Page 129 - ELT_1st August 2020_Vol 373_Part 3

2020 ] DLF UTILITIES LTD. v. UNION OF INDIA 311

ed/situated in the Processing Areas of SEZs shall be demarcated as Non-
Processing Areas. It also stated that no Operation and Maintenance (O & M) ben-
efits will be available for such power plant and an action may be taken and the
report may be furnished to the Department.
50. The power exercised under Section 5 of the Act by the Central Gov-
ernment is for issuing general guidelines for notifying any area as a Special Eco-
nomic Zone or an Additional Area to be included in the existing Special Econom-
ic Zone. While discharging its function under the Act, the Central Government
shall be guided by the following, namely :-
(a) generation of additional economic activity;
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
(e) development of infrastructure facilities;
(f) maintenance of sovereignty and integrity of India, security of the
State and friendly relations with foreign states.
51. Thus, the power exercised under Section 5 of the Act can only serve
as a guideline for the Central Government while notifying any area as a Special
Economic Zone or while including an additional area in the Special Economic
Zone. The power to demarcate an area within the Special Economic Zones into
“processing area” and “non-processing area” is vested with the Central Govern-
ment only under Section 6 of the Act.
52. As per Section 6, a processing and non-processing areas are demar-
cated in the following manner :-
(a) the processing area for setting up Units for activities, being the
manufacture of goods, or rendering service; or
(b) the exclusively for trading or warehousing purposes; or
(c) the non-processing area for activities other than those specified in
clause (a) or clause (b).
53. Thus, any area within a Special Economic Zone where any manu-
facturing activity or any services is rendered may be demarcated as a “pro-
cessing area”. A non-processing area is an area where neither of the activities
specified in Section 6(a) and (b) are carried out. Where any manufacturing activi-
ty or any service is rendered within a Special Economic Zone, it has to be neces-
sarily declared as a processing area.
54. As per Section 2(r) of the Act the expression “manufacture” means
to make, produce, fabricate, assemble, process or bring into existence, by hand or
by machine, a new product having a distinctive name, character or use and shall
include processes such as refrigeration, cutting, polishing, blending, repair, re-
making, re-engineering and includes agriculture, aquaculture, animal husband-
ry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and
mining. Since the definition of manufacture being very wide, both generation of
power and supply qualifies as manufacture and supply of services respectively
being the petitioner.
55. The power that is exercised by the Central Government under Sec-
tion 15(8)(b) of the Special Economic Zones [Act], 2005 is different from the pow-

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