to inform that the
above mentioned guidelines issued vide this Department’s letter of even
number dated 21st March, 2012 have been withdrawn by the Government
with immediate effect i.e. 1st April, 2015. Further, the Power Guidelines is-
sued vide this Department’s letter of even number dated 27th February,
2009 have been restored. A copy of the communication in this regard is en-
closed.
2. In pursuance of the above cited decision, you are informed that
henceforth setting up of power plants shall be allowed only in the Non-
Processing Area of SEZs. Further, those power plants which are presently
situated in Processing Areas of SEZs, shall be demarcated as Non-

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