Page 123 - ELT_1st August 2020_Vol 373_Part 3

2020 ] DLF UTILITIES LTD. v. UNION OF INDIA 305

Processing Areas and no operation and maintenance (O&M) benefits will
now be available for such power plants. An action taken report to the mat-
ter may be furnished to this Department.”
27. However, with effect from 1-4-2015, in the light of the 2015 Guide-
lines dated 6-4-2015 (Impugned in W.P. No. 25837 of 2016) of the 1st respondent,
petitioner has been issued with the impugned show cause notice dated 30-3-2016.
28. The impugned show cause notice (challenged in W.P. No. 25838 of
2016) calls upon the petitioner to show cause as to why
“i. The power plants owned and operated by M/s. DLF Utilities Ltd., Co-
developer, DLT IT/ITES situated in the processing area of M/s. DLF
IT/ITES SEZ should not be considered as situated in Non processing area
inasmuch as the Co-developer viz., M/s. DLF Utilities Ltd., have failed to
adhere to the conditions stipulated in the Ministry’s guidelines dated 27-2-
2009 as discussed above;
ii. The exemption for Central Excise duty on the High Speed Diesel pro-
cured from DTA should not be held as ineligible as discussed above in
terms of Rule 27(3) of SEZ Rules, 2006 read with Section 26 of the SEZ Act,
2005;
iii. An amount of Rs. 11,13,78,979/- (Rupees Eleven crores thirteen lakhs
seventy eight thousand nine hundred and seventy nine only) towards the
Central Excise duty involved on the quantity of 10856 KLs of High Speed
Diesel procured by them from DRA under ARE-1s during the period from
1-4-2015 to 3-10-2015 and detailed in the Annexure to this notice should not
be demanded in terms of Rule 27(3) of SEZ Rules, 2006 read with Section 26
of the SEZ Act, 2005 as discussed above;
iv. Why interest at appropriate rates on the amount of exemption availed
by them should not be demanded in terms of Section 28AA of the Customs
Act, 1962.
v. Why a penalty should not be imposed on them in terms of Section 117
of the Customs Act, 1962 for the irregular/wrong availment of exemption
under Rule 27(3) of the SEZ Rules, 2006 read with Section 26 of the SEZ Act,
2005.”
29. The impugned Guidelines of 2015 was further modified in 2016
vide Guideline dated 16-2-2016. Relevant portion of the 2016 Guidelines reads as
under :-
“(iv) With respect to the IT/ITES SEZs, which require continuous power
wherever generation of power has been approved by the BoA, as au-
thorised operations, to the Developer/Co-developer within the pro-
cessing area, and in respect of which there is statutory requirement on
the developer/co-developer to supply 24 hours uninterrupted quality
power supply at stable frequency in the zone, in terms of Rule 5A of
the SEZ Rules, 2006, in such cases generation of power will be carried
out as a unit within the processing area, and such power plant includ-
ing non-conventional energy power plant, will be entitled to all the
fiscal benefits covered under Section 26 of the SEZ Act including the
benefits for initial setting up, maintenance and duty-free import of
raw materials and consumables for generation of the power. Such du-
ty-free imports of capital goods, raw materials and consumables et
cetera would be counted towards NFE obligations of the unit.

EXCISE LAW TIMES  1st August 2020  123